Connecticut seeks to support nuclear energy

For more than a year, Connecticut legislators have been working to craft a policy to ensure that zero-emission electricity from the Millstone Nuclear Power Station continues to flow until at least 2035 and 2045, when its operating licenses expire.

Millstone, New England’s largest power plant, supplied 45 percent of Connecticut’s in-state power generation and nearly all its carbon-free electricity last year. With around 2,100 MW of installed capacity, the facility generates enough power each year to meet the needs of nearly 2 million Connecticut households. Moreover, the two reactors help avoid the emissions of more than 6 million metric tons of carbon dioxide per year.

But Millstone, like other nuclear power plants, faces economic headwinds. Challenges include sustained low natural gas prices, declining renewable energy costs, slow growth in electricity demand, and power markets structures and policies that don’t compensate nuclear for its environmental and reliability attributes. Mandated safety enhancements and other capital and maintenance investments are adding to plant costs. Since late 2012, six U.S. nuclear reactors have been retired prematurely, and seven more are set to close by 2025.

If this trend continues or accelerates, there could be serious climate implications. Nuclear power supplies 20 percent of total U.S. electricity, but makes up 57 percent of zero-carbon electricity. As all recent U.S. nuclear retirements have led to increased fossil fuel-fired generation, any additional loss of nuclear generating capacity would be expected to increase U.S. emissions of carbon dioxide as well as nitrogen oxides. These increased emissions will set back our efforts to fight climate change and regional air pollution. Although nuclear power enjoys bipartisan support in Congress, a federal remedy has failed to emerge, so individual states are taking action. Last August, New York established a clean energy standard to help assist its upstate reactors. In December, Illinois passed a law to support two (i.e., Quad Cities and Clinton) of its six nuclear power plants in a similar fashion. New Jersey, Ohio and Pennsylvania are exploring options to support their nuclear reactors.

In Connecticut, lawmakers have proposed creating additional opportunities for Millstone to sell its power. In the bill’s current form, nuclear power would be able to participate in a state solicitation for carbon-free power. Under this arrangement, the commissioner of the Department of Energy and Environmental Protection could direct electric distribution companies (i.e., utilities) to “enter into agreements for energy, capacity, and environmental attributes,” provided the proposals are in the best interests of the ratepayers and meet other criteria. At the same time, the bill would increase the state’s renewable portfolio standard (RPS) to 40 percent by 2040 from 27 percent by 2020. So as not to overwhelm the RPS and inhibit the growth of renewables, only a portion of Millstone’s output should be eligible under the final bill unless the ambition of the RPS is increased commensurately.

To remain economically viable, power plant owners rely on revenues (i.e., energy and capacity) they receive from participating in wholesale power markets. However, low natural gas prices continue to put downward pressure on wholesale electricity prices across the country. In 2016, prices in New England’s electricity market averaged $28.94/MWh – the lowest since the market was established in 2003 and below the average total generating cost for multi-unit nuclear reactors. Owners can also enter into two-party agreements directly with power consumers or other parties. While this offers an alternative revenue stream, these contract prices tend to reflect current circumstances in electricity markets.

Power markets are challenging and do not reward nuclear power for its large environmental and system reliability benefit. In the absence of a price on carbon, we need alternatives to ensure nuclear power plants do not retire prematurely. We applaud Connecticut’s proactive approach to recognizing the carbon-free attributes of New England’s largest power source. State leadership on climate has never been more critical. With reasonable policies in place to maintain the existing U.S. nuclear fleet, it will be easier for the U.S. to reduce its emissions and achieve its climate and air pollution reduction goals.

The clean-energy transition is powering the U.S. economy

The federal government has an important role facilitating the acceleration of a clean, modern 21st century energy system. Ignoring that role or diminishing its effectiveness go against the tide of innovation and entrepreneurial spirit that is creating U.S. jobs and helping the economy flourish.

