Cleaner Power –Safer Climate

THE CARBON BUDGET

To prevent global temperatures from rising above any given level

there is one cumulative budget for all future GHG emissions.

This is not an annual budget; it is a single budget for the future

that we can spend only once.

IEA 2° Energy CO2 Budget50% chance of exceeding 2°

0

100

200

300

400

500

600

700

800

900

884

607

277

Gt CO2Budget 2012-2050

Budget2012-2035

Budget2036-2050

Source: IEA, WEO 2012

Lock-in from Coal Power

• Large budget lock-in from:– existing coal plants – and new planned coal plants

New Coal Build 2012-2035: CPS (1709 GW)

Source: IEA, WEO 2012

China; 796.961435; 47%

India; 345.182699;

20%

USA; 57.43615184;

3%

Rest Asia; 245.08397599

; 14%

EU; 70.005598782

9999; 4%

Africa; 72.4428124;

4%

Russia; 41.7949993; 2%

Rest World; 80.4773667219997; 5%

Coal Power v. Carbon Budget

0

200

400

600

800

1000

1200

884

1049

Gt CO2

existing coal: 396 Gt

new coal: 654 Gt

Based on IEA, WEO 2012

119% of Budget

Cutting CO2 Lock-in from New Coal

-

100

200

300

400

500

600

700

524

654

165

22.422381795

Gt CO2

431 GW without

CCS

391 GWwith CCS

1709 GWwithout

CCS

Source: IEA, WEO 2012

Prime CCS Retrofit Candidates

Source: IEA CCS Retrofit Paper, 2012

Prime CCS Retrofits by Country

Source: IEA CCS Retrofit Paper, 2012

China, 481

USA, 20

India, 24

Japan, 25

Korea, 21

Carbon/Energy Impacts of CCS

• Cut CO2 from new fossil sources• Cut CO2 from existing sources pre-

retirement• Create space in the budget for easier

transition away from oil.• Reduce bio-energy pressure on

forested lands

Proposed CO2 Stds – New Power Plants

• New NGCC: 1000 lbs/MWh• New Coal: 1000-1100 lbs/MWh• Coal limit based on use of partial CCS• CAA does not require EPA to show a

technology is in commercial use at current power plants.

• EPA estimates LCOE of coal with partial CCS:20% more than SCPC w/out EOR; +/-5% with EOR sales (SCPC: $92; SCPC+CCS (no EOR):$110; SCPC+CCS+EOR:$88-96;Nuclear:$107)

CO2 Standards for Existing Plants

• 2.4 billion tons CO2 from existing plants each year

• Clean Air Act requires CO2 standards for existing plants (Section 111(d))

• EPA sets performance standards; states implement through SIPs

• Proposal 6/14; Final 6/15; SIPs due 6/16

Pollution cuts: 560 million tons less carbon pollution in 2020; twice the reductions from the clean car standards- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

- - Health protections: up to 3,600 lives saved, and thousands of asthma attacks and other health incidents prevented in 2020 alone - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Clean energy investments: $90 billion in energy efficiency and renewables investments between now and 2020- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Low costs: only $4 billion in compliance costs in 2020 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Large benefits: $25-60 billion value of avoided climate change and health effects in 2020

NRDC PROPOSAL: LARGE BENEFITS, LOW COSTS

• FAIR: State-specific fossil-fleet average CO2 emission rate standards – Different standard for each state, recognizing differences in

baseline coal/gas generation mix– All fossil fuel generators within a state subject to same lbs/MWh

standard in 2020 and 2025

• FLEXIBLE: Full range of emission reduction measures count – Reducing heat rates at individual power plants– Shifting dispatch from high-emissions to low-emissions units– Credit for incremental renewables and energy efficiency – States may opt in to interstate averaging or credit trading– States may adopt alternative compliance plan that achieves

equivalent emission reductions

POLICY DESIGNSTRONG STANDARDS, MAXIMUM FLEXIBILITY

FLEXIBLE COMPLIANCE OPTIONS

Example Target Rate 1,500 lbs/MWh

2,000 lbs/MWh1,900 lbs/MWh

2,100 lbs/MWh

1,500 lbs/MWh

1,750 lbs/MWh

Starti

ng Emiss

ions Rate

Heat R

ate Im

prove

ments

Dispatc

h Shift

Renew

able

Genera

tion

End-U

se Effi

ciency

Combined Hea

t and Power

2020 Compliance

Emiss

ion Rate0

500

1,000

1,500

2,000

2,500

lbs/

MW

h

1,600 lbs/MWh

2012 2020 Reference 2020 Policy0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

