Clean Air Act (CAA) Section 111(d), the statutory basis the EPA is using for its proposed CO2 reduction requirements for existing fossil-fueled electric generating units (EGUs), directs that the Agency apply the best system of emissions reduction (BSER) that has been adequately demonstrated and that states may use to achieve their state-specific emissions goals.  We here describe the four “building blocks” the EPA has used as the basis for the BSER.

CCS not included
In establishing the BSER, the CAA directs that the EPA must account for both the cost of achieving required reductions and any non-air-quality health and environmental impacts and energy requirements.  Before the proposal was released, there were fears that the EPA would define or partially define the BSER for existing plants as carbon capture and sequestration (CCS), as the Agency did with its proposed New Source Performance Standards to limit CO2 emissions from new or reconstructed fossil-fuel power plants.  But, in the new proposal, the EPA says that requiring CCS at existing facilities would entail “additional considerations” beyond those at issue for new units.

 The EPA states:
“Specifically, the cost of integrating a retrofit CCS system into an existing facility would be expected to be substantial, and some existing EGUs might have space limitations and thus might not be able to accommodate the expansion needed to install CCS.  Further, the aggregated costs of applying CCS as a component of the BSER for the large number of existing fossil fuel-fired steam EGUs would be substantial and would be expected to affect the cost and potentially the supply of electricity on a national basis. For these reasons, although some individual facilities may find implementation of CCS to be a viable CO2 mitigation option in their particular circumstances, the EPA is not proposing and does not expect to finalize CCS as a component of the BSER for existing EGUs in this rulemaking.”

Four building blocks
The building blocks are described by the EPA as a “range of measures that have been amply demonstrated via their current widespread use by utilities and states.”  States would not be required to use each and every one of the measures that the EPA determines constitute the BSER or apply any one of those measures to the same extent that the EPA determines is achievable at reasonable cost.  Instead, in developing its plan, each state will have the flexibility to select the measure or combination of measures it prefers to achieve its CO2 emissions reduction goal. 

In fact, states are not required to install in their compliance plans any of the building blocks the EPA has selected as the basis of BSER.  A state’s obligation is to achieve the emissions reduction goals according to the specified timeline and any legal means it uses to do so would be acceptable to the EPA.  The important point is that the building blocks form the basis of the BSER and thus, the CO2 reduction goals states must meet. 

The EPA says the following four building blocks provided the foundation of its BSER determination for CO2 emissions from existing EGUs:

• Reducing the carbon intensity of generation at individual affected EGUs through heat rate improvements.  Heat rate improvements are changes that increase the efficiency with which an EGU converts fuel energy to electric energy (and useful thermal energy, in the case of units that cogenerate steam for process use as well as electricity), thereby reducing the amount of fuel needed to produce the same amount of electricity and lowering the amount of CO2 produced as a by-product of fuel combustion.
• Reducing emissions from the most carbon-intensive affected EGUs.  Reductions would result from substituting generation at carbon-intensive EGUs with generation from less carbon-intensive EGUs (including national gas combined cycle units that commenced construction as of January 8, 2014).  Electric system operators have a range of EGUs available to dispatch to meet demand.  Under this approach, “re-dispatch” of generation from steam EGUs to NGCC would result in the reduction of CO2 emissions from existing EGUs.
• Reducing emissions from affected EGUs through substitution with low- or zero-carbon generation.  Two types of generating capacity can play this role:  renewable generating capacity and new and preserved nuclear capacity.  The EPA notes that more than half the states have established renewable portfolio standards (RPSs) that require minimum proportions of electricity sales from renewable generation.  Also, the EPA has factored five under-construction EGUs at nuclear plants in Tennessee, Georgia, and South Carolina as an “opportunity to reduce CO2 emissions from affected fossil fuel-fired EGUs at a very reasonable cost.” 
• Reducing emissions from affected EGUs in the amount that results from the use of demand-side energy efficiency.  Demand-side management (DSM) reduces generation of fossil-fuel EGUs by reducing the overall quantity of generation demanded by end-users.  Every state has a DSM program, some of which have been highly successful.  For example, data reported to the U.S. Energy Information Administration show that in 2012, California and Minnesota avoided 12.5 percent and 13.1 percent of their electricity demand, respectively, through their demand-side efficiency programs.

EPA’s analysis of the building blocks includes estimates of the electrical capacity each can provide and the costs of the emissions reductions they can achieve.   

The proposed Clean Power Plan

Part 1-Introduction

Part 2-State specific goals

Part 4-State plans

Part 5-Reactions