Researchers with Downstream Strategies and the West Virginia University College of Law released a report Oct. 21 addressing West Virginia’s potential for complying with the U.S. Environmental Protection Agency’s proposed Clean Power Plan.
Since it was proposed June 2, the Clean Power Plan, which aims to reduce carbon dioxide emissions from existing power generation facilities, has been causing backlash from the Mountain State’s lawmakers and various industry leaders, who fear the plan would be a major blow to the state’s economy and employment.
Under the rule, West Virginia would be required to reduce its carbon dioxide emission intensity from its 2012 rate of 2,019 lbs per megawatt-hour (MWh) to 1,620 lbs/MWh by 2030 – a goal some fear is impossible.
“I can tell you right now, I don’t think the plan works as it’s proposed,” said Appalachian Power President Charles Patton. “There’s a significant number of shortcomings with the proposal as it exists.”
EPA released four “Building Blocks” as suggestions of steps states can take to comply with the rule, which include: a 6 percent heat rate improvement for coal steam electric generating units; re-dispatching existing natural gas combined-cycle (NGCC) facilities to achieve a 70 percent capacity factor; increasing non-hydropower renewable generation and preserving generation from existing nuclear power plants; and increasing demand-use energy efficiency to reduce electricity use.
Despite the seemingly-helpful Building Blocks, James Van Nostrand, associate professor at the WVU College of Law’s Center for Energy and Sustainable Development and co-author on the report, agreed the rule is difficult to decipher as it stands.
“There are ambiguities in the proposed rule that make it challenging for states to figure out a way forward,” Van Nostrand said. “It would be helpful for EPA to get them clarified.”
But using the Building Blocks, as well as other methods of reduction, researchers came up with one Compliance Scenario for West Virginia to reach the 2030 emissions reductions target – an effort Van Nostrand said is one piece of a larger analysis to help the state adapt to the upcoming regulations.
“We’re trying to get a conversation started; this is one way of getting there,” Van Nostrand said. “These rules are not the end of the world for West Virginia, (though) it’s going to be a challenge.”
Under the Compliance Scenario, the report, titled “Carbon Dioxide Emission Reduction Opportunities for the West Virginia Power Sector,” highlighted the importance of a diverse energy portfolio, utilizing renewable generation and fossil fuels alike.
Tapping into renewables
EPA’s third Building Block recommends states increase non-hydropower renewable electricity generation, estimating 14 percent of West Virginia’s power could come from renewable sources by 2030. In the Compliance Scenario, however, researchers cut that goal in half, assuming the state could increase renewable generation from 2 percent of total generation in 2012 to 7 percent by 2030. Citing a study by the Union of Concerned Scientists, the report states that EPA projections for renewable growth within West Virginia may be higher than what is likely economically achievable by 2030.
To achieve this renewable power target, the report suggests increased utilization of the state’s “untapped” wind and solar potential.
The Mountain State currently has 583 MW of installed wind capacity with another 160 MW permitted for construction. As advancements in wind technology have reduced wind energy costs by 43 percent over the past four years, supporting projections for future growth in wind generation, the National Renewable Energy Laboratory estimates there is between 1,883 and 2,772 MW of wind energy potential in West Virginia. So, in order to reach the renewable generation goal and emissions reduction target, the compliance scenario assumes the state in implement 2,106 MW of total wind capacity by 2030.
Another contributor to reaching the renewable target under the Compliance Scenario is solar power. The Mountain State currently only has 1.9 MW of total installed solar capacity, but, based on relative success for solar power generation in neighboring states, researchers project that the state can achieve 410 MW of total solar generation capacity by 2030.
Additionally, the report suggests that the state increase its hydropower generation despite that it was not included in EPA’s “best system of emission reduction.” Currently, 13 facilities contribute a combined total of 428 MW of hydropower capacity in West Virginia, accounting for approximately 2 percent of state’s electric generation, but the Compliance Scenario assumes an additional 84 MW of hydropower capacity could be added to the state’s total generation capacity by 2030.
However, Patton addressed concerns with this suggestion, including difficulties with attaining permits for new hydropower generation facilities.
“Do you know how difficult it is to get a new hydro plant approved?” he said. “You might as well get a nuclear plant approved.”
Patton added that he wasn’t challenging the idea of mitigating greenhouse gases, but rather he was concerned with implementation and cost issues surrounding the report’s suggestions.
Preserving fossil fuels
While the plan emphasized the need for increased renewable power generation measures, it didn’t exclude fossil fuels.
Not surprisingly, the report stressed the importance of capitalizing on the abundance of cleaner natural gas from the Marcellus Shale basin by constructing new Natural Gas Combined-Cycle plants, co-firing existing coal plants with natural gas and building new combined heat and power facilities.
Currently, West Virginia is one of few states east of the Mississippi with no NGCC plants, according to the report, despite the state’s ample access to natural gas.