EfficiencyWindOther RenewablesGasCoalOtherNuclear

TWh

PROJECTED GENERATION CHANGES IN THE U.S. POWER SECTOR

2012 2020 Reference 2020 Policy0

200

400

600

800

1000

1200

Efficiency/DRWindOther RenewablesGasCoalOtherNuclear

GW

PROJECTED CAPACITY CHANGES IN THE U.S. POWER SECTOR

COMPARATIVE WHOLESALE POWER PRICESFIVE-REGION AVERAGE (2010$/MWh)

Note: Generation-weighted average of PJM, Southeast (excluding Florida), MISO, NYISO, ISO-NE, accounting for 60% of national generation

2012 2014 2016 2018 20200

10

20

30

40

50

60

Reference Case Policy Case

Whole

sale

Pow

er

Pri

ces,

All

Hours

($/M

Wh)

COMPARATIVE HENRY HUB GAS PRICESNATIONAL AVERAGE (2010$/MMBtu)

Note: For the purposes of this assessment, natural gas prices are a projection of IPM based on assumed natural gas supply fundamentals and the power sector gas demand resulting from NRDC specified assumptions. Natural gas supply curves for the forecast years were developed based on the amount of resource available and the E&P finding and development costs (fixed and variable costs for exploration, development and O&M costs) associated with the different types of gas resources across the U.S. and Canada, accounting for LNG exports and imports.

2014 2015 2016 2017 2018 2019 20200.00

1.00

2.00

3.00

4.00

5.00

6.00

Reference Case Policy Case

Henry

H

ub G

as

Pri

ce (

2010$/M

MB

tu)

0

100

200

300

400

500

600

700

800

900

1,000

2020 - EPA VehicleStandards

2025 - EPA VehicleStandards

2020 - NRDCRecommended 111(d)Existing Power Plant

Standards

2025 - NRDCRecommended 111(d)Existing Power Plant

Standards

CO2

Emis

sion

s Red

uctio

ns (m

illio

n sh

ort t

ons)

Potential Reductions from Power Sector…Twice What’s Being Achieved by Clean Car Standards

MDV and HDV Standards

LDV Standard

Sources: EPA/NHTSA rule documents at http://www.epa.gov/otaq/climate/regulations.htm and NRDC estimates.

LDV Standard

MDV and HDV Standards

Note: The reductions shown are from BAU in the forecast years.

500 Million

900 Million

LESS CARBON

Source for historical CO2 emissions data: EIA.

Historical and NRDC-Projected Power Sector CO2 Emissions

Historical CO2 Emissions

Reference Case Emissions

NRDC Case Emissions

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

0

250

500

750

1,000

1,250

1,500

1,750

2,000

2,250

2,500

2,750

3,000

MIll

ion

Tons

of C

O2

STRONG STANDARDS MEAN HUGE EMISSIONS REDUCTIONS

Car and Power Plant Standards Get Us Four-Fifths of the Way to President’s 2020 Target (17% below 2005 levels by 2020 Reduction)

Historical emissions

2005 levels

HR 2454 – Where we need to get emissions to

2011 EIA projection

2012 EIA projection

2013 EIA projection

2013 Ext. Policy with power plant carbon standards

2013 EIA projection with extended policies, including second set of car standards

19901992

19941996

19982000

20022004

20062008

20102012

20142016

20182020

20222024

20262028

20302032

20340

1000

2000

3000

4000

5000

6000

7000

8000

Ener

gy R

elat

ed C

O2

(MM

TCO

2)

LARGE BENEFITS, LOW COSTS

COSTS BENEFITS

CO2 BenefitsSO2 and NOX BenefitsCompliance Costs

0

10,000

20,000

30,000

40,000

50,000

60,000

Mill

ion

2010

$

Compliance Costs Low Estimate2020

High Estimate2020

$4 Billion

$25 Billion

$60 Billion

CONTACTS AND ADDITIONAL INFORMATION

Daniel A. LashofOffice: 202-289-2399 | 40 West 20th Street, New York, NY 10011dlashof@nrdc.org | www.nrdc.org

David DonigerOffice: 202-289-2403 | 1152 15th Street, NW, Suite 300, Washington, DC 20005ddoniger@nrdc.org | www.nrdc.org

David Hawkins  Office: 202-289-2400 | 40 West 20th Street, New York, NY 10011dhawkins@nrdc.org | www.nrdc.org

Starla Yeh Office: 212-727-4632 | 40 West 20th Street, New York, NY 10011syeh@nrdc.org | www.nrdc.org

FOR MORE INFORMATION AND ADDITIONAL MATERIALS, PLEASE VISIT:http://www.nrdc.org/air/pollution-standards/