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The Washington Post recently had an article [1] about the effects EPA's Clean Power Plan (CPP) may have on rural power utilities. The article focused on Seminole Electric Cooperative [2], in Florida. Seminole has a coal fired power plant, in rural Putnam County, Fla., that it built in the 1980's, after being encouraged to do so by the U.S. Government. Seminole has more that $530 million invested in environmental control equipment [3], and is worried it may have to shut it down, because of the CPP. The article uses Seminole as an example of a community-owned utility that may face financial difficulties do to the CPP. These concerns may have more to do with the politics of the CPP than what it is actually requiring. Florida, has joined 26 other states, suing [4] the Government over the CPP. However, a study [5] by the Center for Climate and Energy Solutions (C2ES) compared six economic modeling studies, in relation to the CPP, and found a reduction in national electricity generation, from coal, of between 24% and 47%, so by 2030 coal will still be a major contributor to America's electricity generation. Furthermore, much of the reduction in coal generation will be a result of improved efficiency and retirement of older, less efficient power plants than Seminole.

What the CPP is requiring is not out of line with what states, like Florida, are already requiring of their power utilities. Since 1980 Florida power plants have been regulated under the Florida Energy Efficiency and Conservation Act [6] (FEECA), which "declares that it is critical to utilize the most efficient and cost-effective energy conservation systems in order to protect the health, prosperity, and general welfare of the state and its citizens". So there is a long history of utilities having to comply with goal setting regulations, from the state government, that direct them in improving efficiency and conservation. This is important, relative to the CPP, because the state and utilities can use that history to guide them in developing a plan for the CPP. The CPP was specifically designed with this in mind.

In 1989 FEECA required utilities to develop cost-effective programs for use of natural gas. In the past decade generation of electricity from natural gas combine cycle plants has dramatically increased while the use of coal has been decreasing [Fig. 1]. This is driven by the increased availability and decreased cost of natural gas, as well as a long regulatory history, in Florida, of favoring natural gas. Figure 1, shows that the peak electrical generation, in Florida, is May through October, indicating that much of the electricity demand is from air conditioning for cooling. There are a set of technologies that will turn that peak into a valley. The combination of affordable Solar Photovoltaic and electricity storage [7], as well as new air conditioning technologies like thermal energy storage [8], and liquid desiccant air conditioners (LDAC) [9], will turn the business of electricity generation in a state like Florida up side down. This is already happening in Sun Belt states with solar mandates, such as California and Hawaii, where the increase use of solar photovoltaic is reversing the midday peak in electricity use. This has raised concerns that increase availability of solar energy will create a much steeper ramp up in electricity use in the evenings, due to the drop in solar energy. This phenomena has been nicknamed the Duck Back Curve [10], and it is being used as a reason to curtail the connection of domestic solar to the grid. However, this problem can be transformed into a benefit, with effective implementation of energy efficiency and storage technologies.

Fig. 1, Florida Electricity Generation

States have two ways in which they can comply with the CPP requirements for CO2 emissions, from electricity generation in their power sector, a rate based approach or a mass based approach. In the rate based approach states have to achieve a reduction in CO2 intensity (lbs/Net MWh), while the mass based approach states reduce CO2 Emissions (short tons). These reductions are based on emissions from the year 2012, and states have to achieve interim goals for the periods 2022-2024, 2025-2027 and 2028-2029, as well as a final goal in 2030. Florida's requirements are shown in table 1. Even if Florida does not implement the CPP, by 2020 its CO2 emissions rate will drop, as a result of current conservation measures, from 1,247 lbs/MWh to 1,170 lbs/MWh, a 6% reduction. The CPP will require Florida to reduce its emission rate 12% by the first interim period (2022-2224), and 26% by 2030.

Table 1, Florida’s Interim (2022-2029) and Final Goals (2030)
CO 2 Rate (lbs/Net MWh)Percent Reduction in CO2 Rate Relative to 2012CO 2 Emissions (short tons)
2012 Historic1,247118,395,844
2020 Projections (without CPP)1,1706%122,443,236
Interim Step 1 Period 2022-20241,09712%119,380,477
Interim Step 2 Period 2025-20271,00619%110,754,683
Interim Step 3 Period 2028-202994924%106,736,177
Final Goal 2030 and Beyond91926%105,094,704

These requirements will put increased pressure on small rural utilities, like Seminole Electric Cooperative, to adapt. But they will also offer affordable solutions that easily scale to their needs. Seminole Electric has one of the largest renewable energy portfolios, in Florida, and it should continue making these investments, specifically expanding its solar energy holdings and begin investing in mass electricity storage. The CPP supports these types of investments by providing renewable energy credits which can be used to offset CO2 emissions. Solar thermal systems can also be integrated directly with the Seminole coal fired power plant, to preheat water before it goes into the steam boilers. This method has been shown to improve the efficiency of coal fired plants by 3% to 7% [11], while at the same time being 30% to 50% less expensive than building a complete solar thermal plant [12]. However, the two most important things to understand about the CPP are that it does not solve the problem, and its effects on the Power Industry will be minuscule in relation to the energy revolution that is presently occurring. The United Nations [13] has already calculated that the current reductions, in CO2 emissions, planned by the U.S. and other countries are not to enough to prevent the global temperature exceeding 2o Celsius. The CPP will have to be revised, probably before its official start date of 2022. However, by then hopefully the energy revolution that is beginning will be obvious.

References

  1. https://www.washingtonpost.com/national/health-science/whiplash-shift-in-federal-coal-policies-stokes-fear-in-rural-areas/2015/10/23/13dfdb0c-743d-11e5-9cbb-790369643cf9_story.html
  2. http://www.seminole-electric.com/
  3. http://www.seminole-electric.com/index.php/S=0/site/generation
  4. http://www.theguardian.com/us-news/2015/oct/23/obama-carbon-coal-power-plant-epa-lawsuit-republicans
  5. http://www.c2es.org/publications/modeling-epas-clean-power-plan-insights-cost-effective-implementation
  6. https://www.flaseia.org/education/solar-laws/florida-energy-efficiency-conservation-act/
  7. https://www.washingtonpost.com/news/energy-environment/wp/2015/11/09/this-could-be-the-biggest-sign-yet-that-the-battery-revolution-is-here/
  8. http://ice-energy.com/technology/ice-bear-energy-storage-system/
  9.  http://www.greentechmedia.com/articles/read/salty-ac-gains-traction-in-the-market
  10.  http://instituteforenergyresearch.org/solar-energys-duck-curve/
  11. http://www.powermag.com/understanding-coal-power-plant-heat-rate-and-efficiency/?pagenum=6
  12. http://www.technologyreview.com/news/415156/mixing-solar-with-coal-to-cut-costs/
  13. http://www.theguardian.com/environment/2015/oct/30/worlds-climate-pledges-likely-to-lead-to-less-than-3c-of-warming-un
Figures and Tables
  • Figure 1, Create from Energy Information Agency 923 Data: http://www.eia.gov/electricity/data/eia923/
  • Table 1, Obtained from EPA, Clean Power Plan, State At Glance, Florida: http://www3.epa.gov/airquality/cpptoolbox/florida.pdf

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