New U.S. EPA Clean Power Plan Guidance for Mass-Based Emission Rates

On November 6, 2014, U.S. Environmental Protection Agency (U.S. EPA) published a technical support document (TSD) that provides guidance on converting the Clean Power Plan (CPP) emission intensity-based goals in terms of pounds of carbon dioxide (CO₂) per megawatt-hour (lb/MWh) to a mass-based equivalent in metric tons.  Specifically, the TSD provides two (2) illustrative approaches on how a state or local agency could convert its lb/MWh goal to total metric tons of CO₂.  

Why is this important? Early indications are that many states will consider an interstate trading program as a compliance option for CPP.  Traditional trading programs are based on mass emission rates, and regulatory agencies desire a program under CPP that is consistent with existing programs.

Let’s take a quick look at the two (2) potential methodologies described in the TSD that are used to convert CO₂ from a rate basis to a mass basis.

The first approach produces mass-based equivalents is limited to existing affected fossil fuel-fired sources, while the second approach includes both affected and new fossil fuel-fired sources.  Both methods of calculating the mass-based equivalents use the following simple form equation:

Now that the general equation is defined, let’s take a more detailed look at the first calculation approach.  In this approach, a mass equivalent generation level is calculated using data from the June 2014 and October 2014 proposal’s calculation appendices, which can be found here.  This approach begins by quantifying the historical generation from the affected fossil fuel fleet using the following calculation:

The historical affected mass generation rate is then used to calculate an adjusted affected fossil generation quantity as seen below:

From here, the existing and incremental non-fossil generation is included to obtain the mass equivalent generation level as detailed below:  

Now let’s take a look at the second calculation approach.  In this approach the mass generation rate includes new fossil fuel-fired sources and assumes that the new sources contribute an amount of incremental generation that is equal to projected demand growth.  This step uses an annual average growth rate based on regional demand projections to calculate projected sales for future years. An example equation can be seen below:

From here, the projected sales are converted to a generation increment, which accounts for transmission losses and generation from NGCC facilities that are under construction.  The conversion can be seen below.  The final incremental demand levels for new generation can also be obtained in Appendix 2 of the TSD. 

Finally, the incremental demand for new generation is added to the generation from existing affected sources, building block three (3) generation, and building block four (4) avoided generation.  The relationship is provided below:

Once the mass equivalent generation levels have been calculated for each approach, the mass equivalent in metric tons can now be calculated using the equation below:

The final mass-based equivalents for each state or local agency have been published in Appendix 4 and 5 of the TSD.

Through the use of these calculation methods, U.S. EPA continues to work toward a final rule that enables affected jurisdictions to develop their own course to meet targets for reducing carbon pollution.  However, one (1) prominent group has already provided some initial feedback on U.S. EPA’s proposal approach.  The National Association of State Energy Officials (NASEO), whose members represent energy officials from each U.S. state and territory, has expressed its dissatisfaction with the proposed approach, and has requested a “specific protocol” from U.S. EPA in the form of a new guidance document to convert the intensity goals to mass-based limits.

As a reminder, U.S. EPA is still accepting comments on the proposed CPP that was published on June 18, 2014.  The comments on the proposed CPP published on June 18, 2014 are due no later than December 1, 2014.