Analysis says Illinois should aim higher than Clean Power Plan

In Illinois, the Clean Power Plan will not single-handedly spark the kind of renewable energy development and economic and public health benefits that proposed state legislation could achieve, according to modeling and analysis released by the Union of Concerned Scientists (UCS) Wednesday.

The UCS compared the expected developments under the Clean Power Plan; a “Clean Path” scenario that mirrors the provisions of the proposed state Clean Jobs Bill; and a “reference case” assuming neither policy is implemented.

The UCS modeling showed that the Clean Path would spur significantly more wind and solar development and greater energy efficiency improvements than the Clean Power Plan alone.

“By prioritizing renewables and efficiency, that could provide a cost effective pathway for achieving the Clean Power Plan and also reap huge benefits for the state’s economy,” said Steve Clemmer, UCS director of energy policy and research.

The Union of Concerned Scientists is a member of RE-AMP, which publishes Midwest Energy News.

Though the Clean Power Plan was stayed by the U.S. Supreme Court earlier this month pending legal challenges, states can still develop their compliance plans.

“We’re confident that the Clean Power Plan will move forward,” said UCS Midwest energy policy analyst Jessica Collingsworth. “Illinois has stayed pretty quiet about what we’re going to do on the Clean Power Plan. The Clean Jobs Coalition is putting pressure on the governor, but he hasn’t said anything yet, except that he’s reviewing next steps.”

The Clean Power Plan would mean renewable and natural gas generation increasing, the UCS reported, with renewables increasing to 17.3 percent of state electricity sales compared to 11.7 percent under the reference case. That still would not be enough to meet either Illinois’ current Renewable Portfolio Standard of 25 percent by 2025, or the 35 percent by 2030 proposed in the Clean Jobs Bill.

The Clean Path would mean 4,630 MW of wind and 1,330 MW of solar installed beyond what would happen in the reference case, the analysis found. Renewable energy development in Illinois has basically been stalled because of a problem with the design of the state’s renewable portfolio standard, which fails to encourage companies to invest in long-term renewable development. The UCS recommended that even if the Clean Path scenario is not pursued, the state’s renewable portfolio standard should be “fixed.”

Without either the Clean Power Plan or the state legislation – meaning the reference case – both natural gas and coal-fired generation would increase by 2030, the UCS said.

Regarding the reference case, the study says:

“While renewables and energy efficiency also increase by a modest amount in the Reference Case in order to fulfill existing policies — and nuclear generation stays fixed at current levels throughout most of the forecast period — the rise in fossil fuel-based generation results in a 21 percent increase in CO2 emissions by 2025 and a 9 percent increase by 2030, compared with 2014 levels.”

The analysis pegged the health and economic benefits of the Clean Path at $14.3 billion by 2030, thanks to reductions in carbon dioxide, sulfur dioxide and nitrogen oxides that would happen with a switch away from coal plants.

The Clean Path would mean the average household’s energy used reduced by 9.4 percent, the UCS found, for a savings of about $100 per year for families.

The UCS recommends a robust multi-state market be developed for carbon trading as part of the Clean Power Plan compliance strategy, and estimated Illinois could gain more than $600 million in revenue per year from trading allowances between 2022 and 2030.

“[Carbon trading] offers a lower cost of compliance, and in a state like Illinois that has significant cost-effective and abundant renewable resources and energy efficiency potential, they can actually exceed their targets, sell allowances to utilities in other states,” Clemmer said.

Under the Clean Power Plan-only scenario, Illinois’ electricity exports would drop below the reference case level of 26 percent. The Clean Path scenario would see the state exporting 33 percent of its electricity, the UCS found.

“So [under the Clean Path] Illinois is generating about the same amount of electricity but demand is lower, and that allows them to export more,” said Clemmer. “Under the Clean Power Plan with the stronger energy efficiency policies [the Clean Path], most of the renewable energy development and energy efficiency would be deployed in Illinois and the carbon reduction that comes from that would be used to help other states meet their targets.”

The UCS also recommends a mass-based approach to meeting the Clean Power Plan goals, which means carbon reductions would be evaluated on total volume of carbon emissions as opposed to emissions per kilowatt hour.

“We generally think that a mass-based approach is preferable, and one that includes new [generation] sources as part of it, to help avoid leakage” – defined as new emissions from new power plants, said Clemmer. “That won’t allow utilities to build new natural gas power plants, for example, and have them not count [toward emissions limits] and effectively undermine the targets. It’s important to include new sources. We think a mass-based approach is also much simpler to administer and verify.”

The UCS’s modeling assumed that Illinois’s nuclear plants will continue running through 2030, with the exception of an 867 MW unit at the Dresden plant that modeling has retiring in 2029. That assumption mirrors Energy Information Administration and Environmental Protection Agency projections based in part on an expected rise in natural gas prices, which will make nuclear more competitive.

Earlier this week, the UCS released a study suggesting that Minnesota also go beyond its Clean Power Plan requirements with a Clean Path option that would result in new renewable energy development and customer savings at levels similar to those possible in Illinois. The UCS released similar reports for Virginia and Pennsylvania last year, and a report for New Mexico and the U.S. as a whole are expected in coming months.

“We did not analyze a Clean Path equivalent for every state in the country, but certainly Illinois is very well-positioned to meet its targets and benefit compared to other states,” said Clemmer. “It’s got very good wind and solar resources, good efficiency potential, some policies in place that will help get there. But strengthening those policies will take them even further.”

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