Energy Efficiency in EPA's Clean Power Plan:
Using Building Block #4 to Set and Meet
Emissions Goals
Omar Siddiqui
Senior Technical Executive
RFF – EPRI Webinar
November 4, 2014
Together…Shaping the Future of Electricity
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Innovative solutions that
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more flexible, resilient and
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© 2014 Electric Power Research Institute, Inc. All rights reserved.
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Context for Comments
EPRI’s Role in Informing Public Policy
EPRI provides independent, objective and technically based comments
to numerous regulatory proposals that impact the electric industry
© 2014 Electric Power Research Institute, Inc. All rights reserved.
3
Clean Air Act § 111 (d) Proposal
Building Blocks – “Best System of Emission Reduction”
(BSER)
1
2
Coal Units
Heat Rate
Improvements
Re-dispatch
to NGCC
Units
3
Expansion of
Renewable
and Nuclear
Energy
4
Use of Energy
Efficiency
Reductions of 30% from 2005 levels by 2030
(baseline emissions calculated from year 2012)
© 2014 Electric Power Research Institute, Inc. All rights reserved.
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“At a Glance” EPA Projected Benefits & Costs
30% Reduction in Carbon Emissions from 2005 to 2030
• Climate & Health annual benefits of $48B to $84B in 2030 1
• “Climate Benefits” (Social Cost of Carbon) $30B 2
• Air Pollution Co-benefits (Particulates, etc.) $23B-$62B 3
• Less Annual Compliance Costs $7.3B to $8.8B 4
• 8% decrease in average electric bill – equivalent to
$8/month savings in 2030 compared to states without plans
• Varying carbon reduction impacts from state to state
– 25% of total projected emissions reductions from three
states (Texas, Florida, New York)
SOURCE: EPA Clean Power Plan Regulatory Impact Analysis (RIA) June 2014
1
EPA Option 1. There is a broad range of climate benefits that swing carbon reduction from minority to majority of benefits
2
Only Carbon costs included, not non-carbon GHG costs (e.g. HCl). Assumes SCC @3% Discount Rate and range includes state &
regional approaches
3
Only PM costs included, not SOx or NOx or Visibility
4
Compliance costs include; annualized cost of capital (new plants), heat rate improvements, additional emissions control costs, fuel shifts,
monitoring, reporting, recordkeeping and demand-side energy efficiency actions. Difference is between state and regional approach
© 2014 Electric Power Research Institute, Inc. All rights reserved.
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Summary of Proposed BSER (4)
Use of Energy
Efficiency of
1.5%+ per
year above
baseline
Block 4: Expanded use of demand-side
energy efficiency (1.5% annual increase
over base assumptions)
Commercial
Lighting
Energy
Efficiency
Opportunity
EPRI Approach
– Compare savings
goal to recent EPRI
EE potential study
Midwest
West
ND
WA
MT
MN
ME
SD
OR
ID
IA
NE
IL
NV
CO
NY
MI
WY
UT
VT
WI
KS
PA
OH
IN
MO
WV
CA
KY
AZ
NM
OK
TN
AR
MS
TX
– Leverage EPRI
research on impact
of EE on carbon
reductions
© 2014 Electric Power Research Institute, Inc. All rights reserved.
Northeast
Residential
Electronics
&
Appliances
MD
VA
NJ
NH
MA
CT
Residential
Cooling
NC
SC
AL
GA
LA
FL
South
Commercial
Cooling
Industrial
Drives
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EPRI 2014 Energy Efficiency Potential Study
• EPRI 2014 Energy Efficiency Potential
study used for reference and comparison
• National scope with regional specificity by
U.S. Census Division (with CA, TX, FL
each broken out separately)
• Outlook through 2035
• Residential, Commercial, and Industrial
sectors
• Equipment stock turnover model
• Leverages EPRI R&D on end-use
measures and technologies
• Estimates impact of EE programs
• Does not include impact of other
mechanisms such new codes & standards
not currently mandated
© 2014 Electric Power Research Institute, Inc. All rights reserved.
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U.S. Energy Efficiency Potential Through 2035.
EPRI, Palo Alto, CA: 2014. 1025477
Defining Energy Efficiency Potentials
Technical Potential: Every customer adopts
Technical
Potential
the most efficient available measures,
regardless of cost
Economic Potential: Every customer
Economic
Potential
adopts the most efficient available measures
that pass a basic economic screen
High
Achievable
Potential
High Achievable Potential: Economic
Achievable
Potential
Potential discounted for market barriers such
as customer preferences and supply chain
maturity; indicative of exemplary EE programs
Achievable Potential: High Achievable
discounted for programmatic barriers such as
program budgets and execution proficiency;
indicative typical EE programs
© 2014 Electric Power Research Institute, Inc. All rights reserved.
