Climate Compass Blog
In the year since the Clean Power Plan was finalized, natural gas prices have dropped and federal tax incentives for renewables have been extended. Both developments make it cheaper to generate lower- emitting electricity.
C2ES compared five economic modeling studies released this spring and summer to get an updated look at the Clean Power Plan’s expected impact on carbon emissions, the U.S. power mix, and electricity prices. Each study included several scenarios and made slightly different assumptions, so we focused on observations found in multiple studies. Three key findings were:
1. The Clean Power Plan reduces total power sector emissions compared to business-as-usual scenarios in every study.
Market forces alone, such as lower costs for renewables and natural gas-fired generation, do not achieve the same reductions, even with federal tax credit extensions for wind and solar. On average, the scenarios project total emissions in 2030 will be 18 percent lower with the Clean Power Plan than what they’d be in a business-as-usual scenario.
2. Renewable energy increases and coal decreases compared to business-as-usual generation levels across all five studies.
In each study, power sector emissions decline under the Clean Power Plan because of changes in the electricity generation mix. The models are clear that the Clean Power Plan will cause an increase in renewables and a decrease in coal. The models are less clear on the impact the rule will have on natural gas and nuclear generation, though they suggest that these technologies will benefit from Clean Power Plan implementation. In all studies, the diversity of power generation is maintained.
3. The Clean Power Plan will have minimal impact on U.S. national average retail electricity rates.
Two of the five studies examined the plan’s likely impact on rates. In most scenarios, rate changes range from a 2 percent decrease to a 5 percent increase, depending on how the Clean Power Plan is implemented in each state. A 5 percent increase translates to $4.65 per month, or about 15 cents a day, for the average household.
|The chart shows the projected CO2 emissions in 2030 from the studies we examined for three scenarios: business as usual (BAU), mass-based Clean Power Plan implementation, and rate-based Clean Power Plan implementation. One studied modeled a mixed, or “patchwork” implementation scenario. The five studies are: MJ Bradley & Associates (MJB), U.S. Energy Information Administration (EIA), Bipartisan Policy Center (BPC), Center for Strategic and International Studies partnering with Rhodium Group (CSIS/Rhg), and the Nicholas Institute for Environmental Policy Solutions, Duke University.|
Another key finding is that cumulative carbon dioxide emissions are very similar under rate-based and mass-based compliance plans (See Figure 1). In other words, the choice of implementation approach doesn’t seem to affect the overall reductions — at least, not when every state makes the same choice.
The Clean Power Plan gives each state an emissions target and leaves it up to the state to determine the best path forward. This gives states maximum choice, even though it could lead to fewer reductions than a comprehensive national approach.
Many states are weighing whether to use a mass-based approach, similar to what California and the nine Northeast states in the Regional Greenhouse Gas Initiative use that limits the total amount of carbon emissions, or a rate-based approach that limits emissions per unit of electricity produced.
What’s clear from the models is that if states choose to go different directions, a patchwork of mass- and rate-based implementation, emissions are likely higher than if they all choose a similar path.
From these studies, we can be confident the Clean Power Plan will reduce power sector emissions compared with business as usual. Now it’s up to states to choose how they will implement the plan to best serve the needs of consumers and reduce the emissions that are causing damaging and costly climate impacts to our communities.
|Photos by Dennis Schroeder / NREL, Iberdrola Renewables, Inc., U.S. Department of Energy|
Wind and solar power were once considered expensive and were not widely deployed. Today, skeptics say the same about technology to capture, use and store carbon dioxide emissions (CCUS or carbon capture).
So what lessons can we draw from the experience of the wind and solar industries as they’ve become more mainstream to facilitate a faster and broader deployment of carbon capture technology?
The cost of wind energy has declined by more than 60 percent since 2009 and average nameplate capacity increased 180 percent between 1998-99 to 2015. These improvements have led to an installed wind capacity of 74,821 MW in the United States, enough electricity to power nearly 20 million average U.S. homes every year.
These wind energy milestones in cost reduction, performance improvements, and scale of deployment were supported by the Production Tax Credit (PTC), a federal deployment incentive. It’s reasonable to assume that the PTC would have been even more successful if it had been maintained consistently instead of experiencing periods of uncertainty regarding its fate, leading to boom-and-bust wind power development cycles.
Ongoing federal research and development (R&D) also spurred improved wind industry technology. For example, in 2007, the National Renewable Energy Laboratory initiated the Gearbox Reliability Collaborative in response to industry-wide technology challenges. That research led to improved gearbox designs, reducing the overall cost of wind energy and showing how collaborative industry efforts and federal support for R&D can resolve performance challenges.
