Clean Power Plan Repeal: Myth vs. Reality

With EPA administrator Scott Pruitt’s announcement that the Trump Administration was formally proposing repeal of the so-called “Clean Power Plan” (CPP), certain voices in the blogosphere and media predictably went nuts. In the formal response from IER, we have already applauded the announcement as promoting liberty in energy markets and keeping energy more affordable for American households. In the present post, let me further respond to some of the (hysterical) reactions that are based on myths.

Myth #1: “The Obama Administration never started a ‘war on coal.’ This is a bogus GOP talking point.”

Here it would be harder to find a smokier gun than then-presidential candidate Senator Barack Obama, speaking in a public forum to the San Francisco Chronicle back in January 2008. In this clip he says, “…understanding what is at stake, and climate change is a great example. You know when I was asked earlier about the issue of coal. You know, under my plan, of a cap-and-trade system, electricity rates would necessarily skyrocket…”

And then in this clip, in what has become an infamous line, Obama says of his proposed cap-and-trade system, “So if somebody wants to build a coal-powered plant, they can. It’s just that it will bankrupt them because they’re going to be charged a huge sum for all that greenhouse gas that’s being emitted.”

Now to be fair, in the clip I’ve hyperlinked, you can see the full context of that notorious statement, where a few moments earlier Obama says he is open to the idea of coal-fired plants so long as all of the greenhouse gas emissions are captured. Yet given the current technology and cost considerations, to insist on emission-free coal is effectively a ban on new coal-fired plants.

Indeed, Obama’s allies knew that this was the case. Writing in 2013, here is economist Paul Krugman, explaining why direct regulation to prohibit coal is a defensible policy, given the political realities:

As I’ve just suggested, the standard economic argument for emissions pricing comes from the observation that there are many margins on which we should operate.…Nonetheless, the message I took from [a book by William Nordhaus] was that direct action to regulate emissions from electricity generation would be a surprisingly good substitute for carbon pricing—not as good, but not bad.

And this conclusion becomes especially interesting given the current legal and political situation in the United States, where nothing like a carbon-pricing scheme has a chance of getting through Congress at least until or unless Democrats regain control of both houses, whereas the Environmental Protection Agency has asserted its right and duty to regulate power plant emissions, and has already introduced rules that will probably prevent the construction of any new coal-fired plants. Taking on the existing plants is going to be much tougher and more controversial, but looks for the moment like a more feasible path than carbon pricing. [Paul Krugman 2013, bold added.]

And there you have it: Paul Krugman was admitting in 2013 that theoretically, an open-ended government “price” on carbon would be preferable, but that in practice Krugman endorsed the EPA’s top-down planning of the energy sector, including the power plant rules that would “probably prevent the contruction of any new coal-fired plants.” And, far from contenting himself with stopping the construction of new plants, Krugman went on to hope that the federal government could “tak[e] on the existing plants.”

So when the fans of open markets in the energy sector complain of a “war on coal,” they aren’t imagining things. Leading figures, including Barack Obama and Nobel laureate Paul Krugman, publicly declared their opposition to coal-fired power plants.

Myth #2: “The EPA’s power plant rules wouldn’t have hurt coal. It was natural gas prices that would hurt coal.”

If this were true, then it wouldn’t make any sense for critics to complain about President Trump’s removal of the CPP, would it? Once again, some of the loudest environmental activists try to have it both ways. On the one hand, measures like the CPP are essential to ensuring that our grandchildren survive the ravages of climate change, while on the other hand, these regulations apparently have no impact whatsoever on energy sources or prices for consumers. These environmentalists need to make up their minds.

It is certainly true that falling natural gas prices are part of the reason the US has shifted some of its electricity generation away from coal and into gas-fired plants. Even so, the CPP was projected to have a serious long-term impact on coal generation.

As I explained in this previous IER post, we can use the EIA’s 2017 long-term energy outlook to get a sense of the government’s own forecast of the CPP’s impact. The following chart from the EIA shows two scenarios, with and without the CPP in force:

 

In the chart above, the right-hand side shows coal’s generation staying roughly level from 2020 through 2040, in the case with no Clean Power Plan.

Yet on the left side, the “Reference case” with the CPP staying in force, we see electricity generation from coal fall significantly from 2020 to 2040, by almost 500 billion kilowatt-hours per year, or about a third.

To be clear, these EIA forecasts include assumptions about coal, natural gas, and renewables pricing and technological breakthroughs. Even so, the CPP in these forecasts made the difference between coal-generated electricity output holding steady versus falling by a third.

