MISO PANEL TO LEARN OF CLEAN POWER PLAN COMPLIANCE COST-CUTTING OPTIONS
Midcontinent Independent System Operator states would need less capital investment to comply with the Clean Power Plan if they would measure their emissions in tons/year, rather than tons/MWh, according to a report to be presented Wednesday.
On Wednesday’s MISO Planning Advisory Committee agenda is a report on MISO’s near-term analysis of the US Environmental Protection Agency’s Clean Power Plan, which calls for the existing generators to decrease their carbon dioxide emissions by 32% by 2030, with interim targets earlier.
States have two options on how their emissions cuts would be measured. If states choose the “rate-based” method, they would measure the rate that their existing generators emit, in tons/MWh generated, according to an EPA fact sheet. The other option would entail converting the rate-based goal to the tonnage they would be allowed to emit over a time period, known as the “mass-based” method.
“Regionally, mass-based compliance is less expensive than rate-based compliance, with the gap increasing over time,” according to a presentation by Jordan Bakke, MISO senior policy studies engineer. “Early compliance targets can be met through renewable portfolio standards and coal-to-gas redispatch, but comprehensive planning needs to start today to meet increasingly stringent compliance targets in the mid-2020s.”
MISO’s existing coal-fired fleet, of which 12.6 GW is assumed to retire because of the Mercury and Air Toxics Standards rule, would also face “increased risk under the CPP,” the presentation said.
By 2030, under a mass-based measurement method, six coal units could be expected to remain idle all year, while under a rate-based method, nine coal units would stay idle.
However, under mass-based compliance, “system dispatch faces relatively less change — and thus may require less capital investment” if more renewables are brought online and CO2 allowances are traded regionally.
These projections assume all states choose either mass-based or rate-based methods and that natural gas prices mirror those in the MISO Transmission Expansion Plan 2015, which was $4.67/MMBtu in 2015.