Solar photovoltaic (PV) technologies experienced similar dramatic cost declines due to economies of scale and improved manufacturing and performance. The cost of utility-scale solar has fallen more than 54 percent since 2011. The efficiency of all PV cells steadily improved between 1975 and 2010, supported by multi-decade R&D programs like the Department of Energy’s Thin Film PV Partnership.
These cost declines and performance improvements were facilitated by the Investment Tax Credit, another federal deployment-focused incentive, and the Section 1603 Treasury program, a federal loan guarantee mechanism to support project financing. Strong state policies like the California Renewables Portfolio Standard enabled developers to enter into above-market power purchase agreements. The experience of utility-scale solar PV demonstrates that overlapping policies are essential to achieve financing for first-of-a-kind projects.
Lessons for carbon capture
We can draw three key conclusions from wind and solar energy’s experience:
- Stable, long-term deployment incentives that build on previous public and private investments in technology research, development and demonstration (RD&D) are essential to facilitate a large volume of projects;
- As more projects are deployed, costs are reduced through economies of scale, learning from experience, and technological innovation;
- Ongoing government support for RD&D can deliver cost reductions by supporting innovation and overcoming performance challenges.
In contrast to wind and solar, the U.S. lacks an effective federal incentive for commercial deployment of CCUS—despite being a world leader in public and private RD&D for early stage technology demonstration. Fifteen commercial-scale CCUS projects are operating globally; eight of those are in the United States. But that’s not nearly enough to meet our mid-century climate goals.
Carbon capture can be used at coal- or natural gas-fired power plants, which are baseload generation resources. It’s also the only way to reduce carbon emissions from some industrial plants, such as facilities producing chemicals, steel, and cement. Also, over the long-term, we’ll need to integrate biomass energy systems with carbon capture (BECCS). Combining the capture of photosynthetic carbon from biomass with CCUS can enable negative emissions.
While first-of-a-kind, commercial-scale CCUS projects are expensive, we know that as more projects come online, they will become cheaper. SaskPower estimates it could cut costs by up to 30 percent on the next unit to be retrofitted following its current experience operating the world’s first commercial-scale, coal-fired power plant carbon capture project. Developers are exploring novel approaches, including the Exxon and Fuel Cell Energy partnership and the Exelon-supported NET Power project, that have the potential to reduce costs still further.
It’s essential to extend and expand tax incentives for carbon capture, update state laws to include CCUS technology in clean energy standards, and fund continued carbon capture RD&D, among other things, if we are going to reach our emissions-cutting goals.
It would have been hard to imagine just a few short years ago that the United States and China would – together – be the ones driving a stronger global response to climate change.
For years, each claimed inaction by the other as an excuse for not doing more. But with their simultaneous acceptance today of the Paris Agreement, the world’s two largest economies and emitters committed themselves to a low-carbon future, and solidified a new global framework that will keep pressure on all countries to keep doing more.
The precise mix of motivations varies between the two. But fundamentally, the heads of both the United States and China have assessed the risks and opportunities presented by climate change, and they have decided it is in their nations’ interests – and is their responsibility as global leaders – to do more.
How faithfully the two countries now follow through on their commitments will depend in part on a host of shifting political and economic currents, and who assumes the reins in the years ahead.
But with their leadership up to and since last year’s Paris conference, the United States and China have helped establish new mechanisms and unleash new energies that ensure a staying power beyond the comings and goings of individual governments.
With the Paris Agreement, countries have applied the lessons of a quarter-century of fitful climate diplomacy to create a new framework that offers the best hope ever of an effective international response.
The agreement binds countries to a set of processes requiring them to: tell the world how they’re going to fight climate change; report regularly on how well they’re doing; undergo review by experts and by other countries; and, every five years, say what they’ll do next.
It is, in essence, institutionalized peer (and public) pressure. And if it works as designed, the agreement will over time strengthen confidence that countries are doing their fair share, making it easier for all to do more.
Beyond the agreement itself, and the role of national governments, Paris also will keep nurturing stronger action through its powerful “signaling” effect. For many mayors, governors, CEOs and other real-world decision makers, Paris was a catalytic moment, and its signals continue to resound.
From Warren Buffett, who cited Paris in his annual letter to shareholders as further impetus for Berkshire Hathaway’s multibillion-dollar investments in renewable power, to Moody’s, which is now taking countries’ Paris pledges into account in rating future investments, mainstream business is internalizing the Paris goals.
Mayors, too, are reading Paris as a cue for stronger action. In a new Global Covenant of Mayors for Climate & Energy, more than 7,000 mayors in 119 countries pledged to set climate goals beyond those of their national governments. C2ES recently joined with The U.S. Conference of Mayors to form the Alliance for a Sustainable Future, bringing mayors and business leaders together to forge collaborative approaches to cutting emissions.