Companies, states, and cities are all pursuing clean energy and energy efficiency because it makes economic sense. The federal government needs to encourage this innovation, not try to slow it down.

Consider that clean energy is the fastest growing energy sector in the United States. Renewables have accounted for more than half of new U.S. power capacity for the past three years in a row. Thanks to market forces, including falling prices for renewables and relatively low and stable prices for natural gas, the U.S. energy system is getting cleaner.

The drive for clean energy and sustainability is also putting Americans to work. The latest U.S. Department of Energy report shows the solar workforce increased by 25 percent to about 374,000 in 2016, while wind employment increased by 32 percent to about 102,000. Almost 2 million Americans are employed in the design, installation, and manufacture of energy-efficiency products and services. The U.S. nuclear industry directly employs about 50,000, and growing global demand could generate thousands of U.S. industry jobs.

Private enterprise is leading this clean-energy transition. Since the election, Google announced it will meet its goal this year of running on 100 percent renewable power. HP pledged to reduce the greenhouse gas emissions from its global operations by 25 percent from 2015 levels by 2025. NRG completed the first retrofit of a U.S. coal-fired power plant to capture carbon emissions in Texas – on time and under budget.

Many states and cities are also embracing clean energy and clean transportation.

  • Twenty-nine states have renewable portfolio standards requiring utilities to deliver a certain amount of electricity from renewable or alternative energy. Since the election, several states, including Maryland and Michigan, have taken steps to raise their standards.
  • Eleven states already have limits on carbon dioxide emissions, and are using effective, market-based approaches to achieve the reductions economically.
  • Several states, including California, Connecticut, and New York, have created Clean Energy Banks or Green Banks to facilitate more private investment in clean energy projects.
  • More than two-dozen U.S. cities have committed to switch entirely to renewable energy.
  • About 30 cities have told U.S. automakers they want electric street sweepers, trash haulers and other vehicles, potentially generating $10 billion in sales.

These steps by businesses, states, and cities are significant. The National Renewable Energy Laboratory estimates the average city alone could reduce its carbon footprint nearly 20 percent by taking steps like improving building codes, increasing access to public transit, practicing “smart” growth, incentivizing solar and localized electricity systems or “microgrids.”

But all these steps are not enough to address the climate and energy issues we face. Without federal leadership, we won’t maximize the benefits of state policies and we’ll see more lawsuits and regulatory uncertainty that slow business decision-making and investment.

Delaying federal climate action also increases the risk of climate impacts such as frequent and intense extreme weather, rising sea levels, droughts and heat waves that many communities are already experiencing. Failing to act now means paying more later.

In the near term, there are opportunities for bipartisan steps at the federal level that could help both the environment and the economy, including:

Incentivizing carbon capture. Bipartisan support is growing on Capitol Hill and beyond to accelerate carbon capture deployment on power plants and industrial sources like steel and cement plants. Senate and House lawmakers introduced bipartisan bills in April to help unleash private capital to scale up the number of carbon capture projects. This is the crucial first step to bring down capture costs, which could help create a market for using manmade carbon dioxide in useful products.

Advancing nuclear energy. Nuclear, our largest source of zero-carbon energy, will have to play a role in any long-term climate strategy. There’s bipartisan support for preserving existing nuclear plants, and spurring the research and development that will lead to the next generation of nuclear energy. House and Senate lawmakers have reintroduced the bipartisan Nuclear Energy Innovation Capabilities Act to enhance collaboration between private sector innovators and the Department of Energy’s national labs.

Modernizing our infrastructure. This key goal of the new administration could create jobs and improve climate resilience. A modernized grid and support for energy efficiency can make communities more resilient while reducing their carbon footprint. We could expand charging and refueling networks for electric, natural gas and hydrogen vehicles. And as we rebuild our roads and bridges, let’s make sure they’re built to last and can withstand more frequent extreme weather.

