Saturday, December 7, 2013

How Effective are US Renewable Energy Policies?

U.S. Federal and State Governments have strongly supported expanding many forms of Renewable Power generation in recent years.  As a result, (non-hydro) Renewable Power generation has doubled since 2007.  The most successful Renewable source has clearly been Wind Power.
Data Source – EIA MER Table 7.2a Electricity Net Generation (All Sectors)  
Since 2007 U.S. Wind and Solar Power net generation has increased by 300% and 600% respectively.  The growth in Solar Power (net generation) is, however, only a small fraction of Wind Power (4 TWh vs. 106 TWh; 2007-12), and slightly less than Geothermal + Biomass Power growth.  With continued strong Federal and State support, Wind & Solar Power generation could be expected to continue similar growth rates in future years.
Recent Renewable Power Government Support – Renewable Power generation capacity has been supported by a number of Government policies and subsidies.  The most successful forms of support in recent years appear to be Federal Renewable Energy Production Tax Credit (PTC) and State Renewable Portfolio Standards (RPS).  The PTC Renewable Power subsidies were originally created 20 years ago under the EPACT of 1992.  The subsidies have been extended numerous times up to the current 2.3 cent/KWh Wind Power PTC, which is scheduled to expire Dec. 31, 2013.
The individual State RPS or Renewable Electricity Standards have been developed by 36 States, which collectively generate up to about 70% of total U.S. net power.  The average of these 36 State RPS targets is to supply up to about 20% of total power consumed from Renewable Power by 2020.  If the majority of these States accomplish their RPS targets, total U.S. carbon emissions could be reduced very significantly in the future.
Federal PTC and State RPS Impacts on U.S. Carbon Emissions – The primary objective of expanding Renewable Power generation capacity is to reduce the need for Fossil Fuel Power (primarily coal & petroleum) and reduce the associated carbon emissions.  In recent years (2007-12) total U.S. carbon emissions have been reduced quite significantly.
Data Source – EIA MER Table 12.1 Carbon Dioxide Emissions from Energy Consumption by Source  
Since U.S. carbon emissions peaked in 2007, the combination of Federal and State regulations (and the 2007-09 Economic Recession) reduced carbon emissions by about 730 million metric tons (MMT) per year by 2012.  With exception of the short-term increase in 2010, overall U.S. carbon emissions have decreased.  A previous TEC Post analysis shows that increased Wind+Solar Power accounted for about 100 MMT/yr. (13%) of total reduced U.S. carbon emissions 2007-12.
2013-14 Actual and Projected U.S. Carbon Emissions – The increase in U.S. carbon emissions 2009-10 was due to temporary increases in all fossil fuels; coal-110 MMT/yr., natural gas- 60 MMT/yr. and petroleum-30 MMT/yr.  With the exception of natural gas, coal and petroleum consumption resumed decreasing 2010-12.  This favorable (declining) U.S. carbon emission pattern unfortunately changed during 2013.
Data Source – EIA STEO ‘U.S. CO2 Emissions’.  
Based on actual (2013) fossil fuels consumption rates, the EIA projects that total U.S. carbon emissions will increase by 85 MMT/yr. 2012-13 and possibly an additional 50 MMT/yr. 2013-14.  These projected carbon emission increases are somewhat alarming, particularly since the projections indicate that all the carbon reductions achieved by added Renewable Power capacity installed since 2007 are offset by short-term actual and projected increased fossil fuels consumption 2012-2014.
Sources of Recent and Near Future Increased Carbon Emissions – How can U.S. carbon emissions feasibly increase in the near future despite: 1) 36 States having adopted and implementing aggressive RPS targets, 2) the Federal Government continues to enforce increasing CAFE standards and supporting other efficiency upgrades, and 3) increased cheaper natural gas production continues to favor fuels switching from coal?  In addition, the EPA’s new Mercury and Air Toxics Standards (MATS) emission regulations have effectively eliminated building all new future conventional Coal Power plants and possibly retire many existing plants.
One factor that could affect U.S. carbon emissions is more fully recovering from the 2007-09 Economic Recession, increased GDP, and possibly increased Consumer energy consumption.  However, a review of U.S. energy consumption data shows that recent electric power, natural gas and petroleum consumption are relatively flat.
Data Source – EIA STEO ’U.S. CO2 Emissions’.   
Due to a combination of vehicle and other Consumer efficiency upgrades the EIA current data and projections show that petroleum and natural gas consumption are essentially constant 2012-14.  Coal consumption is currently-projected to increase.  The EIA AEO 2013 further projects that coal consumption could peak temporarily in 2014 and resume increasing after 2016.
Effectiveness of Existing Renewable Power Policies – Why would the U.S. Power Sector’s coal consumption and carbon emission recently increase despite 20 years of PTC and other Renewable Power subsidies, 36 States having adopted aggressive RPS targets, and the recent EPA Coal Power MATS regulations?  The answer to this question is not simple.