In the long run, this activation of mayors, CEOs and other “non-state actors” could prove as decisive as the actions of national governments in determining the success of Paris.
No one moment and no one agreement can ensure the long-term transformation needed to keep climate change in check. But today’s U.S.-China announcement is the latest in a series of breakthrough moments that could mean the difference between a successful low-carbon transition and a future of climate calamity.
Late summer days mean fun in the sun – kids running through sprinklers, building sandcastles, and playing at the park. Unless it’s so hot, you’re mostly looking at the outdoors through the window of an air-conditioned house.
An eight-day stretch of 95-plus days, with DC’s infamous humidity, felt like being trapped in a sauna, and we’re not alone in feeling the heat. Much of the Northeast was roasting. Central and eastern Europe had heat waves. The Middle East has seen record-breaking temperatures as high as 129 degrees Fahrenheit. Globally, last month was the hottest July on record.
As we all crank up the air, how can we keep cool while keeping the energy bills down?
Here are five simple ways:
- Close window shades or drapes during the day to block out sunlight and keep the inside temperature cooler. Highly reflective interior blinds can reduce heat gain by about 45 percent, while drapes with white plastic backing can reduce heat gain by 33 percent.
- Manage that thermostat. Your cooling costs increase by up to 5 percent for every degree you lower the temperature. And don’t cool an empty house. According to the Department of Energy, you can save as much as 10 percent a year on cooling and heating bills by turning your thermostat 7 to 10 degrees from its normal setting while you’re at work.
- Avoid using items that generate heat. Common culprits are incandescent lightbulbs, which waste 90 percent of energy in the form of heat, the stove and oven, and the clothes dryer. Replace heat-intense bulbs with CFLs or LEDs, take advantage of summer fruits and vegetables for a no-cook meal, and hang your laundry to dry.
- Hang out in the lower levels of your home if possible. Heat rises, so the basement or first level may feel cooler. You may even want to sleep there on roasting hot nights.
- Turn on ceiling fans (counter-clockwise) and portable fans to circulate air when you are in the room. It doesn’t actually cool the room, but it makes you feel cooler by helping sweat evaporate faster. You can also cool off by putting a cold cloth on your wrists or neck or taking a cold shower. Remember to drink plenty of water on hot days. Organizations like the Red Cross provide checklists to help you prepare for the heat.
For future summers, consider planting shade trees, especially on the southwest side of the house, or building a trellis with climbing foliage. Take a closer look at your windows and doors to make sure cool air isn’t leaking out. And explore ways to increase attic ventilation and reflective insulation that blocks the transfer of heat from the roof and attic into your house.
Heat waves are expected to become more frequent and intense, so taking simple steps now can reduce cooling bills in the future.
- Two feet of rain – that is about four months’ worth – fell in parts of Louisiana over the past few days, forcing thousands to flee their homes as water rose to the rooftops. More than a dozen people have died in the flooding.
- On July 30, nearly six inches of rain fell in two hours in Ellicott City, Md., turning Main Street into a raging river that swept away cars, tore up storefronts, and killed two people.
- About a month earlier, up to 10 inches of rain fell in 12 hours in parts of West Virginia, causing flooding that killed 26.
Heavy downpours are expected to become more frequent in a warming world. That’s because warmer air can hold more water vapor. For each degree of warming, the air’s capacity to hold water vapor goes up by about 7 percent. An atmosphere with more moisture can produce more intense precipitation, which is what we’ve been seeing.
Last year, flash and river floods killed 176 people in the United States, more than for any other weather-related disaster.
Better infrastructure -- both “green,” like using soil and vegetation to absorb rainfall, and “gray,” using manmade materials for pipes and walls -- can give the water someplace to go other than into homes and businesses.
In urban areas, where concrete and asphalt have replaced water-absorbing soils, rain gardens and porous pavements can reduce the amount of storm water pouring through the streets, or overwhelming water treatment plants.
In other areas, more extensive storm protection infrastructure, like flood walls and storm water storage and pumping facilities, may be needed. Nashville is considering building a $110 million flood wall and pumping system after flooding in May 2010 killed 11 and caused more than $2 billion in private property damage. After initially blocking the plan, the council this summer authorized completing designs and seeking community input.
Flood protection is costly, but so is flood cleanup. The National Oceanic and Atmospheric Administration estimates four severe floods – in Texas and Oklahoma in May 2015, South Carolina in October 2015, Texas and Louisiana in March 2016, and Houston in April 2016 – caused an estimated $7 billion in damages and killed 69 people.
More frequent and intense downpours are one of the impacts we can expect from climate change. Cities, states and businesses will need to work together to strengthen infrastructure and protect properties and lives.