U.S. CHAMBER OF COMMERCE

EPA's New and Improved Future: Part IV

By Stephen Eule

In promoting its Clean Power Plan (CPP), the Obama Administration hasn’t been shy about claiming it will be a boon to renewables. A White House Fact Sheet boasts, for example, that CPP will “give a head start to wind and solar deployment.”

Is that true? Well, it turns out there will be virtually no increase in wind, biomass, or hydropower in 2030 above what the Environmental Protection Agency (EPA) is expecting anyway, and only a relatively small increase in “other” renewables, a category that includes solar, geothermal, marine, and other technologies.

But don’t take our word for it.  A new analysis of EPA’s own Integrated Planning Model runs for the CPP Final Rule issued a few months ago prove the point.  The forecasts show that, whether under the agency’s mass-based or rate-base approaches, EPA expects CPP will do little to encourage renewable generating capacity, and even less for renewable electricity generation.

As the data in the table below show, CPP—the crown jewel in the Obama Administration’s climate program—will have essentially no influence at all on the commercial adoption of wind, biomass, or hydropower electricity generating technologies.

Wind energy, in particular, was expected to benefit greatly from CPP. But all of the approximately 35 GW of wind power that EPA estimates is going to get built between now and 2030 is in its base case. In other words, EPA expects that all of the additional wind turbines it’s projecting for in 2030 are going to get built with or without CPP.

That’s right-- EPA own analysis shows that its multi-thousand page climate policy will have no impact on the commercial adoption of wind technology.

If not wind energy, then who will be getting the “head start” the administration asserts CPP will provide if it’s not wind (or biomass and hydropower, either)? The answer appears to be those “other” renewables.

EPA estimates that in its two policy cases, “other” renewables capacity in 2030 will be grow about 40% higher (18 to 20 GW) than in the base case and other renewables generation will be about one-third higher. (Though it’s impossible to tell with the information supplied by EPA, we’re guessing most of this increase is in solar.)

What this means is that CPP’s entire impact is expected by EPA to consist of an increase of about 7% in total renewable capacity and 5% in total renewable electricity generation.

When you boil it all down, then, EPAs CPP follows to a simple formula:

  • shut down coal plants to a point where the grid becomes unreliable;
  • improve energy efficiency—which EPA abandoned as a building block—at a faster rate than the Energy Information Administration thinks is realistic; and
  • increase total renewable capacity and generation slightly by adding a modest amount of (presumably) solar technologies.

And if you’re wondering where natural gas fits into all of this, ponder this gem from EPA’s Final Rule: “. . . emission reductions achieved through the use of new NGCC [natural gas-combined cycle] capacity require the construction of additional CO2 emitting generating capacity, a consequence that is inconsistent with the long-term need to continue reducing CO2 emissions beyond the reductions that will be achieved through this rule.”

That’s EPA’s not-so-subtle way of saying don’t even think about building a new gas plant, because eventually we’re going to shut those down, too. Funny how environmentalists loved natural gas until they discovered we have lots of it.

To conclude, EPA claims that the extraordinarily large amount of new renewable capacity it is projecting out to 2030 is going to get built regardless of whether or not CPP is implemented. So if all the heavy lifting occurs in the base line, that’s where all the cost are going to be—in the base line.

We’ve heard this all before (see here, here, and here). This is just another example of how EPA, with the encouragement of environmental groups, has gamed the system to play down the costs of CPP by putting the expensive stuff in the base line, thus holding CPP blameless. Nevertheless, states still will be on the legal hook for delivering EPA’s base line.

EPA is selling the states a bill of goods. They shouldn’t buy it.

 

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