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February 13, 2019|Westborough, MA

February 13, 2019|Westborough, MA. Patricio Silva. LEAD ANALYST. Planning Advisory Committee. Environmental Update. ISO-NE PUBLIC. Presentation Overview.

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February 13, 2019|Westborough, MA

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  1. February 13, 2019|Westborough, MA Patricio Silva LEAD ANALYST Planning Advisory Committee Environmental Update ISO-NE PUBLIC

  2. Presentation Overview • The Environmental Advisory Group (EAG) assists the Planning Advisory, Reliability and Power Supply Planning Committees, evaluating the impact of environmental rules on the regional power system • System Environmental Performance Overview • National Power Sector Trends • Regional Power Sector Trends • Changes in Federal Environmental Regulatory Policy • Major Environmental Rules Related to Coal, Natural Gas, and Nuclear Generation • Regional Greenhouse Gas Initiative • Massachusetts Global Warming Solutions Act CO2 Cap

  3. Factors Influencing Environmental Performance of Larger Generators* in New England Changes in weather, economic conditions, demand, energy prices, and fuel mix can influence emissions, water use and wastewater discharges Stricter air pollution and water use and discharge limits may reduce emissions, increase water use and wastewater discharges, but could limit availability of affected highly efficient, low-emitting generating capacity, forcing dispatch of less efficient, higher-emitting generating capacity elsewhere in the region Delays in service dates of new electric generation resources, particularly efficient fossil-fuel fired resources, could increase emissions, water use, and wastewater discharges Any additional retirements of low or zero-emission capacity, particularly remaining nuclear resources, could increase emissions, water use, and wastewater discharges Integrating zero emitting renewable resources (wind and photovoltaics) mostly decrease emissions, but some increases in fossil generating units that provide ancillary services (regulation, ramping, and reserves) could increase emissions, water use and wastewater discharges * Presentation only includes environmental performance data from larger generators (> 25 MW) within the ISO New England control area

  4. New England Power System Environmental Performance Overview Air pollution emissions, water use and wastewater discharges from native electric power generation have declined since 2000 Sources: EPA; EIA

  5. National trends

  6. EIA Forecasts U.S. Energy-Related Carbon Dioxide Emissions Increased 2.8% in 2018 Source: EIA

  7. EIA AEO2019 Reference Case - Electric Sector Emissions Projections reflect decreasing coal generation, increasing natural gas generation emissions EIA forecasts the power sector experiences a notable shift in fuels used to generate electricity, driven in part by historically low natural gas prices. Increased natural gas-fired electricity generation; larger shares of intermittent renewables; and additional retirements of less economic coal and nuclear plants occur during the projection period Source: EIA

  8. EIA AEO2019 Reference Case – New England Electric Sector Projected EmissionsReflects impact of existing state laws and regulations Source: EIA

  9. Regional Trends System Generation, Emissions & Water Use Trends

  10. New England Net Energy of Load, Generation (GWh) Source: ISO

  11. New England NOx Emissions by Fuel Type & Prime Mover (Short Tons) Source: EPA

  12. New England SO2Emissions by Fuel Type & Prime Mover (Short Tons) Source: EPA

  13. New England CO2Emissions by Fuel Type & Prime Mover (Short Tons) Source: EPA

  14. Water Withdrawals for Power Generation by Fuel Type in New England (Million Gallons) Source: EIA

  15. Water Consumption for Power Generation by Fuel Type in New England (Million Gallons) Source: EIA

  16. Wastewater Discharges from New England Power Generators (Short Tons/Year) Source: EPA

  17. Changes in Federal Environmental Regulatory Policy

  18. Overview of Federal Environmental Rulemakings Impacting Energy Infrastructure • Clean Water Act • Cooling Water Intake Rule • Steam Waste Water Discharges • Clean Air Act • New Source Review • Mercury and Air Toxics Standards • Cross-State Air Pollution Rule • Regional Haze Rule • Carbon New Source Performance Standards • Clean Power Plan Repeal, Affordable Clean Energy Rule Replacement • Resource Conservation and Recovery Act • Coal Combustion Residuals Rule • Endangered Species Act/Migratory Bird Treaty Act • Protections limited for threatened and endangered species and habitats • Protections limited for migratory birds • Most federal actions intended to either rollback limits or streamline permitting, licensing, or compliance rules for a range of energy infrastructure • Uncertain regional impact, developers see potential adverse impact on levelized costs for various types of energy infrastructure Sources: EPA; MJ Bradley & Associates LLC

  19. Major Environmental Rules Related to Coal, Natural Gas, and Nuclear Generation Sources: DOE; EPA

  20. Major Environmental Rules Related to Coal, Natural Gas, and Nuclear Generation Sources: DOE; EPA

  21. Major Environmental Rules Related to Coal, Natural Gas, and Nuclear Generation Sources: DOE; EPA

  22. Specific Clean Air Act Requirements Have Reduced Power Sector Emissions Source: NADP

  23. Impact of CO2Allowance Pricing on Regional Energy Costs

  24. Fuel Prices and Relative Cost of CO2 Pricing by Fossil Fuel Type Standard efficiency heat rates (MMBtu/MWh) used in graph: Natural Gas: 7.8Coal: 10 No. 6 Oil: 10.2 No. 2 Oil: 11.7 Source: ISO-NE

