Initial Review of the Clean Power Plan (Calculated Emissions and Real Emissions are not the same)

The long awaited U.S. Environmental Protection Agency's Clean Power Plan Final Rule was released on Monday, August 3, 2015. In response to the Proposed Rule, at the end of 2014 the American Nuclear Society organized a large grassroots campaign, which many of you took part in, to have 100 percent of nuclear energy count in the rule. The Final Rule does include new nuclear energy, but is severely lacking in regard to existing nuclear facilities.

In short, the EPA lays out two ways to calculate emissions, by emission rate or by mass of emissions. Calculating emissions by mass is relatively simple; all the emissions from fossil fuel plants are added up. Calculating emissions by emissions rate is a little trickier, but essentially fossil fuel emissions are added up and then divided by the amount of electricity produced (and this is done separately for coal, natural gas, and oil). Emissions goals (by mass or by emission rate) are then calculated and the U.S. states will have to put forward a plan for how to comply with these emissions goals. The important issue with the Final Rule is that only existing fossil fuel plants are affected.

The way that emissions reductions are monetized is through Emission Rate Credits (ERCs), which are given to:

1. existing natural gas plants that increase generation (as long as the emission rate is lower than the average emission rate),
2. new renewables,
3. and new nuclear facilities and uprates at existing nuclear facilities.

This is good news; fully counting new nuclear and uprates at existing facilities is something for which ANS members advocated.

These ERCs are awarded whether or not the new generation is replacing older sources or is just additional generation. For compliance with the rule, existing fossil generators will basically have to increase efficiency or buy ERCs.

The problem arises when calculating emission rate goals; if existing low carbon energy is excluded, it isn't valued. In the Proposed Rule, 5.8 percent of nuclear generation was factored in for goal setting, but in the Final Rule, no existing low carbon sources are counted (nuclear, wind, solar, hydroelectric, geothermal etc.).

What does this actually mean? It means that if an existing low carbon source of electricity is removed, the calculated emission rate doesn't necessarily change. The calculated emission rate would actually go down if the electricity was replaced by new low carbon generation or additional generation from certain existing natural gas plants. Not only that, but those sources would get ERCs for the additional energy they produced. This is precisely what Remy DeVoe, Justin Knowles, and Steve Skutnik were concerned about when they wrote Unintended Anti-Nuclear Consequences Lurking in the EPA Clean Power Plan, except that it's actually worse than the Proposed Rule, since no existing low carbon sources are counted.

Because of this, new renewables, new nuclear, or additional generation at certain existing natural gas plants could get ERCs for replacing generation from a nuclear facility that is shutting down, even if actual emissions go up. And it's not just nuclear that is affected; for example, some of the solar panels in place today will have stopped working in 15 years and will need to be replaced. Just replacing these panels can be considered "new solar generation" and would receive ERCs, even though no physical change in emissions took place. It's also important to note that new fossil fueled plants do not fall under this rule, so a new natural gas plant wouldn't fall under the Clean Power Plan.

Additionally, a new program called the "Clean Energy Incentive Program" (CEIP) is being launched by the EPA in conjunction with the Clean Power Plan. This program gives additional ERCs for wind, solar, and certain energy efficiency projects, but only if they are completed and operational before 2021. The program's goal is to "give states a jumpstart on their compliance programs." Nuclear is not included in the CEIP.

Brad Plumer of Vox estimates that the Clean Power Plan will result in a reduction of total US emissions by 6 percent. The result of this rule may be even less than indicated because existing low carbon sources are not valued and can be shut down without consequence. Not including existing low carbon generation is the Achilles' heel of the Clean Power Plan.