Empowering states. Reasonable people can debate the relative roles for state and federal government in environmental regulation, however it is unreasonable to expect states to take on more responsibilities with less federal funding and support. We urge Congress to include funding for states and important agency support at the Environmental Protection Agency and the Department of Energy.

Promoting American energy, putting Americans to work, and powering the American economy shouldn’t be partisan issues. Putting “America First” also means recognizing the climate risks to U.S. communities and companies and the economic benefits of a clean energy future. As an organization committed to building bridges, C2ES is prepared to work with the private sector and public officials at all levels of government to find practical climate solutions.

 

Year Ahead: We must strengthen climate action wherever possible

When I wrote a blog a year ago taking stock of the strengthening climate change effort, I reflected on a year of unprecedented progress, capped by the Paris Agreement, and outlined ways we could build on those successes.

At the beginning of the new U.S. administration, the outlook is unfortunately far different.  Now, our challenge is to preserve as much of this progress as we can, and to devise new strategies to continue strengthening climate action wherever possible.

Despite coming setbacks, it’s worth reminding ourselves that we have a solid base to work from. Thanks in part to strong policies, but also to growing market forces, the U.S. is on the path to a clean-energy transition, and the continued momentum is strong.

A few examples, just since the election:

·      Some of the world’s wealthiest entrepreneurs, including Bill Gates, Richard Branson, and Mark Zuckerberg, launched a billion-dollar fund to invest in cutting-edge clean energy technologies.

The new policy landscape won’t be clear for some time and is likely to evolve. But as we monitor the early signs, and take soundings with policymakers and stakeholders around the country and around the world, we are coming to a clearer view of immediate imperatives, and of opportunities that may lie ahead.

One imperative is ensuring that the United States remains a reliable partner in the global climate effort – by staying in the Paris Agreement, and by working constructively with other countries to establish sound rules for its implementation. 

We were encouraged to hear Secretary of State nominee Rex Tillerson note the importance of the United States staying at the table. Indeed, the Paris Agreement reflects long-standing bipartisan principles. It fully preserves national sovereignty while providing a means of holding other countries accountable. U.S. businesses benefit from full access to the clean energy markets the agreement helps drive.

We were encouraged also to hear EPA Administrator nominee Scott Pruitt express respect for the “endangerment finding” underpinning the regulation of greenhouse gases under the Clean Air Act. What is critical is how EPA chooses to fulfill the inherent legal obligation to regulate emissions, starting with the power sector.

While the Clean Power Plan appears unlikely to survive, decarbonization of the power sector is already underway. Thanks to improved energy efficiency and a more diverse energy mix, emissions dropped more than 20 percent over the last decade. Last year was the third in a row that renewables accounted for more than half of new U.S. power capacity.

Continued tax credits enjoying strong bipartisan support will help sustain that growth.  State-level conversations on lower carbon energy policies are continuing as states, cities and utilities find economic opportunity in modernizing the power sector. But the imperative remains: We need an overarching federal framework to deliver sustained, cost-effective emission reductions. We urge the new administration and Congress to get on with the job.

In the near term, we see opportunities for bipartisan steps that benefit both the climate and the economy and strengthen the foundation for a longer-term clean energy transition. These include:

Incentivizing carbon capture, use and storage.

Carbon capture technologies like those deployed this month in Texas are essential to meeting the climate challenge. Senate Majority Leader Mitch McConnell was among the bipartisan sponsors of a bill last year to help advance these technologies by supporting the use of captured CO2 in enhanced oil recovery, as recommended by a coalition of industry, labor, and environmental groups we help lead. We expect similar legislation in this Congress.

Advancing nuclear energy.

Bipartisan bills have already been introduced in the House and Senate to spur advanced nuclear technologies. Nuclear is our largest source of zero-carbon energy and the only one that provides continuous baseload power. It will have to play a significant role in any realistic long-term climate strategy.

Modernizing our infrastructure.