  25. CO2 Pricing Contribution to Energy Costs by Fossil Fuel Type Source: ISO-NE

  26. Regional Greenhouse GAS Initiative 2017 Program Review and Recent Auction Activity

  27. Regional Greenhouse Gas Initiative (RGGI) Overview Design of Regional CO2 Power Sector Reduction Initiative RGGI Annual CO2Budget Allocation (State %) • RGGI is a cooperative effort to cap and reduce power sector CO2 emissions • RGGI comprises 9 separate State CO2 Budget Trading Programs, which individually issue CO2 allowances that are consigned to regional quarterly auctions and limit CO2emissions of fossil electric generating facilities (RGGI CO2 budget sources) • RGGI CO2 sources are required to possess CO2allowances equal to their CO2emissions over a three-year control period Sources: RGGI; MJ Bradley & Associates LLC

  28. RGGI 4th Control Period (2018-2020) Details RGGI Annual Emissions & Caps (Million Short Tons) 2019 All RGGI (9-States) & New England Cap RGGI 2019 cap: 80.2 million short tons, covers power sector emissions in the 9 RGGI States: New England share 28.1 M 2019 Adjusted RGGI cap: 58.2 million short tons, to account for banked allowances. The adjusted cap is the total number of allowance offered at auction: New England share 20.4 M (35% of total) 155 million CO2 allowances in circulation at the end of the 3rd Qtr. 2018 Auction 42 (December 5, 2018) results: All 13.36 million CO2 allowances offered purchased at clearing price of $5.35/ton Auction 43 (March 13, 2019): 2019 vintage year allowances, quantity to be determined, reserve price of $2.26 Sources: RGGI; EPA (emissions data)

  29. New England RGGI Emissions (Million Short Tons) Sources: RGGI; EPA (emissions data)

  30. Total RGGI Emissions (Million Short Tons) Sources: RGGI; EPA (emissions data)

  31. Total RGGI CO2 Emissions by Primary Fuel Type (Million Short Tons) Sources: RGGI; EPA (emissions data)

  32. Total RGGI CO2 Emissions by Primary Fuel Type (Million Short Tons) Sources: EPA (emissions data)

  33. New Jersey & Virginia Making Progress on Participating in RGGI by 2020 New Jersey RGGI proposal (18 million ton budget in 2020) Virginia RGGI proposal (28 million ton budget in 2020) November 2018: Virginia releases additional modeling showing modest impacts from RGGI February 4, 2019: Virginia State Air Pollution Control Board (VA SAPCD) approved the re-proposed carbon trading regulation opening the public comment period (Revision C17) After executive review and public comment period, the VA SAPCD is expected to consider the final regulation next spring RGGI proposal (Regulation for Emissions Trading (9VAC5 Chapter 140, Rev. C17)) • December 17, 2018: New Jersey RGGI proposes an Sets 18 million ton CO2 in 2020, compared to business as usual projected emissions of 20.6 million tons in 2020 • Cap declines 3% annually through 2030 with other adjustments that are standard to all member states • Covers emissions from currently operating electric generating facilities • RGGI proposal (CO2 Budget Trading Program Rules N.J.A.C. 7:27C and Global Warming Solutions Fund N.J.A.C. 7:27D) Sources: States of New Jersey, Virginia; RGGI

  34. Massachusetts Global Warming Solutions Act Generator Emissions Cap (310 CMR 7.74) Update

  35. GWSA CO2Emissions Cap Update • Limits CO2 emissions in Massachusetts from larger generators starting in 2018 • 2018 CO2 emissions cap set at 9.15 million metric tons • Cap declines 223,876 metric tons each year until 2050 (1.8 million metric tons) • In 2018, affected 48 generating units at 1 new and 21 existing generating facilities • 2018 emissions 7.35 million metric tons: • 1.8 million GWSA allowances surplus • Energy output declined by an estimated ~2.3 GWh in 2018 compared to 2017 • 2019 CO2 emissions cap set at 8.95* million metric tons: • 5.42 million vintage 2019 allowances directly allocated to existing facilities • 1.12 million vintage 2019 allowances directly allocated to new facilities • 605,170 allowances consigned for auction • Allowances initially allocated, auctions phased in over 2019-2021 • Initial auction of 436,559 vintage 2019 allowances held December 18, 2018 • Clearing price of $6.71 per allowance Sources: GWSA Market Monitor; ISO-NE (data)

  36. Massachusetts GWSA Generator Annual CO2 Emissions (Metric Tons) Sources: EPA (emissions data)

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