New NGCC power plants release fewer CO2 emissions, are less expensive to build and provide the electric grid a more flexible generation resource than coal plants, the report states. So, the Compliance Scenario assumes that the Moundsville Power station, the proposed NGCC station that would be located just outside of Moundsville, will be built and operational by 2030, providing 525 MW of efficient natural gas generation capacity.
Additionally, the scenario addressed three methods of dispatching coal generating units. The first was the method EPA considered while calculating emission limits, in which EPA applied 2012 generation and emissions from coal plants, even though the coal plants that will be generating electricity in 2030 differ from those generating electricity in 2012, as more than 2,800 MW of West Virginia coal generation is scheduled to be retired by 2015 since 2012. As a result, the report argues this method is inadequate for assisting the state’s compliance potential.
The scenario’s second method dispatches all non-retired coal plants at the same average capacity factor, regardless of emission rate. However, again, the researchers found this method inadequate.
The third method, which would bring West Virginia to its target emissions rate under the Compliance Scenario, assumes the state’s coal plants would operate at a 78 percent capacity factor – which is actually higher than 2012 and 2013 capacity factor levels, 60 percent and 66 percent, respectively, excluding plants that are scheduled to be retired – and dispatches the plants with the lowest CO2 emission rates first.
Despite the higher-than-normal capacity factor expressed in the scenario, Patton expressed concerns with the proposal.
“It’s one thing for a plant to be dispatched by the market and another for a plant to be dispatched to meet the EPA’s rules,” he said. “In order to meet these rules you give up efficiency in the way you operate the plant. If you’re operating to reach an EPA regulation, that’s not necessarily efficiency.”
The Compliance Scenario also took a less aggressive approach to utilizing the EPA’s first Building Block, which aims to reduce the amount of fuel needed to generate electricity – thus reducing emissions – by improving heat rates at coal-fired power plants. EPA suggested a 6 percent heat rate improvement, but researchers modeled a more conservative scenario “based on the possibility that West Virginia coal plants have already made half of the efficiency improvements identified by EPA,” the report states.
But Patton still said the 3 percent improvement rate set by the Compliance Scenario is still too high.
Although Van Nostrand said the researchers thought 3 percent sounded relatively reasonable, he said he could understand utilities may still have a hard time reaching the reduced rate and he said they were interested in a more collaborative process with the utilities, Public Service Commission and state Department of Environmental Protection to be able to come to a more attainable standard.
“In West Virginia, we’re losing a lot of inefficient (power plants),” he said. “The ones that are left will be more efficient, so they probably won’t be able to reach that heat rate improvement.”
He added that he thought the first Building Block was the weak link in the EPA’s Building Blocks because it didn’t take into account specific circumstances for each plant, such as those retiring.
“I think that was the weakest part of EPA’s analysis,” Van Nostrand said.
Becoming energy efficient
In order to meet projected energy demand with the planned generation sources, the Compliance Scenario took an aggressive approach to energy efficiency savings, assuming the state could achieve 18 percent end-use energy savings by 2030 by employing existing energy efficiency resources.
In order to achieve these energy efficiency goals, the study recommended the state adopt an Energy Efficiency Resource Standard, which would require the state’s utilities to deliver more energy efficiency services in West Virginia.
“We have a culture in West Virginia of not promoting energy efficiency because our utilities choose not to promote energy efficiency,” he added. “They’re doing it successfully in other states.
“Our utilities do not spend anything on energy efficiency programs in West Virginia,” he added. “Energy efficiency does work if utilities are required to do it. There’s no reason AEP cannot be just as successful in West Virginia as they are in Ohio and Pennsylvania.”
But Fred Durham, director of the DEP’s Division of Air Quality, said this might be difficult for the Mountain State to achieve based on residents’ lack of participation so far.
“Historically, there’s not been a high level of participation in the energy efficiency programs that the utilities already operate in the state,” Durham said. “In West Virginia, there’s an issue of what level could people participate in these programs (because there is) a high percentage of elderly and low-income residents as compared to some states.”
According to Appalachian Power’s Manager of Energy Efficiency and Renewable Technologies Jim Fawcett, the company has had about 10,000 of 480,000 West Virginia customers participate in one of the assessments or rebates.
“When you look at energy efficiency, we very cavalierly say increase energy efficiency by whatever percent (but) energy efficiency is a customer choice,” Patton said. “We can have programs out there, and we do, and it takes a lot of effort to get people to (use them).”
With programs that give people rebates on energy efficiency appliances or other devices, such as heat pumps, many people still wouldn’t be able to afford the capital cost of buying these products, he said.
While Van Nostrand agreed concerns over income and affordability are “legitimate,” he argued energy efficiency costs are a much better investment than costs being put into coal-fired power generation.
“I look at how much Appalachian Power and Wheeling Power ratepayers are paying for the Mitchell coal plant … our customers are better off spending money on energy efficiency,” Van Nostrand said, adding that the cost of running energy efficiency programs is far less than the cost of running an “overpriced coal plant.
“If our customers can’t afford energy efficiency, they can afford coal three times less.”
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