Recent increases in coal consumption could be related to the increase of natural gas prices 2012-13.  Not only have natural gas prices increased, but coal market prices have also been in decline.  These market cost factors directionally reverse the attractiveness of fuels switching from coal-to-natural gas.
Wind Power is by far the most successful Renewable Power source over the past 20 years.  However, despite increasing by about 140,000 million KWh 1992-2012, Wind Power only supplies about 4% of total power supply today.  To achieve up to an average-total State RPS target of about 20% Renewable Power by 2020 will require effectively doubling all existing (non-hydro) Renewable Power capacity during this period.  This could reduce Power Sector carbon emissions by 100-200 MMT/yr.; depending on the fossil fuel mix actually displaced.  The total 36-State RPS impacts would effectively off-set increases in coal consumption 2012-14 and possibly a little more.  These results do not appear very promising or effective, particularly when the AEO 2013 projected future power increases are taken into account. Note: the AEO 2013 includes the full projected impacts of existing Federal PTC, State RPS and EPA MATS regulations.
Other issues that can affect future Renewable Power capacity/generation include whether Congress extends the existing PTC at year’s end, interstate ‘carbon leakage’, and the accuracy of auditing actual RPS compliance.  Carbon leakage between RPS and non-RPS States could lead to allocating all Coal Power generation and associated carbon emissions to non-RPS States.  This would enable different States to show satisfactory progress towards their individual RPS targets with little or no improvement in U.S. carbon emissions.  Without critically auditing each State’s Renewable/Non-renewable Power balances (imports-exports-supply/demand) a significant risk of double-accounting existing Renewable Power generation and disposition is also possible.  All of these factors could effectively enable individual state RPS compliance with minimal reduction in actual overall U.S. carbon emissions.
Alternatives to Current Renewable Power Policies – The effectiveness of current Federal and State Renewable Power policies in replacing fossil fuels and associated carbon emissions is highly debatable and not without significant actual performance risks.  Rather than adopting a nation-wide RPS similar to the 36 individual States, the Federal Government has arbitrarily supported various Renewable Power policies and projects over the years.  The current Federal Administration’s obvious strategy is to restrict and reduce Coal Power generation by imposing new stack emission standards.  In addition to the recent new EPA MATS regulations, the EPA is now developing Carbon Emission standards.  The recentlyproposed Carbon standards apply to new Coal Power plants, which can effectively curtail the construction of nearly all new plants in the future.
The EPA also plans to address carbon emissions from existing Power plants.  The risk with this somewhat arbitrary ‘shutdown-most-conventional Coal Power’ approach is that the EPA is potentially putting future U.S. Power Grids’ reliabilities at risk.  This potential Power Grid reliability risk was initially identified by the North American Electric Reliability Corporation (NERC) during the development of the EPA MATS regulations.  Despite the NERC’s expertise and concerns for MATS’ impacts on future Power Grids’ reliabilities, the EPA disagreed and overlooked this very significant risk.
To avoid significant risks to future U.S. Power Grids’ reliabilities and achieve real-sustainable carbon reductions the Federal Government needs to develop a National power policy or National Clean Power Standard (CPS).  An effective National CPS would fully engage the critical technical support of organizations such as the NERC and affected Utilities, to avoid the reliability risks of the current EPA stack emission only restriction strategy.  Rather than encouraging random Renewable Power development and Coal Power shutdowns, the new National CPS should initially develop a detailed plan on how best to expand specific Clean Power sources and retire existing Coal Power plants.  A recent developing Federal regulation proposed by the U.S. Senate could serve as a starting point.  This proposal Federal Clean Energy (or Power) Standard definitely needs to be improved, such as addressing NERC reliability issues, developing a feasible overall plan to facilitate a proposed new National CPS, and including significantly expanded Nuclear Power in the future new Clean Power generation mix.
Improved U.S. CPS Action Plan – To more effectively and safely reduce future U.S. Power Sector carbon emissions requires the U.S. to develop and implement a National CPS in the near future.  Concerned Residents, Voters and Organizations need to persuade their Congressional Senators and Representatives to critically and comprehensively develop a new National CPS that effectively reduces future U.S. Electric Sector carbon emissions, and a new CPS that is consistent with the continued recovery of average U.S. GDP growth and does not put our future Power Grids’ reliabilities at risk.
Syndicated from The Energy Collective

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