Power Plant Rules

Posted on August 20, 2014
Posted By: Rick Barnett

On 6/25/13, the Obama administration released their "Climate Action Plan" (CAP). This re-confirmed the nation's 2020 goal from the 2009 Copenhagen Accord, to reduce carbon emissions to a level 17% below 2005. Some have criticized the Copenhagen goal for being too modest, particularly when compared to the recently adopted European Commission's 2030 emissions goal of 40% below the 1990 level.

Prior to CAP's release, federal climate action had been on a slow track since the Clinton administration, and the 1993 "Climate Change Action Plan". At that time, returning to 1990 emission levels was within reach, and federal programs were directed to "reduce our nation's emission of greenhouse gases to 1990 levels by the year 2000, and do so in a cost-effective way" (p.6).

As part of that effort, the 1997 State Department "Climate Action Report" conveyed a strong message about power sector emissions: "electric utilities are collectively the largest producers (approx. 35%) of US CO2 emissions" (page 61).

Since then, considerable attention has been directed at emissions from generating electricity. Reducing this source became a priority in the current administration's climate agenda. Just two days after the CAP announcement, Georgetown University hosted a day-long meeting entitled, "Reducing Carbon Emissions from the Power Sector: State and Company Success Stories". Leaders from utilities, States, Federal Agencies and the White House shared stories about current "best practices" for carbon reduction programs. This meeting established a new baseline for utility programs that address the industry's emission-constrained future.

Released by EPA Administrator Gina McCarthy on 6/4/14, the "Clean Power Plan" (CPP) has a 2030 target of reducing power sector emissions to 30% below the 2005 level. The new rules will require the industry to track emissions from generating electricity and report to State regulatory agencies.

Just days before the CPP announcement, the US Energy Information Agency reported increasing energy-related emissions. "Comparing calendar year 2013 to calendar year 2012 as well as the first two months of 2014 to the first two months of 2013, EIA data indicate that CO2 emissions from energy consumption grew as follows:

  • - Residential sector: 4.79 percent and 15.32 percent
    - Commercial sector: 2.79 percent and 10.47 percent
    - Industrial sector: 2.58 percent and 5.18 percent
    - Transportation sector: 0.60 percent and 1.07 percent
    - Electric power sector: 0.88 percent and 11.48 percent"

An ABCNews/Washington Post survey shows that 63 % favor the new rules, even if their monthly power bill goes up $20. A willingness to spend anything for regulations is an unexpected finding, and indicates a rise in the public's concern about emissions.

The CPP will measure its success in terms of emissions per unit of electrical output (CO2/MWh). If demand continues to rise, actual emissions could increase in the process of meeting the Power Plan "reduction" goals. An informative post from Michael Gillenwater (Greenhouse Gas Management Institute) included details about how results will be evaluated.

The CPP announcement was the first of many steps. As noted in the 6/16/14 San Francisco Chronical, States won't submit compliance plans until June 30, 2016. During this process, widely varying claims about the Plan's impact will be used to influence State decision-makers and public opinion.

EPA is already predicting the results of the impending rules. For example, Energy Manager Today recently reported: "Clean Power Plan will shrink electric bills 8%, says EPA" by "increasing energy efficiency and reducing demand in the electricity system".
For CAP and CPP goals, credit for "increasing energy efficiency" will result from installation of "energy-saving" higher efficiency products (light bulbs, fiberglass insulation, thermostats, appliances, furnaces, etc.). Regardless of actual use, a newly-installed product's efficiency rating can be statistically converted into reduced future consumption and then credited toward emission goals. Through this convention, products that consume electricity are expected to play a key role in reducing electric utility emissions.

Unfortunately, with only one meter on a house, we are unable to measure how much energy is saved by an individual efficiency product. If the product is used more than estimated, the energy bill could increase rather than shrink.

In a recent article, I described "Thermal Optimization", the step after weatherization for residential thermal efficiency. With established rigid insulation technology, and performance scoring to measure a home's reduced need for energy, Thermal Optimization can help utilities respond cost-effectively to the new rules and related constraints.

Unlike individual energy products, a "rigid wrap" retrofit is a complete efficiency system, merging the thermal and structural shells to eliminate thermal defects. As a result, the reduction of a home's energy consumption is permanent, significant and can be measured rather than estimated.

More than other demand side options, Thermal Optimization can help a utility to address emission limits while better serving customers: who wouldn't prefer maintaining their interior comfort with the least amount of energy?

