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Renewable Portfolio Standard

What the New Federal Carbon Dioxide Rule Means for Energy Efficiency

What the New Federal Carbon Dioxide Rule Means for Energy Efficiency

written by Elisa Wood

Energy efficiency advocates have argued for years that energy efficiency should be a first fuel – considered before others in portfolio planning.  Today, they appear victorious with the release of the US’ first-ever carbon dioxide restrictions for existing power plants.

The draft rule places energy efficiency in good position to be a top choice as states create strategies to meet the standard.  Energy efficiency is not only inexpensive, but also politically palatable, say analysts.

“In addition to being the cheapest, cleanest and fastest way to cut down on carbon pollution, energy efficiency investments are strongly supported by the American people regardless of party,” said Peter Altman, director of NRDC’s Climate and Clean Air Campaign.

The proposal – likely to be finalized in about a year – gives states the flexibility to determine how they will meet the goal of reducing carbon emissions 30 percent by 2030.

As guidance, the EPA offers four building blocks that it found effective in analyzing action already underway in several states.  One of the four is energy savings of 1.5 percent annually. The others include making fossil fuel plants more efficient, using more low emitting power like natural gas, maintaining nuclear power and continuing the renewable energy expansion now underway.

States already have been leading the way for years in reducing carbon emissions through energy efficiency and renewables, according to the EPA. The agency noted that  47 states have utilities that run demand-side energy efficiency programs, 38 have renewable portfolio standards or goals, and 10 have market-based greenhouse gas emissions programs.

“Together, the agency believes that these programs represent a proven, common-sense approach to cutting carbon pollution—one in which electricity is generated and used as efficiently as possible and which promotes a greater reliance on lower-carbon power sources,” the EPA said in releasing the plan.

Ernest Moniz, US energy secretary, said that the draft rule gives states “unprecedented flexibility to meet their obligations within an all-of-the-above set of options, tailored to each state’s needs and opportunities. A flexible approach will keep electricity affordable for American families and businesses, spark homegrown clean energy innovation that creates jobs, and increase energy efficiency to save families money.”

The plan can lead to $37.4 billion in savings on electric bills in 2020, if  states use energy efficiency as the key approach to reduce carbon, according to NRDC. The group foresees a surge in energy efficiency-related jobs for electricians, roofers, carpenters, insulation workers, heating/air conditioning installers and heavy equipment operators, as a result of the carbon rule.

NRDC-chart-on-carbon-e1401727652989

NRDC analysis of electricity bill savings if 13 states use energy-efficiency driven carbon reduction plans

 

The EPA also predicts that an efficiency-driven approach will lead to cost-savings. By 2030 the EPA expects electricity bills to be about eight percent lower than they would been without state action.

“The real story here is about economic opportunity,” said Steven Nadel, executive director of the American Council for an Energy-Efficient Economy.  ”Based on our recent study, we project that if states choose the efficiency path in the proposal, they would create hundreds of thousands of jobs and lower energy bills across the country by tens of billions of dollars a year.”

Bennett Fisher, CEO of Retroficiency, said that the decision by the EPA positions building efficiency to play a critical role.

“With 30 percent -50 percent of energy use routinely wasted, building efficiency represents a highly cost-effective, reliable and scalable way not only to reduce carbon emissions, but also boost our economy by saving businesses and consumers money,” Fisher said.

He added that “the EPA got it right when it put the onus on each state to determine its own carbon reduction strategy. There is no one-size-fits-all solution. To achieve these carbon reduction goals, tomorrow’s grid will need to optimize energy usage every minute of every day based on the best resource available at that time – be it clean generation sources, load shifting solutions, or permanent reductions through energy efficiency. Regional and local factors such as weather, building portfolio stock and energy prices all influence and inform the best approach.”

Stacey Davis, senior program manager of the Center for Clean Air Policy, noted that the rules also are likely to boost combined heat and power.

“The good news is that EPA has put forward a flexible approach that will encourage greater efficiency in how we use electricity. The guidance also allows states to take advantage of other domestic clean energy sources like natural gas and renewables—not just end-of-pipe control measures. One option that shouldn’t be overlooked is combined heat and power (CHP)—a technology that can lower energy costs for industrial, commercial and institutional energy consumers. For manufacturers, lower costs mean increased competitiveness,” Davis said.

CCAP recently released a study that highlights the role that CHP can play in lowering compliance costs.

The states must file the plans by June 30, 2016 (although a two year extension is possible under certain circumstances.) But even before that, the proposal undergoes a 120-day public comment period and further EPA review. A final rule is expected out in one year.

The EPA draft rule is here.

What’s your take on the EPA draft rule for carbon reduction?

