Why New Clean Energy Bill Cuts More CO2 than Climate Bill

May 7th, 2012 by Susan Kraemer

Retiring Senator Jeff Bingaman has introduced another of his Clean Energy Standard (CES) bills aimed at attracting the needed Republican support to pass. Here’s why this one might work, and why it doesn’t matter that it is so loose in what is allowed.

Utilities would have to get CO2 emissions below .82 ton per megawatt hour. Coal emits about 1.4 tons of CO2 per megawatt hour now, so about half that, like modern natural gas plants emit now.

By including hydro, nuclear, natural gas and (potentially) clean coal (once carbon capture is perfected) along with renewable energy sources like solar and wind means that, after his ten or so attempts to pass a more pure renewable standard over the last decades, this one has what it takes to pass.

The clean energy requirements would start with requiring utilities get 24% of this “clean” energy by 2015, and that would be raised 3% a year for the next twenty years.

Utilities that fail to comply would be levied a 3 cents per kilowatt hour fine for every kilowatt hour of electricity sold that does not meet the requirements, similar to the fines due to failures to meet Renewable Energy Standards in more than half the states now.

What would count as “clean” energy? Quite a lot. As long as a source emits under .82 tons of CO2 per megawatt hour, coal with carbon capture, coal mine methane, nuclear, hydro, biomass and natural gas. Of course most states will choose the renewables: solar, wind, ocean, current, wave, tidal, and geothermal energy.

While this looser standard makes it easier to get the needed Republican votes to get a standard passed, it means it will cost coal states more than a straight renewable energy standard. The EIA says the CES would raise electricity rates after the first decade once carbon capture of CO2 emissions from coal would be likely a reality (but expensive), and historically expensive nuclear plants were included.

But here’s the thing. The only states that would likely choose these less renewable alternatives are some of the eight heavily coal-dependent states that now prevent us from having any national renewable standard at all, (Kentucky, Indiana, Missouri, North Dakota, Ohio, Utah, West Virginia and Wyoming) but even some of them, like Wyoming and North Dakota are defecting to wind now.

At most, it will be these eight states that get more than 80% of their energy from coal that would the ones that will see prices rise if they switch to more expensive alternatives like clean (CCS) coal and nuclear, rather than cheap wind or natural gas.

That is because the states that are most heavily coal-dependent tend to be much more inclined to embrace nuclear than renewable energy. Till now, these states have prevented any renewable energy standard nationally.

So if these states do cut their CO2 emissions – even if it’s with nuclear or clean coal or other source that more renewable-friendly states would never choose – then the U.S. as a whole would still see a big drop in emissions.

In particular, including and encouraging new (more environmentally sensitive) hydro is key, as many red states have hydro.

That is why, paradoxically, the looser standard would cut emissions more than the (un-passed 2009) climate bill’s projected cuts of 14% by 2020. According to the just-published Energy Department analysis, (if enacted) the CES would reduce projected CO2 emissions to fall 4% more by 2020.

Under the EIA “reference” case scenario, which assumes that current energy laws and regulations remain unchanged, annual electric sector CO2 emissions would only fall 12% below 2005 levels by 2020 and 26% in 2035.

By contrast, the CES would reduce 20% below 2005 levels by 2020 and 44% below that level in 2035 – mostly by cutting coal-fired generation by 54%.

Under Bingaman’s bill, the EIA estimates more than 80 GW of nuclear capacity would be added by 2035, compared to less than 10 GW if current policies were to continue, boosting nuclear generation by 62% by 2035, and keeping the U.S. ahead of China, which has the most ambitious nuclear plans in the world.

Both wind and biomass would also see a 42% boost from business-as-usual levels by 2025, the analysis says. But since new wind generation is booming, while nuclear is nearly stagnant, these relative percentages are not as conducive to nuclear expansion as they look.

All “clean” electricity sources installed after 1991 would count towards the 24% requirement, as well as efficiency upgrades to pre-1991 nuclear or hydro plants.

Within three years, additional resources that reduce electric energy loads would be assessed for inclusion, including energy efficiency, biomass converted to thermal energy, geothermal energy collected using heat pumps, thermal energy delivered through district heating systems, and waste heat used as industrial process heat. The waste-to-energy is extremely comprehensive:

‘‘(6) QUALIFIED WASTE-TO-ENERGY.—The term ‘qualified waste-to-energy’ means energy produced—

‘‘(A) from the combustion of— ‘‘(i) post-recycled municipal solid waste; ‘‘(ii) gas produced from the gasification or pyrolization of post-recycled municipal solid waste; ‘‘(iii) biogas; ‘‘(iv) landfill methane; ‘‘(v) animal waste or animal byproducts; or ‘‘(vi) wood, paper products that are not commonly recyclable, and vegetation (including trees and trimmings, yard waste, pallets, railroad ties, crates, and solid-wood manufacturing and construction debris), if diverted from or separated from other waste out of a municipal waste stream.

Although the bill is modeled on the Renewable Energy Standard (RES) as a simple mandate, with punishment for failure, it also includes elements of cap & trade, like the Renewable Energy Credits (RECs) and auctions currently used by the ten RGGI Northeastern states.

Utilities could meet the requirements by buying credits from other producers of clean energy, like the market auctions that rapidly propelled New Jersey (population 9 million, GDP half a trillion) to the #2 solar state in the nation after California (population 33 million, GDP $2 trillion). REC auctions are thus already in use and familiar to utilities in ten Northeastern states.

Unlike the acid rain reduction cap & trade markets that utilities already participate in, that are administered by the EPA, this market would be administered by the energy secretary. Utilities would need to submit clean energy credits, which could be “traded” (bought for cash from complying utilities) to comply with the standard.











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