Authored By:
Rick Barnett has a B.A. in psychology (UCSB) and an Interdisciplinary Master’s in Environmental Management (Oregon State University, 1981).  Before becoming a builder, Rick introduced the Oregon waste management industry to recycling in 1976, and over the next few years convinced many to offer recycling as a service.  Oregon has been a national leader in recycling ever since.Rick started Green Builder in 1996, and was recognized in 1998 by Sustainable

Other Posts by: Rick Barnett

Efficiency Gap - March 07, 2016
Energy Asset - January 21, 2016
After Weatherization - September 25, 2015
Energy Customers - April 08, 2015


August, 20 2014

Richard Vesel says

Good article, Rick.

A few things to add to the picture: Individual appliance energy monitors are available for less than $20 now, and Black and Decker (and other) IR heat leak detectors are under $30. I recently purchased two of the former and one of the latter on Amazon for under $70. Monitoring the energy consumption of a chest freezer and indoor refrigerator at the moment, and when the weather turns cold, I will use the IR detector to look for gaps in insulation around doors and windows.

If someone were to come up with a panel that you could easily integrate into your home or business breaker box, then other large users of energy, such as HVAC systems, could be checked for usage, and operating modes might be adjusted to conserve even more electricity.

Dollars spent on improving basic efficiency are at least three times as cost effective as building additional generating capacity. That same rule applies to efficiencies gained within the generation facilities themselves. Utilities are their own largest users, with each site consuming from 3-7% of gross plant output, just to operate internal equipment.


August, 20 2014

Michael Keller says

What complete nonsense. There is no way in hell electric bills can get lower if: (1) existing power plants (which have no debt) are replaced by more expensive units whose debt must be included in price of power or (2) existing power plants must be retrofitted to to "capture" CO2. Simple economics.

The EPA is run by a bunch of liars and cannot be believed.

Efficiency improvements make sense, but for economic reasons. The actual impact on global CO2 emissions is, however, negligible, as simple mathematics clearly demonstrates.

August, 21 2014

Richard Vesel says

Yes, and your own personal tax dollars are meaningless, except when viewed as part of the aggregate. EVERY reduction in CO2, provided it is done at a low and tolerable cost, is worthwhile.

We are still not doing the really low cost and low impact things yet, such as seeding the oceans with appropriate iron-based fertilizers to stimulate controlled algae growth. Every ship crossing the Atlantic and Pacific could be churning in fertilizer solutions in their wakes, in selected zones, and sequestering thousands of tons of CO2 for every ton of iron added.

When the global problem is now exceeding 30+ billion tonnes per year in emissions, all major sources have to be examined for reduction. Thankfully, we have CAFE standards in place for the transportation sector, and at a good start at addressing the large stationary sources.

At Coal-Gen this week, there is already speculation that under the Clean Power Plan, states will begin to implement regional cooperations to spread risk, trade CO2 credits, and create more effective and innocuous methods for addressing the 30% reduction targets.

At least it's a start in the necessary direction.


August, 21 2014

Richard Vesel says

Mr. Keller,

The "simple math" approach is this: If utility rates go up 10%, but my individual consumption goes down 20%, my BILL declines approximately 12%, yes? That's the way electric bills can/decline.

Example: Original "old" bill = $100 New bill before consumption reductions = $110 New bill after consumption reductions = $88 Net decrease: $12 = 12%

Agreed that CO2 capture at all coal plants is nonsense. There are isolated but particularly large plants where it does make sense financially. NRG Parish plant is implementing a project right now, to the tune of $1B, which will not add a penny to rates. It will be funded by the enhancement of oil recovery in one of their own oil fields about 80 miles from the plant, improving recovery by a factor of 30! This is not crank news...it is real.


I'll be at this plant in two weeks, walking down this unit.


August, 21 2014

Michael Keller says

Well, if we are going to play "magical assumptions": if your bill ($/MWH) goes up by 50% and you reduce consumption by 20%, then you are paying a lot more for power.

It may have escaped your notice, but the amount of CO2 created by power plants vastly exceeds the needs of the "oil patch"; oil patch needs are more of a niche application.

Further, not only does capturing CO2 significantly increase the capital cost of a power plant but the the efficiency of a power plant is significantly reduced as well, which means even more power is required to meet a set grid load requirement.

To suggest that CO2 capture will not significantly increase power bills is grossly out of touch with economic reality.

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