This article is published under a cross licensing agreement with EnergyEfficiencyMarkets.com



June 3, 2014 2 comments
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Latest CPUC Report on Cost of Renewables in California

written by Walter Wang

The California Public Utilities Commission prepares quarterly reports on the status of the state’s Renewable Portfolio Standard. The latest was released in November. You can read the whole thing here (pdf).

Some of the highlights include:

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December 9, 2013 0 comment
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Governor Brown Signs California’s AB 327 Into Law

written by The Vote Solar Initiative

Yesterday, Governor Brown signed into law AB 327, a comprehensive rate reform bill authored by Assembly member Perea. AB 327 creates more certainty for Californians who want to go solar, ensuring rooftop solar is here to stay in California! We applaud Governor Brown for his vision and leadership in helping to make good on our state’s

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October 8, 2013 2 comments
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AB 327 Approved by CA Senate

written by Walter Wang

California’s much-watched utility rate reform bill cleared its final major hurdle in the Legislature Monday, gaining approval on the Senate floor with a resounding 33-5 vote. This follows months of negotiations and amendments that resulted in the bill – AB 327 (Perea) – including many strong provisions for rooftop solar. If approved on concurrence back in the

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September 11, 2013 0 comment
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RPS Scoreboard

written by Walter Wang

This year, Grover Norquist and ALEC famously declared war on renewable energy, sponsoring legislation to roll-back renewable portfolio standards (RPS) — a fundamental energy policy that 30 states have put in place to increase the amount of renewables powering their grids.

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July 15, 2013 0 comment
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Denmark: The Power of Feed-in Tariffs

written by Walter Wang

Denmark is held up as one of the great success stories when it comes to wind power – and it is. Half of Denmark’s electricity consumption will be generated by wind power in just seven years time. But Denmark has other lessons for those interested in wind power. It illustrates how effective – or ineffective – government support for renewable energy can be.

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May 23, 2013 0 comment
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California Projected to Lead Solar Race Again in 2013

written by Walter Wang

According to the Solar Energy Industries Association, in the second quarter of 2012, California again led the nation in installed solar capacity, with a total of 217 MW. The state is expected to lead the nation in the solar race again in 2013.

According to new research from the California-based

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December 20, 2012 1 comment
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Oversupplied SREC Markets – What Comes Next?

written by Walter Wang

William Nelson of Bloomberg New Energy Finance (BNEF) and Brad Browery of SRECTrade know Solar Renewable Energy (SREC) Markets like the back of their hands. Maybe better. They joined us for the latest edition of our Get Some Sun webinar series to offer their insights on the diverse and often complex nature of SREC markets.

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November 19, 2012 0 comment
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New Report Indicates Solar Power Job Growth in the U.S.

written by Walter Wang

Good news from the economic solar power front. The Solar Foundation (TSF), an independent nonprofit solar education and research organization, earlier this week announced that its third annual National Solar Jobs Census found that the U.S. solar industry employs 119,016 Americans, a figure which represents the addition of 13,872 workers and a

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November 6, 2012 0 comment
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New York’s Blueprint for Solar Growth

written by Walter Wang

Amid the havoc wreaked by Hurricane Sandy, we’re glad to share some good news from New York . . .

The Empire State is at it again, making moves towards ensuring that solar energy is a significant part of its energy landscape. Having increased the state’s commitment to solar development with the NY-Sun Initiative in early 2012, Governor Cuomo

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October 31, 2012 0 comment
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Tuning New Jersey’s Solar Market, Pennsylvania Take Note

written by Walter Wang

While once indifferent to solar, New Jersey Governor Christie turned solar champion today by signing legislation that will ensure that the state is able to sustain its impressive solar growth over the coming years.

And while many solar supporters in Pennsylvania have looked to Harrisburg to address this issue with

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July 24, 2012 0 comment
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Delaware’s RPS Opponents Sent Packing

written by Walter Wang

This week, in front of a packed house of renewable energy supporters and those opposing clean energy, the Delaware House Energy Committee shot down a bill intended to stop the development of renewable energy. Specially, the legislation (HB 247) called for an immediate freeze to the state’s Renewable Portfolio Standard.

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March 30, 2012 1 comment
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How Do We Know When Solar Becomes a Mainstream Energy Source?

written by Walter Wang

How do we know when solar becomes a mainstream energy source?

One tipoff: when mainstream energy companies get serious about solar.

For example, take NRG, a Fortune 250 wholesale energy generator with about 26 GW of capacity in its

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November 8, 2011 2 comments
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Renewable Energy Gets an Impressive Rhetorical Push from Ed Rendell

written by Walter Wang

Yesterday morning’s keynote address at the Renewable Energy Finance Forum was delivered by Pennsylvania’s ex-governor Ed Rendell, who spoke on the possibilities that renewable energy may gain traction through politics. I suppose anything’s possible, so I tried to track with every word – and I’m glad I did.

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June 22, 2011 0 comment
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