Understanding the Building Blocks to Emission Reduction

October 16, 2014 By Karen Henry

EPA-building-blocks-energy-manageThe US Environmental Protection Agency (EPA) has identified four building blocks to help states achieve the “best system of emissions reduction” (BSER) to help them comply with the Agency’s Clean Power Plan. The following “building blocks” of BSER incorporate reduction measures both inside and outside the footprint of the affected generators, including energy efficiency:

  1. Heat rate improvement (HRI) to reduce emission rates of coal generating facilities. EPA assumed 6 average savings across the coal fleet—4 percent from implementation of best practices and 2 percent from new equipment. The potential for improvement will vary by facility.
  2. Fuel switching or system redispatch from coal to natural gas. EPA assumed that existing combined cycle (CC) capacity across each state could run at an average capacity factor of 70 percent. The type and intended application of CC units may impact their maximum capacity factor, as might transmission capability and natural gas availability.
  3. Increasing generation from renewables and preserved generation from nuclear. EPA developed expectations for expanded renewable generation based on average renewable portfolio standard requirements across multistate regions. EPA’s approach of regional mapping of renewable requirements may result in expectations for generation growth that differ from those of the states themselves. Utilities looking into distributed generation will need to consider impacts on the distribution network and the proper forms of compensation/charges.
  4. Growth in end-use energy efficiency (EE) to displace emitting generation. EPA assumed incremental growth in electric load savings of up to 1.5 percent per year, inclusive of existing state EE program requirements. EE cost and potential will vary by state, and low-cost EE projects may have already been implemented.

Although EPA used these four building blocks in developing state emissions reduction targets, the draft rule does not require states to or limit them from using these specific resources in their compliance plans. This flexibility creates an opportunity for states and stakeholders to find the lowest-cost compliance options that support their economic and policy goals.

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