On August 3, 2015, the Environmental Protection Agency (EPA) issued the final Clean Power Plan (CPP), establishing the first emission guidelines for existing fossil fuel-fired electric generating units (EGUs). The final rule sets a 2030 emissions reduction target of 32 percent relative to 2005 levels, up from the 30 percent target in the June 2014 proposal. It provides a two-year extension for the submission of final state plans with initial submissions in 2016. Mandatory emissions reductions begin in 2022, with requirements phased in gradually until 2030, when states must meet their overall target. In 2020 and 2021, states that invest in renewable sources like wind and solar will earn credits that can be stored to offset emissions later. States that refuse to implement the CPP would have to accept a federal plan that imposes carbon cap-and-trade rules.
According to the EPA, the CPP will cost $8.4 billion with expected emissions reductions resulting in net climate and health benefits of $25 billion to $45 billion in 2030. By then, coal and natural gas will account for approximately 27 percent and 33 percent of the projected electricity generation, respectively. By increasing efficiency, the EPA projects that the CPP will reduce monthly electric bills by roughly $7 by 2030. The rule covers approximately 3,100 EGUs.
Among the most significant changes in the final plan, the period for mandatory emission reductions is set to begin in 2022 instead of 2020. Additionally, the best system of emissions reduction (BSER)–the target level of emissions for various sources determined by the EPA–applies gradually over the 2022-2029 interim period, so that states have time to implement a broader scope of selecting their emission reduction trajectory, or “glide path”, over that period. BSER calculations exclude emission reductions achievable through demand-side energy efficiency and nuclear generation. Instead, the final rule relies on increasing renewable energy use, with falling costs of renewable energy expected to make compliance easier.
Originally published by EnerKnol.
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