Exploring a Proposed Carbon Diet for American Power Plants

Dec 19, 2012 by

Climate Change

Power plant emissions of carbon dioxide are slated for restriction. An environmental group sees an affordable way to move ahead.
David J. Phillip/Associated PressPower plant emissions of carbon dioxide are slated for restriction. An environmental group sees an affordable way to move ahead.

Earlier this week, Daniel Lashof of the Natural Resources Defense Council blogged about the group’s new proposal for cutting carbon dioxide emissions from American power plants — not just at the plant itself but by creating incentives for end users to conserve electricity. That means you, me and the businesses that we rely on. Here’s the opener, a link to the rest and a short Q&A I did with Dan to dig in on a couple of questions:

Last week NRDC released a groundbreaking report showing how the Obama Administration can use the Clean Air Act to take a big bite out of carbon pollution from power plants, America’s biggest climate polluters. The report overturns the conventional wisdom that relying on the Clean Air Act to address climate change has to be expensive and won’t have much impact. In fact, the report shows that we can achieve big reductions at low cost, using flexible solutions that drive investment in clean energy to reduce carbon emissions 26 percent by 2020, saving lives and creating clean energy jobs across the country.

Here’s another piece of conventional wisdom the report overturns: Our analysis shows that reducing carbon pollution from the power sector doesn’t have to mean a big switch from coal-fired power plants to natural gas. How is that possible? One word: efficiency. [Read the rest and come back.]

Here’s our chat:


It’s clearly smart to have policies that give incentives to utilities to benefit from, and thus encourage, end-user efficiency; but this has a “back to the future” feel, echoing the norm a couple decades ago, before deregulation split the electricity generation and distribution industry in ways that killed such incentives. Is that echo real?


Actually, electric utility energy efficiency budgets have been growing rapidly over the last five years, from $2.7 billion in 2007 to $6.8 billion in 2011. The emerging model is that the utilities (distribution companies) that are responsible for providing electricity service to their customers act as portfolio managers, integrating all of the resources needed to provide that service, including electricity from spot market purchases, independent power producers, utility owned generation, and demand side management. If state regulators get the rules right then the utilities will have an incentive to pick the combination of resources that delivers the service at the lowest cost to their customers, subject to meeting environmental, and other standards.


Even with the logic in driving efficiency, doesn’t it still make sense to have an “all of the above” plan in shifting to less-polluting energy options, given how a shift from coal to natural gas — while not perfect by any means — also syncs with environmental goals related to other pollutants (mercury, etc.)?


NRDC’s proposal is designed to be performance based; that is, each measure that actually reduces emissions receives credit in proportion to how much it reduces emissions. The question then becomes: What is the least expensive way to meet the emissions standards for carbon dioxide and other pollutants. Our analysis shows that energy efficiency is the biggest part of that least-cost solution, and as a result there is no need to rely more heavily on natural gas than would be the case in the absence of the carbon pollution standards we propose.


You mention renewable portfolio standards but don’t mention a “clean energy standard” — which appears to have wider potential appeal given that it includes nuclear power and natural gas. Is there a reason for this?


Most states with portfolio standards have adopted renewable energy standards, although definitions vary from state to state. Again, any policy that actually reduces carbon emissions will earn credit based on its actual contribution under our proposal.


Most states have renewable standards at the moment, but isn’t a broader standard logical going forward if the goal is to gain momentum away from coal-biased business as usual?


State implementation of the carbon pollution standard we propose would in fact be a broader standard. Renewable portfolio standards and energy efficiency programs would contribute to compliance, but all other measures that actually reduce emissions would as well. The problem with the term “clean energy standard” is that it means lots of different things to different people.

If you have questions for Lashof, fire away and I’ll alert him.


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