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Energy Efficiency (Block 4) – Contextualizing the
Savings Target
EPRI modeling indicates proposed 1.5%
annual incremental energy savings target
exceeds economic potential from EE
programs alone
– EPRI results show economic potential of
0.9% incremental savings per year
– EPRI results show achievable potential
range of 0.5% - 0.7% incremental
savings per year
– EPRI achievable potential equivalent to
11% to 14% reduction in 2035 baseline
– EPRI estimates do not include potential
impact of new codes & standards or
other mechanisms
© 2014 Electric Power Research Institute, Inc. All rights reserved.
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Economic
Potential
High
Achievable
Potential
Achievable
Potential
Total U.S. Electric Energy Efficiency Potentials
Relative to AEO2012 Baseline Forecast
Annual
Growth Rate
2012 – 2035
0.85%
Energy (TWh)
5,000
4,500
0.36%
0.20%
0.01%
4,000
3,500
-0.60%
3,000
2,500
2,000
1,500
Achievable Potential
2025
2035
TWh Savings
% Reduction
284
6.8%
488
10.8%
AEO2012 Baseline
Forecast with Achievable Potential
Forecast with High Achievable Potential
Forecast with Economic Potential
Forecast with Technical Potential
1,000
500
2010
2015
2020
2025
Source: U.S. Energy Efficiency Potential Through 2035. EPRI, Palo Alto, CA: 2014. 1025477
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© 2014 Electric Power Research Institute, Inc. All rights reserved.
2030
2035
Achievable Electric Energy Efficiency Potential
in 2035 of 488 TWh …
Equivalent to annual energy produced by
127 Natural Gas Combined Cycle
(NGCC) plants*
Avoiding that many NGCC plants would
save*
– 181 Million Tons of CO2 emissions
– 64,000 Tons of NOx emissions
– $83 Billion in capital cost
– $18 Billion in annual O&M costs
* EPRI data assuming typical NGCC plant of 550 MW nominal capacity at 80% capacity factor
© 2014 Electric Power Research Institute, Inc. All rights reserved.
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2035 Top Two Achievable Potential End Uses by
Region (TWh)…Commercial Lighting Dominates
Com Lighting
Ind Facilities
6.7
1.0
Com Lighting 10.4
Ind Facilities 1.8
Com Lighting 28.2
Ind Facilities 4.0
Com Lighting 6.7
Res Computers 0.9
Com Lighting 9.1
Com Electronics 1.7
Com Lighting
20.8
Com Electronics 2.7
Com Lighting
13.2
Com Electronics 2.5
Com Lighting 8.2
Res Central AC 3.3
Com Lighting
Ind Facilities
Com Lighting 7.9
Res Central AC 1.8
Com Lighting 15.7
Res Central AC 6.7
Com Lighting 15.9
Res Central AC 11.3
Source: U.S. Energy Efficiency Potential Through 2035. EPRI, Palo Alto, CA: 2014. 1025477
© 2014 Electric Power Research Institute, Inc. All rights reserved.
10.4
3.2
Com Lighting 31.6
Res Central AC 9.2
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The Cost of Achievable Potential
Commercial Sector
Residential Sector
Annualized TWh Savings
Annualized TWh Savings
Industrial Sector
Pumps
Process Cooling
& Refrigeration
Fans &
Blowers
Process Heating
Compressed Air
Facilities
(HVAC,
Lighting, etc.)
Annualized TWh Savings
© 2014 Electric Power Research Institute, Inc. All rights reserved.
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Linear Fluorescent
Central AC
PCs
Heat
Pumps
TVs
Water Heating
Linear
Fluorescent
Lighting
Furnace Fans
Screw-in
Lighting
Dishwashers
Displays
Chillers
Heat Pumps
Computers
Central
AC
Electronics (other)
Outdoor
Lighting
Screw-in
Lighting
Energy Efficiency (Block 4): EE CO2 Calculation
• EPRI modeling affirms EE impact on CO2 emissions reductions
• More rigorous calculation methods consider marginal emissions
as function of end-use and avoided generation mix over time
EPRI EECO2
model
© 2014 Electric Power Research Institute, Inc. All rights reserved.
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Additional Mitigation Approaches for Consideration
Not Explicitly Captured in EPA Proposed Rulemaking
• T&D losses due to EE
• T&D efficiency and conservation
voltage reduction (CVR)
• End-use electrification
– Current rulemaking would not
encourage such measures,
despite economic and
environmental benefits to society
in many applications
EM&V a key issue for these
and other EE strategies
© 2014 Electric Power Research Institute, Inc. All rights reserved.
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Together…Shaping the Future of Electricity
Read complete EPRI Comments on 111(d) at
http://epri.co/3002004658
© 2014 Electric Power Research Institute, Inc. All rights reserved.
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