5 Ways companies can satisfy the Clean Power Plan requirements
Sometime this summer, the United States Environmental Protection Agency (EPA) is expected to announce the final Clean Power Plan (CPP) rule, a set of standards that will greatly reduce carbon emissions from power plants. Upon the approval, each state will be responsible for developing their compliance plans by 2016.
According to the draft version of the rule, the CPP seeks to reduce national electricity sector emissions by an estimated 30 percent below 2005 levels by 2030. In order to do so, the new plan aims to establish state-by-state targets for carbon emissions reductions, with each state having its own target. However, states can work independently or together to achieve their Clean Power Plan goals.
To get a jumpstart on compliance strategies, we outline the top five ways companies can satisfy requirements as proposed by Navigant Consulting.
Although it’s not applicable to all states, coal retirement represents the single largest available source of emissions reductions. It’s anticipated the Northeastern, Southeastern and Midwestern states will rely on this to meet its targets.
According to Navigant Consulting, the addition of renewables is a cost-effective compliance option for most states. The model found that wind expansion is very economic throughout the western and central United States, while solar and wind play a critical role in ensuring low-emission generation in California.
Although there are tradeoffs, a glide path helps the final 2030 targets by reducing overall costs, especially those that could potentially skyrocket with the rise of coal retirements. Analysis by Navigant Consulting has proven the implementation of a glide path has the ability to result in savings of over $200 billion when compared to non-glide path scenarios.
The obvious choice here, energy efficiency is the lowest-cost compliance option in all states. However, the need to expand programs is critical in order to achieve compliance. According to the proposed model by Navigant Consulting, expansion of energy efficiency programs can save roughly $250 billion above business-as-usual EE through 2030.
Without a doubt, natural gas will play a fundamental role in complying with the Clean Power Plan for states. Due to coal retirements, the Northeast and Southeast will rely heavily on new natural gas plants to supplement energy efficiency, while central and western United States will rely on gas to maintain capacity margins.
Drax advances biomass strategy with Pinnacle acquisition
The Group’s enlarged supply chain will have access to 4.9 million tonnes of operational capacity from 2022. Of this total, 2.9 million tonnes are available for Drax’s self-supply requirements in 2022, which will rise to 3.4 million tonnes in 2027.
The £424 million acquisition of the Canadian biomass pellet producer supports Drax' ambition to be carbon negative by 2030, using bioenergy with carbon capture and storage (BECCS) and will make a "significant contribution" in the UK cutting emissions by 78% by 2035 (click here).
This summer Drax will undertake maintenance on its CfD(2) biomass unit, including a high-pressure turbine upgrade to reduce maintenance costs and improve thermal efficiency, contributing to lower generation costs for Drax Power Station.
In March, Drax secured Capacity Market agreements for its hydro and pumped storage assets worth around £10 million for delivery October 2024-September 2025.
The limitations on BECCS are not technology but supply, with every gigatonne of CO2 stored per year requiring approximately 30-40 million hectares of BECCS feedstock, according to the Global CCS Institute. Nonetheless, BECCS should be seen as an essential complement to the required, wide-scale deployment of CCS to meet climate change targets, it concludes.