EPA’s Clean Power Plan is a win for renewable energy and energy efficiency
Since announcing the final Clean Power Plan rule on Monday, the Obama Administration has been focusing on the importance of renewable sources of energy, particularly wind and solar. During President Obama’s remarks, he mentioned making “greater investment in our booming clean energy sector, and smarter investments in energy efficiency.”
In fact, the final rule requires more renewable energy than the proposed rule. Instead of 22 percent renewables by 2030, we will now likely see 28 percent. Although 6 percentage points may not seem like much to those of us who wish to see the U.S.become a leader in renewable energy, the increase is a significant feat. That is especially true considering much of the rule's prior focus was on switching from coal-fired power plants to natural gas. However, this switch is still one of the three remaining building blocks of the plan. According to a White House official, we should expect to see natural gas generation to be “business as usual” as opposed to a dramatic increase.
Under the final rule, states now have an option to participate in a Clean Energy Incentive Program (CEIP). States that choose to participate in the CEIP will be rewarded for making early investments in renewable energy and demand-side energy efficiency measures that generate carbon-free MWh or reduce end-use energy demand during 2020 and/or 2021. The EPA will match the allowances or Emission Rate Credits (ERC) generated up to an amount equal to the equivalent of 300 million short tons of CO2 emissions. Wind or solar projects will earn one credit for one MWh of generation and demand-side energy efficiency projects implemented in low-income communities will receive two credits for one MWh of avoided generation. In addition to incentivizing renewable energy, the CEIP encourages taking early steps in low income communities because they experience greater impacts from power plant pollution and climate change.
The EPA stated, “The CEIP specifically incentivizes wind and solar renewable energy because these technologies can be implemented relatively quickly and because stakeholders were concerned that the Clean Power Plan could potentially shift investment away from these zero-emitting technologies.”
Although the EPA removed the energy efficiency component (aka Building Block 4), energy efficiency will still be an extremely important part of states’ compliance with the rule. That is important because - as we’ve mentioned before - energy efficiency is the most cost effective way to reduce energy usage while simultaneously reducing greenhouse gas emissions.
EPA stated that it “anticipates that, thanks to their low costs and large potential in every state and region, demand-side energy efficiency programs will be a significant component of state compliance plans under the Clean Power Plan. The CPP's flexible compliance options allow states to fully deploy energy efficiency to help meet their state goals.”
According to the Home Performance Coalition president and CEO Brian Castelli, “The Clean Power Plan is a positive step for the energy efficiency industry. This allows states to craft their plans to best fit their own specific circumstances, opening the door to further impact and success.” We are thrilled that the final rule is here and that renewable energy and energy efficiency are getting a lot of well deserved attention, but there is still much work to be done. Up until the first deadline, Pennsylvania will be busy working on its state plan. Fortunately, based on Gov. Tom Wolf's and DEP Secretary John Quigley's remarks on the release of the final rule, it looks like increasing renewable energy and energy efficiency will be significant components of Pennsylvania's State Implementation Plan.
Jennie Demjanick is energy policy analyst for the PennFuture Energy Center and is based in Harrisburg. She tweets @JennieDemjanick.