Update on EPA
Activities
MOPC
July 15-16, 2014
Topics Covered
•
•
Current Known Impacts
–
Retirements
–
De-ratings
–
Outage Impact Studies
Proposed Clean Power Plan
2
CURRENT KNOWN IMPACTS
3
Impact on Coal in SPP
(based on recent survey)
Kansas
(MW)
5,000
285
5,127
0
Arkansas
(MW)
5,000
78
0
1,100
Comparison with ITP 10 Assumptions
TOTAL CAPACITY OF COAL
UNITS
Future 1 2025
Future 2 2025
TOTAL CAPACITY OF COAL UNITS
BY STATE
2018 Projection
Future 1
6,000
Future 2
2018
30,000
5,000
25,459
25,000
22,863
4,000
20,475
15,000
Megawatts
Megawatts
20,000
3,000
2,000
10,000
5,000
0
1,000
0
AR
IA
KS
LA
MO
NE
OK
TX
5
Outage Impact Study *
•
•
SPP bi-annual study process
–
Four-year look ahead for reliability issues
–
Weekly snapshots through the four years
–
Scheduled outages taken into account
Current studies indicate there will be adequate time to
perform generator retrofits necessary to comply with known
environmental regulations
–
Retrofits are expected to impact generation supply
economics more than the ability to reliably serve load
* Formerly called “EPA Study”
66
Outage Impact Study Resource Adequacy 2014
2014 Weekly Outages
67,678
7
Outage Impact Study Resource Adequacy 2015
2015 Weekly Outages
67,678
8
PROPOSED CLEAN POWER PLAN
9
EPA Clean Power Plan Overview
•
EPA’s proposed performance standards to reduce CO2
emissions from existing fossil fuel-fired generators
•
Promulgated under authority of Section 111(d) of the
Clean Air Act
•
Achieves nationwide 30% reduction of CO2 from 2005
levels by 2030
•
Proposes state-specific emission rate-based CO2 goals
–
Based on EPA’s interpretation and application of Best System of
Emission Reduction (BSER)
–
Must be met by 2030
10
EPA Clean Power Plan Overview
•
States goals and flexibility
–
Interim goals applied 2020-2029 that allows states to
choose trajectory
–
Offers guidelines and allows states flexibility to develop
and submit State Implementation Plans
–
States may adopt an equivalent mass-based goal
•
States can develop individual plans or collaborate with
other states
•
If state does not submit a plan or its plan is not
approved, EPA will establish a plan for that state
11
Clean Power Plan Milestones
June
June 2,
June
2017
2014
2015
Draft rule
issued
Final rule
expected
State plans
due (with
one-year
extension)
January
2020-29
Interim goal in effect
Oct 16,
June
June
January
2014
2016
2018
2030
Comments
due to EPA
State
Implentation
Plans due
Multi-state
plans due (with
two-year
extension)
Final goal
in effect
12
BSER is Based on Four Building Blocks
Block
Assumption
1. Improve efficiency of
existing coal plants
6% efficiency improvement across fleet,
assuming best practices and equipment
upgrades
2. Increase reliance on CC gas
units
Re-dispatch of Natural Gas CCs up to a
capacity factor of 70%
3. Expand use of renewable
resources and sustain
nuclear power production
Meet regional non-hydro renewable target,
prevent retirement of at-risk nuclear
capacity and promote completion of nuclear
capacity under construction
4. Expand use of demand-side
energy efficiency
Scale to achieve 1.5% of prior year’s annual
savings rate
*Uses 2012 data for existing units and estimated data for units under construction.
13
SPP State Goals by 2030
Fossil Unit CO2 Emission Rate Goals and Block Application (lbs/MWh)
3,000
2439
2368
2331
2320
2256
2162
2010
2,000
1798
1,500
1771
1783
1722
1562
1714
1499
1479
1533
1420
1544
SPP State Average
1,000
2030 Rate = 1,045
1048
910
895
883
Louisiana
SPP State Average
2012 Rate = 1,699
Oklahoma
2,500
741
791
500
Final Goal
Energy Efficiency
Renewable
Nuclear
Redispatch CCs
*Includes Future States with IS Generation in SPP (N. Dakota, S. Dakota, Montana, and Wyoming)
Texas
Arkansas
New Mexico
Missouri
Nebraska
S. Dakota
Kansas
Wyoming
N. Dakota
Montana
0
Heat Rate Improvement
14
SPP State % Emission Reduction Goals
Total CO2 Emission Reduction Goals (%)
80
70
60
50
Average of SPP
States = 38.5%
40
30
20
10
*Includes Future States with IS Generation in SPP (N. Dakota, S. Dakota, Montana, and Wyoming)
Missouri
N. Dakota
Wyoming
Montana
Nebraska
Kansas
New Mexico
Louisiana
Oklahoma
Texas
Arkansas
S. Dakota
0
15
EPA Projected 2016-2020 EGU Retirements
(For SPP and Select Neighboring States)
13000
12000
11000
10000
9000
MW
8000
7000
6000
5000
4000
3000
2000
1000
0
AR
KS
MO
MT
ND
Coal Steam
*Excludes committed retirements prior to 2016
**AEP provided data extracted from EPA IPM data
NE
NM
Oil/Gas Steam
OK
SD
TX
IA
LA
CT
16
SPP State Efforts Underway
•
•
Arkansas
–
ADEQ has already had two stakeholder meetings, June 25th & May 28th
–
Next stakeholder meeting August 28th
–
SPP Staff met with ADEQ to provide an SPP overview
Missouri
–
•
Nebraska
–
•
SPP Staff meeting with NDEQ and Nebraska utilities on July 30th
Oklahoma
–
•
Stakeholder meeting scheduled by MoPSC on August 18th
Meeting being scheduled in August with stakeholders
Texas
–
Public workshop scheduled by PUCT on August 15th
17
How Can SPP Assist?
 Help educate and work with states
 Perform impact analyses
–
Inform stakeholder responses that are due October 16
–
Inform current planning efforts
–
Assist state and member decision making
 Facilitate coordinated SPP response to proposed Clean
Power Plan
 Evaluate and facilitate regional approach
 Coordinate with neighbors
 Other ways?
18
SPP’s Proposed Impact Analysis Framework
•
Perform both reliability and economic analyses
–
Use 2024 ITPNT and ITP10 Future 2 models as base case
–
Develop two scenarios
–
Identify incremental reliability problems and increased APC
•
Perform gas price sensitivity in economic analysis
•
Perform load scaling sensitivity in reliability analysis
•
Report results by October 1
19
Proposed Impact Analysis Scenarios
Parameter
Scenario 1
Scenario 2
Coal
50% retirement
20% retirement
NGCCs*
Increase capacity factor to
70%
Increase capacity factor to
50%
Wind
At least 50% capacity
increase, assume additional
state RPS
At least 50% capacity
increase
Energy Efficiency 1% of load
3% of load
Demand
Response
None
None
Carbon Tax
None
$30/ton
*Will attempt to use existing capacity to replace coal up to existing capacity margin requirements
20