A viable infrastructure package could open significant opportunities to address climate change while creating jobs and growth. Examples include:

  • A modernized electric grid that can better distribute renewable power and is more climate-resilient.
  • Expanded charging and refueling networks for electric, natural gas and hydrogen vehicles.
  • Roads and bridges that can better withstand more frequent extreme weather.

One reason we’re confident of continued momentum is that the vast majority of the American people support it. In a Yale survey conducted after the election, nearly 70 percent favored staying in the Paris Agreement. And 70 percent – including a majority of Republicans – supported strict carbon limits on existing coal plants.

Business leaders, too, recognize the growing risks of climate impacts, and the opportunities to create new products, services and jobs.

And a growing number of cities are finding they can save money and create jobs by encouraging energy efficiency and clean energy and transportation.

At C2ES, while we are bracing for setbacks, and are prepared to defend against reversing course, we also will continue working as hard as ever to bring diverse interests together to make progress wherever we can. We face significant new challenges. But from the local to the global level, we’ve got strong momentum. And we can’t turn back.

 

Canada, Mexico, US should collaborate on climate

Image courtesy Freestock.ca

When the leaders of the United States, Canada and Mexico meet June 29 in what’s being called the “Three Amigos” summit, there will be a lot to discuss: trade, the economy, security, and repercussions from the “Brexit” vote. One topic we know will be on the agenda is climate change, whose impacts threaten residents of all three countries.

Each country submitted a pledge to reduce emissions as part of the Paris Agreement. At the North American Leaders’ Summit in Ottawa, they’ll also announce a new goal for North America, collectively, to generate half of the continent’s electricity from non-emitting sources by 2025 – a goal that’s achievable with a little more effort.

Each country has national and city/state/provincial level policies to reduce greenhouse gas emissions. But more will need to be done beyond business and policy as usual to substantially take advantage of our three countries’ clean energy potential. Closer coordination on climate and energy policy is a good place to start.

Among the policy areas where collaboration would be helpful are:

Carbon pricing

Setting a price on carbon emissions, either through a tax or cap-and-trade system, is considered the most efficient way to reduce them. Many national or subnational pricing systems are already in place in North America:

  • Quebec and California have linked their cap-and-trade programs and Ontario plans to join. Mexico has interconnected electricity with California and the state imposes a charge on imported electricity that does not meet its greenhouse gas thresholds. Mexico has interconnected electricity with California, and the state has requirements on imported electricity as part of its climate program.  
  • Nine U.S. states in the Northeast participate in a cap-and-trade program for electricity called the Regional Greenhouse Gas Initiative, or RGGI.
  • Mexico has a carbon tax on fossil fuel (including imports) and has a law that created a market for greenhouse gas offsets.

All three nations should work to expand carbon pricing either at the national or subnational level. Because bigger markets are more efficient, they should seek to standardize measurement, reporting and verification systems (MRV) and methodologies for offset programs.

By either directly linking programs, as California and Quebec have, or by indirectly linking through the use of offsets, Canada, Mexico, and the United States should aspire to send a pricing signal as broadly as possible. By sharing technical expertise and making efforts to align MRV, we can create more efficient and effective programs.  

Short-lived climate pollution

Meeting the goal of keeping the rise of global temperatures to well below 2 degrees Celsius by mid-century will require action on more than just carbon emissions. Near-term actions to reduce climate pollutants that remain in the atmosphere for shorter periods of time such as methane, black carbon, and hydrofluorocarbons (HFCs) could significantly limit peak temperature increases in the coming decades.

Canada and the United States recently announced plans to regulate both existing and new sources of methane and agreed to reduce emissions from the oil and gas sector by 40-45 percent below 2012 levels by 2025. Mexico, which has a significant oil and gas sector, is expected to join in this pledge. Similarly, it makes sense for the three countries to work together to reduce HFCs and black carbon as quickly as possible.

