Report: How W.Va. Can Reduce Emissions to Meet Federal Goals

Jun 15, 2015

Credit Downstream Strategies

Two organizations issued a report this week that details how West Virginia can meet the federal Environmental Protection Agency’s proposed Clean Power Plan, a new rule meant to cut carbon emissions from existing power plants.

The Center of Energy & Sustainable Development and the Morgantown-based environmental consulting firm Downstream Strategies released a report titled “The Clean Power Plan and West Virginia: Compliance Options and New Economic Opportunities.” The report was funded by the Appalachian Stewardship Foundation.

James Van Nostrand was one of the report’s authors and is also the founding director of the Center of Energy & Sustainable Development at West Virginia University’s College of Law.

“We have a lot of ‘sky-is-falling’ rhetoric out there,” Van Nostrand said, “that there’s no way that West Virginia can meet the requirements of the clean power plan. This report shows three scenarios where we very easily can meet the Clean Power Plan.”

But he says the path forward is going to be painful.

The Clean Power Plan

The goal of the federal Clean Power Plan is to reduce greenhouse gas emissions in the United States by 30 percent by 2030. The goals are adjusted for West Virginia so that the state only has to reduce emissions by 20 percent before that deadline. But West Virginia’s secretary of the Department of Environmental Protection, the attorney general, and many legislators believe the  EPA goals are too ambitious. They argue the Clean Power plan will hurt our economy without significantly and positively affecting the environment.

Van Nostrand explains how state leaders have been moving in the opposite direction of federal regulators altogether.

“Just within the last three years,” he said, “the utilities have brought investments in three additional coal plants, so this state largely has doubled down on coal for electric generation. That does not serve us well when you look for a strategy to comply with the Clean Power Plan.”

But the report says compliance with the Clean Power Plan will not be optional.

“There’s a litigation strategy that says the state is going to continue to invest in lawsuits against the EPA,” said Van Nostrand, “but at some point there needs to be a compliance strategy because this rule will be coming out this summer and we will have a year to put together a compliance plan. The Just-Say-No route does not serve the interests of our citizens very well.”

Van Nostrand’s report includes details about the 2007 U.S. Supreme Court ruling that EPA is within its right to regulate greenhouse gas emissions because of the threats emissions pose to public health and welfare.

“EPA under the Clean Air Act has the ability to impose a federal implementation plan and that is not going to be as good for West Virginia as if we did it ourselves.”

The Path Forward is Backward

So how do we get there? Van Nostrand and his collaborators have plotted five possible courses forward:

1: Business-as-usual: The report projects business as usual will fall far short of any significant emission reductions.

2: Inside the Fence (i.e., all measures to reduce emissions happen at the power plants themselves):

“The legislature in 2015 passed HB 2004,” Van Nostrand said, “which pretty much tells the state Department of Environmental Protection that when you develop a compliance plan for our state to comply with the Clean Power Plan you will consider only the inside-the-fence measures.”

Van Nostrand’s modeling suggests the inside-the-fence strategy will not come close to achieving a 20 percent reduction in greenhouse gasses.

3: Reduced Exports:

“We export a substantial part of the electricity that we generate in this state,” Van Nostrand said, “so instead of exporting 40 or 50 percent of our electricity out of state, we just generate enough electricity to serve our needs.”

This isolationist scenario leaves other states to figure out how to make up the electricity formerly bought from West Virginia. But Van Nostrand says collaboration might be a smarter tactic. The EPA provides an option for states to collaborate regionally to reduce emissions and if West Virginia went that route, it would extend the state’s compliance deadline from one to three years. Van Nostrand’s report suggests a collaboration with other states could also “allow out-of-state renewable energy projects to satisfy West Virginia’s renewable energy targets.”

The other two potential models that would allow West Virginia to meet EPA goals would require legislators and state officials to make a 180 degree turn when it comes to policy. The report calls these the “all of the above” strategies.

4: All-of-the-Above Scenario ONE

Highlights in 2030:

  • 3% heat rate improvement at coal-fired power plants
  • 10% natural gas co-firing at two coal-fired power plants
  • Coal plants account for 74% of total load
  • Moundsville NGCC plant comes online in 2018, new NGCC accounts for 4% of total load
  • Combined Heat Power grows to 757 MW and accounts for 7 % of total load
  • Wind, solar and hydropower grow to account for 9% total load
  • Demand-side energy efficiency  grows to achieve cumulative savings of 10% of retail sales and accounts for 5% of total load

5: All-of-the-Above Scenario TWO

Highlights in 2030:

  • 1% heat rate improvement at coal-fired power plants
  • 30% natural gas co-firing at two coal-fired power plants
  • Coal plants account for 75% of total load
  • Moundsville NGCC plant comes online in 2018, and a second NGCC plant comes online in 2022, new NGCC accounts for 9% of total load
  • CHP grows to 316 MW through 2030, CHP accounts for 2% of total load
  • Wind, solar, and hydropower grow to account for 8% of total load
  • Demand-side energy efficiency cumulative savings grow to 13%   of retail sales and account for 6% of total load

All of the Above

Van Nostrand’s report details how non-carbon energy sources like sun, wind, and (to a smaller degree) water are all relatively untapped in West Virginia. The all-of-the-above strategies also incorporate natural gas to a much larger extent.

“A good solution is to co-fire with natural gas. Some of the plants are configured in a way that doesn’t make it very difficult to blend in natural gas with coal, up to 10 to 30 percent,” Van Nostrand said.

Another largely untapped, important step is incentivizing efficiency measures, the report says. West Virginia ranks 46th  when it comes to energy efficiency according to the American Council for an Energy Efficient Economy, and while West Virginians still enjoy some of the lowest electricity rates in the country, our bills don’t reflect that fact. West Virginia ranked 15th in total energy consumed per capita according to data collected by the U.S. Energy Information Administration. Van Nostrand says we consume a lot of energy largely because we are highly inefficient.

Utilities in West Virginia argue that efficiency programs are expensive to implement, and that those costs would be shifted onto ratepayers. Van Nostrand contends that it’s substantially cheaper to invest in efficiency measures than it is to invest in coal, and he says there is value in empowering residents to manage their energy usage. He says, utilities already are and will continue to transfer future expenses to ratepayers in any event.

And rates are climbing and will likely continue to do so.

Recommendations:

  1. Removal of legislative restrictions on state plan development
  2. Adoption of an Energy Efficiency Resource Standard
  3. Resurrection and diversification of the state energy portfolio that was dismantled in the last legislative session
  4. Adoption of policies that encourage investment in clean distributed generation resources (including Combined Heat Power (CHP), solar PV, anaerobic digestion, fuel cells, and other small-scale generation resources)
  5. Development of natural gas
  6. Revising integrated resource planning requirements for electric utilities
  7. Collaboration with other states
  8. Supporting regional economic development initiatives