Analysis of CSAPR and MATS in FACETS Regulatory Impacts on the US Electricity Sector: A Modeling Workshop Resources for the Future July 19, 2012 Evelyn Wright, KanORS/DecisionWare Amit Kanudia, KanORS h"p://kanors.com/TSViewer/TSV.aspx?Prj=FACETS_RFF Username: guest Pwd: guest FACETS Modeling Approach •  US boOom-­‐up LP model with full intertemporal opRmizaRon in the TIMES framework •  MulR-­‐region in each sector (power sector and fuel supplies for now) •  Unit level detail in power sector, within 32 NERC subregions •  Electricity demand from AEO 2011 by census division •  Coal: 34 supply sources, 3 types, 6 sulfur grades •  Compliance with CSAPR by 2014; MATS by 2017 •  Four scenarios modeled: Base, CSAPR, MATS, MATS+CSAPR •  Retrofit opRons: –  SO2: Wet FGD and DSI –  NOx: SCR –  Hg: ACI and emissions reducRons from SO2, NOx , and PM controls Coal FACETS regional structure naRve to each sector with interregional trade Supplies Demand Supplies Power Results Summary •  MATS has a greater impact on generaRon mix and capacity than CSAPR •  Both policies lead to a temporary shib of generaRon mix away from coal towards gas –  mainly via higher uRlizaRon of exisRng plants –  some addiRonal gas builds aber 2020 •  Coal reRrements are nearly matched by new coal builds in later years, but the regional mix changes •  MATS induces a shib in coal types used, away from Western subbituminous toward Eastern bituminous •  Electricity price increases about 13% (ranges between 3-­‐22% in the census regions during 2017-­‐2020) •  MATS reduces Electricity CO2 by 10% in the short-­‐term and 5% in the long-­‐term GeneraRon Mix – BASE and differences CSAPR and MATS lead to a temporary shib of generaRon mix away from coal towards gas. (15% coal reducRon in MATS cases.) Other generaRon types are hardly affected. Coal and Gas Capacity Details – BASE and differences CSAPR induces <10 GW reRrements; MATS around 50 GW. ReRred coal plants are parRally offset by earlier investment in new gas generaRon, and almost enRrely offset by new coal builds by 2048. Capacity Difference, MATS+CSPAR minus Base Decrease in exisEng coal capacity (large dark circles) Added retrofit capacity (small light circles) Difference is re*rements New coal capacity Most new coal builds occur where reRrements have taken place, but some regions have a net loss of coal capacity. Emissions – BASE and differences NOx and SO2 emissions are lower in MATS+CSAPR than in CSAPR alone, due to more intensive use of exisRng plants with SCR that retrofit with FGD to comply with MATS. Emissions Control Retrofits (GW) [note: not addiRve] Emissions Control Retrofit Capacity ACI SCR DSI FGD Coal ConsumpRon by Type – BASE and differences CSAPR induces a shib towards low sulfur subbituminous coal (light and medium brown bars). MATS causes a shib away from this relaRvely higher mercury coal. Sources of Hg reducRon (MATS over Base) Near-­‐term Long-­‐term o  Coal Elec share drops by 5% (of total) o  Elec Demand drops 4% (elasRcity = -­‐.3) o  Coal EFF adds 4% of the Hg reduced EsRmated using: Coal Type Coal EFF Coal Share Elec Dem Percent Increase in Electricity Prices by Demand Region MATS+CSAPR over Base West of the Mississippi, electricity price impacts reach 20% during the transiRon years, before new capacity is added. Appendix: About FACETS A New, Highly Detailed US Regional Model •  The cost of deep carbon reducRons depends criRcally on geographical relaRonships between: –  Renewable resources, electricity loads, and transmission capacity –  Biofuels producRon, transport and use –  Captured CO2 transport and sequestraRon •  Any US carbon policy will have greatly varying costs across regions of the country, depending on: –
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ExisRng electricity generaRon technology mix Available renewable and fossil resources Energy use paOerns New technology availability, cost, and incenRves State and regional climate, energy, and environmental policies •  The data to support such detailed geographical analysis exists in the US Mo*va*on 15 Design Approach and Development •  Flexible geographic resoluRon driven by the naRve resoluRon of the source data in each sector •  URlize best publicly available data •  Run in conjuncRon with TIAM global TIMES model for resource and carbon offset supply •  Full sector model planned; power sector developed and in use for analysis •  An extended Veda-­‐TIMES framework and a GIS results viewer have been developed to manage voluminous input data and analyze results data Design 16 Regional Structure •  The regional structure of each of the underlying datasets is preserved to minimize “massaging” of the source data, for example: –  Electricity genera*on is located in NERC sub-­‐regions that represent key transmission grids and boOlenecks •  Capacity expansion is tracked by state, to allow for state policy modeling –  Coal is tracked from 30 source regions by coal type and sulfur content –  Electricity demand (later end use demands) are modeled within census divisions Design 17 Data Sources Sector Source Comments Biomass Supply AEO supply curves 16 supply regions Coal Supply EPA IPM 31 supply sources, 3 types, 6 sulfur grades Coal TransportaRon EPA IPM Matrix of 96 coal types to 135 power plant groupings Natural Gas EPA IPM (to power sector only) TransportaRon markups to power regions ExisRng Power Plants EPA IPM NEEDS 32 NERC subregions 15000 plants, indexed by state and county New Power Plants AEO Indexed by state Renewable PotenRal AEO Transmission Capacity EPA IPM Among 32 NERC subregions Electricity Demand AEO 2011 results Census divisions Load curve EPA IPM 6 Rmes of day in two seasons based on historical load Data 18 Power Sector Design and Policies •  15,000 exisRng power plants tracked by state •  Endogenous plant by plant life extension-­‐
reRrement economic decision •  Plant by plant emissions control retrofit opRons •  Renewable resources, capacity factors, and cost steps by NEMS region •  Emissions limits by plant and regional cap and trade •  State renewable porrolio standards Approach 19 Upcoming Developments •  Flexible power plant aggregaRon to reduce model size and enable state-­‐focused analysis •  AddiRonal sectors –  Gas and oil producRon, processing, and transmission –  TransportaRon h"p://kanors.com/TSViewer/TSV.aspx?Prj=FACETS_RFF Username: guest Pwd: guest Approach 20