Transportation

Light-duty vehicle greenhouse gas emissions standards have been harmonized among the three nations since 2014. Both the Canadian and Mexican governments adopted the LDV standards set forth by the U.S. National Highway Traffic Safety Administration (NHTSA). Canada will follow the vehicle standards through 2025, while Mexican standards run through the end of 2016. Mexico is also considering adopting more stringent heavy-duty vehicle emissions standards to match European regulations; Canada and the United States both follow NHTSA’s emissions standards through 2018.

States, provinces, and cities in the three countries can also lead on zero emissions vehicle adoption, such as electric vehicles (EVs). Ontario, Quebec, and British Columbia in Canada all offer financial incentives for the purchase of an EV. Likewise, California, Colorado, Massachusetts, and several other U.S. states offer EV tax credits or rebates. Mexico City has pursued electrification of its taxi fleet, offering up to $3,000 for the purchase an electric taxi.

Along the Pacific, California, Oregon, Washington and British Columbia have cooperated to promote EV purchases and the spread of EV charging infrastructure. Mexican states along the Pacific could join their northern neighbors to encourage EV deployment.

Carbon capture

Carbon capture, use and storage (CCUS) technology has the potential to yield dramatic reductions in carbon dioxide emissions from the power and industrial sectors. The International Energy Agency (IEA) estimates that CCUS can achieve 14 percent of the global greenhouse gas emissions reductions needed by 2050 to limit global warming to 2C above preindustrial levels. In fact, without widespread use of CCUS technology, climate change mitigation costs may rise as much as 138 percent. For the industrial sector in particular, there are no practical alternatives to achieve deep emissions reduction.

Recent CCUS project milestones include the retrofit of the Boundary Dam coal-fired power plant in 2014 in Saskatchewan, Canada, and Shell’s incorporation of CCUS technology on hydrogen production at the Quest Project in Alberta, Canada, in 2015. But CCUS technology deployment is not on track to meet interim 2025 targets. Since a CCUS project can take five to 10 years from conception to operation, financial and policy support is critical now. 

New and enhanced policy drivers at the national and subnational levels are needed in the U.S., Canada and in Mexico to drive research into ways to turn carbon dioxide from a waste product to a useful commodity and accelerate deployment of CCUS technology at the commercial scale.

Working together

Canada, Mexico and the United States have connected economies with significant trade in energy and other products. All three countries are major oil and gas producers, but also have portfolios of clean energy such as nuclear, hydropower and renewables. It only makes sense that we should be connected in our efforts to address climate change.

 

Climate Innovation: Imagine how we can beat expectations next

Back in 2005, the U.S. Energy Information Administration projected that, under current policies, U.S. energy-related carbon dioxide emissions would increase nearly 18 percent by 2015.

They did not.

In fact, emissions fell – by more than 12 percent. So we were off by 30 percent.

As Yogi Berra may have said: It's tough to make predictions, especially about the future. We didn’t know then the impact a variety of market and policy factors would have on our energy mix. And we don’t know now all of the factors that could help us meet, or exceed, our Paris Agreement pledge – to reduce our net emissions 26-28 percent below 2005 levels by 2025.

U.S. emissions have fallen over the last 10 years due to factors that include:

  • Growth in renewable energy
  • Level electricity demand
  • Improved vehicle efficiency
  • A shift in electricity generation from coal to natural gas.

An unanticipated abundance of cheap natural gas has transformed the U.S. electricity mix. Coal-fired generation has fallen from 50 to 33 percent of the mix, while less carbon-intensive, natural gas-fired generation has risen from 19 to 33 percent.

The last 10 years also included a major economic downturn, which in 2009 drove electricity sales below 2005 levels. Despite a return to positive economic growth in the following year that continues through today, electricity sales have remained flat. Declines in manufacturing; improvements in energy efficiency, including in buildings, lighting, and appliances; warmer winters; and increased use of on-site generation like rooftop solar panels are the likely drivers.

What will happen in the next 10 years?

Certainly, the electric power sector will continue to decarbonize. It is not unreasonable to assume that natural gas will play an even larger role, while coal will play a substantial albeit diminishing role in the electricity mix.

