The Clean Power Plan means changes for coal, but not the ones you might expect

June 18, 2014 |

 

Under President Obama’s recently announced Clean Power Plan, the Environmental Protection Agency (EPA) proposed that states cut greenhouse gas emissions from existing power plants by 30 percent from 2005 levels.

Commenters on both sides of the aisle say this rule means big changes for the coal industry.

But before we get fired up about the changes, it’s important to take a look at the facts: While states will need to retire coal plants at the end of their useful lives to meet the proposed limits, EPA’s rule would give states a great amount of flexibility to avoid coal asset stranding and still meet emissions reduction targets. In fact, valuing the right services from coal plants will prove the more important question for a low-cost, low-carbon electricity system.

Let’s look at why.

First, we need to understand what the rule really means for coal asset stranding. An asset is “stranded” if a reduction in its value (that is, value to investors) is clearly attributable to a policy change that was not foreseeable by investors at the time of investment.

In our upcoming analysis of stranded assets, Climate Policy Initiative finds that if no new investments are made in coal power plants and existing plants retire as planned (typically, 60 years for plants with pollution control technology investments and 40 years for plants without), the U.S. coal power sector stands to experience approximately $28 billion of value stranding from plants that are shut down. While that’s a big sounding number at first glance, it’s very small relative to the size of coal power sector. As the figure shows, that retirement schedule puts the U.S. coal power sector on track to come close to the coal power capacity reductions called for in the IEA 450 PPM scenario to limit global temperature increase to 2°C.

U.S. Coal Power w emissions (2)

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Obama’s climate plan and what it means for states

June 28, 2013 |

 

This post originally appeared on The Huffington Post.

In his climate speech this week, President Obama gave the go ahead for the U.S. Environmental Protection Agency (EPA) to develop national greenhouse gas standards for both new and existing power plants — making carbon regulation under the Clean Air Act the primary action of his broader plan to reduce U.S. carbon emissions.

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Counting on energy efficiency: climate gains from consistent program data

November 30, 2012 |

 

Most experts agree that one of the most cost-effective places to reduce greenhouse gas emissions is in energy efficiency. Over the years, hundreds of programs have sprung up across the U.S. to encourage businesses and households to use energy more efficiently. These programs — also called demand-side management (DSM) programs — hold real promise for climate mitigation.

It’s good that many, many programs exist. It’s also good that these programs are extensively evaluated. However, as Jeff Deason discusses in more depth, each jurisdiction uses its own measurement and reporting practices, resulting in scattered and inconsistently reported data.

As an organization keen to look across evaluations to find best practices, we find this frustrating. In essence, it’s a classic case of comparing apples to oranges — and sometimes a challenge just to locate those apples and oranges in the first place.

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