Flora Flygt: Clean Power Plan Impact on Transmisssion Planning, Development and Reliability
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Transcript of Flora Flygt: Clean Power Plan Impact on Transmisssion Planning, Development and Reliability
atcllc.com
Clean Power Plan:
Impact on Transmission Planning, Development and Reliability Flora Flygt
Strategic Planning & Policy Advisor
EnergyTech 2015 – November 30, 2015
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ATC Introduction
• 1st multi-state, transmission-only utility
• More than 9,530 miles of lines and 530 substations
• Diverse ownership base
– IOUs, municipals and cooperatives
• Member of Mid-Continent Independent System Operator (MISO)
– 1st economic and Multi-Value Projects in MISO
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• Since 2001, ATC has provided reliable transmission service and economic savings in our footprint – Upgraded or built more than 2,300 miles of transmission lines;
improved 155 existing and built 15 new substations
– Saved customers more than $100 million annually in reduced energy costs with access to markets, reduced losses
– Estimate reduced losses will save 250,000 tons of CO2 annually
• DATC partnership founded in 2011 on a vision of transmission as enabler of efficient energy markets – Committed to delivering a strong portfolio of reliability, economic
and public policy benefits nationally
ATC’s Focus
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Overview of the CPP Final Rule
• Proposes state-specific CO2 limits – Both emission rates (CO2 emissions per megawatt-hour of
electricity produced) and mass-based (total absolute tons of CO2)
• Addresses CO2 emissions from existing fossil-fired plants • Uses “Best System of Emission Reduction (BSER) ….adequately
demonstrated” – Weighted average of coal plant limit and natural gas plant limit
• Allows states significant flexibility in how they meet the goals • EPA will implement Federal Plan for those states who do not
submit approvable plan
CPP Final Rule Timeline
June 2014
Draft rule issued
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Oct 2014
EPA comment deadline
Aug 2015
Final rule issued
Sep 2016
Initial state filings due
Sep 2019
EPA must approve/
disapprove
Jan
2025-2027
Interim goals in effect
January 2030+
Final goals in effect
Sep 2018
Final state plans due
Jan
2022-2024
Interim goals in effect
Jan
2028-2029
Interim goals in effect
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Final CPP Required Reductions
Source: The Brattle Group
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Final CPP Goal Example: Wisconsin
Source: Public Service Commission of Wisconsin
Emissions from Electric Sector Only
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• Setting the State goals – Now set by applying limits on CO2 emitted from coal/oil
plants and natural gas plants – CO2 limits were developed for each Interconnection – Limits applied to the generation mix in each state – Impact: smoothing reductions
• Building blocks – Three, not four; focused on supply side measures – Heat rate improvements reduced from 6% to 2.1-4.3% – Natural gas plants run at 75% of “net summer capacity” – Renewables included only; no nuclear in calculations
Key changes (1): Proposed to Final Rule
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Key changes (2): Proposed to Final Rule
• Implementation begins in 2022, not 2020
• Three interim periods: 2022-2024, 2025-2027, 2028-2029
• Additional provisions to address reliability – States must show they have considered reliability in their
state plans – States can amend their plans if there are reliability
concerns – Rule includes reliability safety valve – MOU between EPA, FERC and DOE to monitor and assure
reliability
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Key changes (3): Proposed to Final Rule
• “Trading ready” mechanisms – Formal agreements between states no longer required – Individual power plants may use creditable out-of-state
reductions to achieve required CO2 reductions without the need for up-front interstate agreements
• Mass-based CO2 targets developed by EPA for each state
• Early energy efficiency credits available (optional) – 2020 and 2021 – Renewable energy and energy efficiency projects in low
income areas will be awarded emission rate credits or allowances
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Key changes (4): Proposed to Final Rule
• State plans – Must describe how reliability impacts have been
considered, including consultation with an appropriate reliability or planning agency
– Must file by 9/6/2016 but may be “initial” filing requesting extension to 2018
– Choose one of two types of plans • Source based “emission standard” plan or “state measures” plan that has
backstop emission standards
– Must demonstrate outreach efforts to low income communities, people of color and tribal communities
– Must describe impacts on low income communities
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• Transmission
– EPA believes they have provided time for needed infrastructure to be built
– Any needs can and will be dealt with through normal planning and development processes
• Reliability
– EPA has entered into MOU with DOE and FERC to track reliability as the plans are developed
– EPA has stated that EGUs may run over their allowed time for reliability purposes as long as the emissions are reduced somewhere else
– Is reliability safety valve
– EPA expects use of RSV to “be extremely rare”
– Expect it to “ensure the absence of adverse energy impacts”
Transmission & Reliability
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• ERCOT – Estimated retirement of 4 GW of coal capacity – Exceed thermal capacities on 330 miles of transmission and 11
transformers
• SPP – Up to 13.9 GW of generation at risk for retirement (draft rule analysis) – $600 million/year increased energy costs and $13.3 billion in total capital
costs; annual compliance costs = $2.9 billion
• PJM – At-risk generation of 6 GW, 16 GW and 32 GW studied
• MISO – Additional 14 GW of generation at risk – $55 billion in NPV additional costs with regional approach and non-
building block
– Multi-billion dollar transmission build-out needed in the scenarios studied
Impacts on Generation Mix & Reliability
Additional Approaches to Meeting CO2 Targets
• Co-firing or switching to natural gas • Carbon capture and sequestration
• New natural gas combined cycle generation (NGCC) • Heat rate improvements for fossil generators
• Co-firing lower carbon fuels • Transmission efficiency improvements
– “Just as end-use energy efficiency can reduce mass emissions from affected EGUs, so can transmission upgrades.”
• Energy storage technology • Retirements
• Market based trading programs
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Views on Clean Power Plan (CPP)
• ATC does not take a position on merits of CPP • The company is solely focused on transmission
issues – Maintaining reliability of the transmission system – Ensuring transmission is considered in compliance
plans – Supporting regional and inter-regional planning
processes to identify projects needed for CPP – Ensuring that competitive processes are capable to
efficiently identify developers for regionally cost-shared projects in time to meet compliance deadlines
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Reliability Considerations
• ATC’s primary position is that the reliability of the transmission system must be preserved – Decisions to retire plants, interconnect new plants, use
existing plants differently must consider impacts on grid
– Revisions in final rule – e.g., Reliability Safety Valve – step in right direction, but long-term consideration still needed
• Timing is a key issue – Transmission generally takes 5 to 10 years to construct
– State compliance plans are due between 2016 and 2018
– Interim compliance begins in 2022
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Planning Considerations • Transmission should be considered as part of the solution
– Interconnection of new resources – Access to regional resources and energy markets
• ATC supports MISO’s efforts to study the impact of CPP and to identify potentially needed transmission – Scenario analysis enables the identification of what facilities
might be necessary under broad range of outcomes – MISO should coordinate with neighboring planning regions to
explore what inter-regional projects might be needed
• Competitive bidding processes should be refined to avoid any unnecessary delays in identifying developers for regionally cost-shared projects needed for CPP
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Ultimately …
• Reliability of the transmission system must be preserved
• Transmission should be considered as part of solution
• RTO planning processes should be leveraged now to get a jump on identifying transmission that might be needed
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