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Behind the Headlines: What New Carbon Rules Mean For New Hampshire

SNL; http://www.snl.com/InteractiveX/Article.aspx?cdid=A-28272515-14375

A lot of reporters were distracted by the big number in yesterday's announcement of proposed reductions in carbon dioxide emissions: 30 percent by 2030. Indeed that was the lead sentence inalmost every news story about the new rules. 

But the 30 percent figure is not how the Environmental Protection Agency will measure success of the new regulations. The figure is arbitrary, chosen to give some nationwide context to what the state-by-state goals would mean.

The goals the EPA actually set vary quite a lot from state to state. And, indeed, how the agency arrived at those figures is a good deal more complicated than just picking a nice, round number.

When setting the goals for each state, the EPA established 2012 emissions as the baseline, and then asked for a certain percentage reduction by 2030.

On its face, the cut for New Hampshire - 46 percent - looks pretty steep. In fact, only four other states have a bigger ask: Oregon, South Carolina, Arizona and, at a whopping 72 percent, Washington.

But digging into the math shows that what’s being asked of New Hampshire is really not as difficult as it might seem.

What's in the Baseline?

For starters, every state’s reduction target is based on something called the historical emissions rate. That’s how much CO2 was created when the state burned fossil fuels for electricity in the year 2012.

Here’s how they calculated it, straight out of the technical assistance document released yesterday. The formula is basically a big division problem: carbon dioxide from fossil fuel plants divided by the electricity generated by those plants.

(click on this picture if you really want to see the nitty-gritty)

Credit EPA; http://www2.epa.gov/sites/production/files/2014-05/documents/20140602tsd-goal-computation.pdf
When showing their math, the EPA used Ohio as their example.

New Hampshire’s starting point was 905 pounds per megawatt hour.  To put that in context it's less than half of what a coal plant emits in New Hampshire (2,382 lbs/MWh) but still more than the natural gas plants (878 lbs/MWh). 

There’s one big take-away here: this “baseline” figure does not account for any renewable or nuclear generation the state has already installed.

That’s huge. New Hampshire got 59 percent of its electricity from nuclear in 2013, and another 16 percent from hydropower, wood burning electricity plants and other renewables. 

Credit EIA; http://www.eia.gov/state/?sid=NH
In 2013,

So why doesn't New Hampshire get credit for already getting a huge chunk of it's electricity from renewable and non-carbon emitting sources?

The trick is in the math. 

How to Reduce

The EPA built the rule on the jurisprudence surrounding the Clean Air Act, hoping that the rules would be able to hold up in court. That means they are built on the best-available current technology, and don’t assume any sort of miraculous breakthrough on technologies that would do something like pull carbon out of a smoke-stack and pump it underground.

The EPA assumed carbon emissions would be reduced by four big categories, which they called “building blocks.” Those are:

Block 1 – Making existing coal plants run more efficiently. Block 2 – Using existing natural gas-fired power plants more, so that coal plants burn less.
Block 3 – Adding renewables or nuclear power, and making sure nuclear plants don't close. Block 4 – Doing more energy efficiency work.

Those blocks work out differently for different states. The EPA assumes that some states, like North Dakota, will not build any renewable energy, and that the potential for energy efficiency and power plant efficiency improvements are highly variable across the states. Here’s what the EPA thinks is possible for just a few states.

Carbon Emission Rates For Select States | Create Infographics

Compliance or non-compliance is based on another big, ugly formula, a variation on the formula used to determine the baseline. This one basically divides carbon dioxide emissions by total electricity emissions.

So here's the trick: while already existing nukes and renewables aren't included in the baseline calculation, they are included in the compliance formula.

(again, click if you really want to get into this hideous thing)

Credit EPA; http://www2.epa.gov/sites/production/files/2014-05/documents/20140602tsd-goal-computation.pdf

These formulas mean that while the EPA is expecting big cuts from New Hampshire, a lot of those cuts have already been accomplished. Fully 76 percent of Granite State electricity generated in 2013 doesn't count toward the baseline.

That doesn't mean the EPA isn't expecting something from New Hampshire. Being compliant will depend on a  number of factors:

1. Keeping Seabrook station in operation, or only closing it when another zero emissions source can replace it.

2. Staying on track towards our renewable energy goals, of 25 percent by 2025, and

3. Ensuring that coal-fired plants actually do run less frequently.

New Hampshire is free to achieve these measures however it pleases. But state officials are likely to stick with the mechanisms that are already in place. Like many other states, the Granite State has a renewable portfolio standard which subsidizes renewable energy, and coal plants will likely run less thanks to New Hampshire's participation in the Regional Greenhouse Gas Initiative (RGGI), which by 2020 caps New England’s carbon emissions at 32% less than today’s.

What's Next

As has been reportedpreviously here, New England is likely going to find compliance to be fairly easy, and already someanalysts are pointing out that this rule is unlikely to have any dramatic impact on the nation’s energy mix.

But there’s a strong argument to be made that if it weren’t for the new rules, the U.S. would actually be on track to start back-sliding and producing more carbon, and that diplomats will now have a stronger hand at the bargaining table in international climate talks.

This is hardly the final word on these rules, which won’t be finalized for another year. States will have at least that much time to come up with their own plans, and then of course there will be the inevitable court challenges.

So stay tuned, there’s lots more where this came from.

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