As stakeholders weigh in on U.S. EPA's Clean Power Plan, and many urge the agency to reduce the targets established in its draft rule, some in the environmental community are calling on EPA to be even more aggressive in its final rule. During today's OnPoint, Kenneth Kimmell, president of the Union of Concerned Scientists, discusses a new analysis of EPA's proposed regulations for existing power plants urging the agency to raise the overall emissions reduction target to 40 percent by 2030. Kimmell discusses the formula UCS used to determine new state renewable energy targets and explains why he believes an increase in targets will not impact grid reliability.
Monica Trauzzi: Hello, and welcome to OnPoint. I'm Monica Trauzzi. With me today is Kenneth Kimmell, president of the Union of Concerned Scientists. Ken most recently served as commissioner of the Massachusetts Department of Environmental Protection. Ken, it's nice to have you here.
Kenneth Kimmell: Nice to be back. Thank you.
Monica Trauzzi: Ken, UCS has been doing some analysis of EPA's proposed regulations for existing power plants, and you're actually contending, in a new report, that EPA should raise the overall emissions reduction target to 40 percent by 2030. What's the rationale behind this suggested 10 percent jump?
Kenneth Kimmell: Sure. The rationale is pretty simple. One, we have to do it, and two, we can do it. The we have to do it part is the fact that we are trying to maintain the line at a 3.6 or 3.5 degrees temperature increase. That's the consensus for world scientists of where we need to be if we're going to manage the unavoidable and avoid the unmanageable. So that's the goal. Unfortunately, maintaining that line is starting to slip out of our hands worldwide because carbon emissions are still going up. In fact, even in the United States last year, we learned that carbon emissions are going up. It turns out that reducing carbon emissions from power plants are the single most cost-effective thing we can do to bend that curve and get us to a point where we can be safe in the future. So that's why we have to do it, and the good news is, actually, we can do it because of the phenomenal growth in renewable energy. The prices have dropped precipitously, about 60 percent in solar, about the same in wind, and all over the country now, we are seeing renewable energy really penetrating and making a difference.
Monica Trauzzi: So what formula did you use to calculate the renewable energy targets?
Kenneth Kimmell: Right, so what we did, which is different from what the EPA approach did, is we relied a lot on what's happened in the last five years, and we looked very carefully at what's happening in the renewable energy market, and we see that, across the country, renewable energy has grown by about 1 percent a year. We think that that should be a national minimum floor that every state should be capable of meeting. So some of the states that are below that, we're going to give them till 2020 to get to that, but then the expectation is, like other states, they'll be able to grow by that percent. On the other hand, there are some states that are way above that growth rate right now, and so we'll look at what they did in the last five years and assume that they can continue along that path of growth, although we'll cap it at 1.5 percent because we don't want one state doing all the work while other states lag.
The other ingredient that we put in the mix is the fact that many states have committed to legally binding targets, and if they've committed themselves to those targets, those targets should be part of the formula also.
Monica Trauzzi: So which states do you identify as having the greatest potential for increasing renewable energy capacity?
Kenneth Kimmell: A lot of it is the states in the Upper Midwest, the Iowas and the South Dakotas, that already have 25 or 30 percent of their energy coming from wind. There's a lot of states in the Southwest that are capable of building utility-scale solar projects that are competitive with oil and gas. So those -- there's also a real potential for growth in the Southeast also.
Monica Trauzzi: Many of the public comments that are heading towards EPA are contending the opposite of what you're contending, certainly not asking for an additional jump in emissions reduction targets. Stakeholders, states are saying that these targets need to be scaled back. How do you respond to those folks who are saying that it's difficult enough to meet the current level that EPA has established in the draft? What do you say to those folks?
Kenneth Kimmell: Well, I actually think the way the rule is set up, which gives states all these different ways of meeting the rules, gives them the flexibility they need to do it. I think with respect to the renewable target, in particular, we're not even saying that these states have to build the renewable installations in their own state. It would be fine with us, for example, if they bought renewable energy from a neighboring state that does have that ability, but our take on this is we have to go by the experience, and we've seen this remarkable ramping up in the last five years. Texas is now the leading generator of wind energy in the country. North Carolina and Arizona are seeing these huge increases in solar energy. So we respectfully disagree with those states that they can't do it. We think they can do it, and we think their economies will grow if they do, they'll enjoy cleaner air, they'll enjoy jobs, and they'll enjoy a diverse electric grid, which is also very, very important.
Monica Trauzzi: But we're hearing from state utility regulators who have an obligation to consumers on pricing and reliability that the targets are already too high. A 10 percent jump in emissions reduction targets could have negative economic impacts, could it not?
Kenneth Kimmell: Well, I mean, let's, again, look at the experience. Approximately 25 states have renewable portfolio standards, where they're getting more and more of their energy from renewable energy. This has been studied what the cost impacts are, and it's under 1 percent a year, so to put that in perspective, if you have a $100-a-month utility bill, you're paying $1 a month extra to have solar energy and wind energy in your state. That doesn't seem like a very large ask. In terms of the reliability, the federal government studied this, various companies have studied this, and there's a consensus that at least south of 40 percent of a state's electric supply can be done reliably with renewable energy, and so one of the things we do in our formula is cap any particular state at 40 percent to stay within that range that the consensus reveals is -- it can be done reliably.
Monica Trauzzi: So would it make sense for the agencies to just focus on the states that are already suggesting that they might be overly compliant rather than approaching all 50 states and just targeting those states that are saying, "Hey, we're already overly compliant. You can increase our targets"?
Kenneth Kimmell: Well, you know, that's a great question. That's the beauty, actually, of the way this could work. If you raise everyone's target, what that will mean for the states that are undercompliant is they can buy more renewable energy from the overcompliant states. So you need a trading mechanism to make that work, but from a fairness perspective, I don't think it's fair to just ask the states that are doing a great job to do everything, and then the ones that are lagging behind to allow that to continue to happen. There is a fairness issue that I'm sure you've heard a lot about the targets, and we're also trying to address that issue in our methodology as well, by holding everyone to a national standard.
Monica Trauzzi: Do you think the agency has done an adequate job at justifying the targets that they established in the draft?
Kenneth Kimmell: I think they've done an adequate job explaining the targets. I think they're understandable, but on the renewable one, it is the case that the target for 2020 is actually lower than what the energy administration is saying will be business as usual. So EIA is saying we'll hit 9 percent by 2020; the EPA target is 7 percent. So that's a little hard to understand, and similarly, in 2030, it's just barely above business as usual, so this is really where we see an opportunity. We think that the rule should take into account what's really going on in the marketplace and take advantage of that, and that part of the rule, we don't think has really gotten there yet.
Monica Trauzzi: And have you heard anything from the agency or the administrator to suggest that the targets could be scaled up in the final proposal?
Kenneth Kimmell: Well, what we've heard is a willingness to look at everything, which has really been characteristic of their approach all along, which has been very, very inclusive and listening to all different sectors, and I do think that UCS's approach, it's not just a hypothetical. We're going to be submitting extensive modeling data to back it up, and again, it's grounded in the actual experience. So if EPA chooses to raise the target, this is a cost-effective and reasonable way to do it.
Monica Trauzzi: All right, Ken. We'll end it there. Thank you for coming on the show.
Kenneth Kimmell: Thank you so much.
Monica Trauzzi: And thanks for watching. We'll see you back here tomorrow.
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