Here are some other factors that are hard to quantify now, but could affect how quickly we transition to a clean energy future:

More zero-emission electricity

Increased clean and renewable electricity production, spurred by the Environmental Protection Agency’s Clean Power Plan and congressional tax credit extensions for wind and solar, could reduce renewable power costs, which have already been dropping. In other words, economies of scale could lead to higher deployments and lower emissions than currently forecast.

Wind and solar generation have grown nearly twelve-fold since 2005, nearly eight times greater than what was expected back then. In the 2016 Annual Energy Outlook, wind and solar generation are projected to increase 2.5 times by 2025.  Historical precedent would tend to suggest that this is a highly conservative estimate.

However, sustained low prices in wholesale power markets from low natural gas prices and a proliferation of renewable electricity sources could harm another zero-emission source: nuclear. In particular, we could see natural gas continue to replace zero-emission merchant nuclear plants, moving us in the wrong direction, unless remedies are implemented. Also, low wholesale prices would tend to discourage new renewable generation.

More zero-emission vehicles

Electric vehicles (EVs) make up less than 1 percent of new U.S. car sales. But as their prices drop and range expands, the adoption rate could accelerate over the next 10 years, spurring important reductions from what is now the largest emitting sector. In one sign of growing demand, more than 400,000 people have put down a deposit for a Tesla Model 3 EV that won’t even be on the market until 2018.

Advances in battery storage could drive the transformation of the transportation sector and would provide obvious benefits to the electric power sector as well.

Meanwhile, automakers are exploring alternative fuels: natural gas, hydrogen fuel cells, and biofuels. And more than a dozen states and nations have formed a Zero-Emission Vehicle (ZEV) Alliance to encourage ZEV infrastructure and adoption.

City action

Action by cities, the magnitude of which is not easily captured by national macroeconomic models, could lead to greater than anticipated emission reductions. Starting with the groundbreaking Mayors Climate Protection Agreement in 2005, initiatives are evolving to connect cities with each other to exchange knowledge and achieve economies of scale for new technologies.

More cities are exploring ways to generate additional reductions by 2025. These include: more energy-efficient buildings; better tracking of electricity and water use, innovative financing for more efficient generation, appliances and equipment; and improved public transportation and promotion of electric vehicles.

Business action

Last, but not least, steps taken by companies beyond regulatory requirements could produce greater emission reductions than we can foresee. Companies are investing in clean energy projects, reducing emissions throughout the supply chain, establishing internal carbon pricing, and helping customers reduce their carbon footprint. More than 150 companies have signed the American Business Act on Climate Pledge.

C2ES and The U.S. Conference of Mayors are teaming up to encourage city and business leaders to work together to reduce greenhouse gas emissions. Imagine how effective we can be when we coordinate climate action.

2015 UNEP report suggests that beyond each countries’ individual commitments to the Paris Agreement, actions by sub-national actors across the globe can result in net additional contributions of 0.75 to 2 billion metric tons of carbon dioxide emissions in 2020.  

The United States has significantly reduced its greenhouse gases over the past decade, and has put in place policies ensuring continued reductions in the years ahead. With so many resources and tools at our disposal, it is clear that we can meet or exceed our climate goal. The only uncertainty is how we will do it.

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Event: Innovation to Power the Nation

Technology, policy, and business experts discuss how innovative technology and policy can help us reach our climate goals at Innovation to Power the Nation (and World): Reinventing Our Climate Future at 1 p.m. ET on Wednesday, June 29. Watch the livestream.

Speakers include Patent and Trademark Office Director Michelle K. Lee; C2ES President Bob Perciasepe; Dr. Kristina Johnson, CEO of Cube Hydro Partners; Nate Hurst, Chief Sustainability & Social Impact Officer at HP; and Dr. B. Jayant Baliga, inventor and director of the Power Semiconductor Research Center at North Carolina State University.