We at IER are not in the business of picking winners and losers in the energy sector. If coal loses market share because of developments in hydraulic fracturing and horizontal drilling, then consumers will benefit from more affordable energy.[1]

However, if coal is hampered by government regulations and/or taxes, then this makes energy more expensive. It does not represent innovation or a boon to consumers.

Myth #3: “The Clean Power Plan was essential to the battle against climate change.”

Earlier I pointed out that many critics of the Trump Administration were being inconsistent: On the one hand, they pooh-poohed the warnings that the CPP was hurting the coal sector. On the other hand, they went ballistic saying that the CPP was essential to stop climate change. Those positions can’t both be true.

However, the mirror-image of these claims can be true. Specifically, even though it’s true that the CPP would reduce US coal-fired power generation significantly, it does not follow that the CPP would significantly impact climate change.

For example, climate scientists Pat Michaels and Chip Knappenberger used a standard computer model to estimate that the Clean Power Plan, if it remained in force, would at most have made the global temperature in the year 2100 a mere 0.019 degrees Celsius lower than it otherwise would have been.

Conclusion

Some of President Trump’s most vociferous critics vacillate between mocking him for doing nothing, and freaking out because he’s doing what he said he’d do. No one can deny that Trump campaigned on ending the “war on coal.” The administration’s action on the so-called Clean Power Plan is consistent with that pledge. Contrary to the myths being floated by pundits and bloggers, there really was a war on coal, the fortunes of coal weren’t just due to natural gas prices, and ending the CPP won’t make a big difference to measured climate change.


[1] Some critics allege that “fracking” involves violations of property rights of local landowners. If this were the case, then the practice would not be beneficial to all consumers. Our statements in the text refer to a situation where all market transactions are voluntary.

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China’s New Environmental Problem: Battery Disposal

In 2016, China became the world’s largest electric vehicle market accounting for over 40 percent of the electric vehicles sold worldwide. China passed the United States which had the highest electric vehicle sales in 2015. In 2016, China had over 1 million electric vehicles, which was an 87 percent increase over the previous year. They added 336,000 new electric car registrations; this included battery only and hybrid models. Electric vehicles range in price from $6,000 to $200,000 (for the most expensive Tesla model).[i] Like several European countries, China is planning to ban the sale of gasoline and diesel vehicles in favor of electric vehicles at an unannounced date.

China’s success in promoting electric vehicles is due to lucrative subsidies—thousands of dollars worth of subsidies—provided to buyers of these vehicles. For example, in Shanghai, a license plate costs about $15,000 if one is lucky enough to win the right to it in the lottery. However, if you choose to buy a plug-in hybrid, Shanghai will provide the license plate without cost.

China has decided to switch from subsidizing buyers to enforcing a quota system on manufacturers. Under the proposed quotas, most local and foreign automakers must earn points equivalent to 10 percent of vehicles they produce in China and import into the country in 2019 and 12 percent in 2020. By 2025, 20 percent of new car sales must be New Energy Vehicles.[ii] The plan applies to carmakers that produce or import 30,000 cars or more annually.[iii] Automakers that fail to meet the target will have to purchase credits from competitors that have a surplus.[iv]

The government has also subsidized charging stations for electric vehicles. As of December 2016, China had 300,000 charging stations. The country has ordered state-owned Chinese power companies to speed up installation of charging stations.

Electric cars make sense in China because of its dense and crowded cities that often mean shorter driving distances. China has an extensive high-speed rail system that reduces the need for long-distance road trips. In 2016, China had the largest electric car stock in the world with about a third of the global total. China is also the global leader in the electrification of other transport modes with over 200 million electric two-wheelers, 3 to 4 million low-speed electric vehicles and over 300 thousand electric buses.[v]

Battery Recycling and Disposal

But despite all the pros for electric vehicles in China, the country has a big problem with battery disposal. Electric car batteries are toxic if not disposed of properly and China does not have an official policy regarding their disposal. The problem will begin to escalate next year, and by 2020 China is expected to have almost 250,000 metric tons (276,000 tons) of batteries that need disposal—nearly 20 times those in 2016.[vi] (See graph below.)

The average lifespan of a lithium-iron phosphate battery, which is the primary type used in China’s electric vehicles, is around five years. Most batteries installed on electric vehicles during the 2012 to 2014 period will be retired around 2018.

Unusable electric vehicle batteries in China

* Forecast

Source: https://qz.com/1088195/chinas-booming-electric-vehicle-market-is-about-to-run-into-a-mountain-of-battery-waste/

Batteries can be recycled, but recycling them is not easy due to the sophisticated chemical procedures involved. If not handled properly, the heavy metal contained in the battery can lead to contamination of the soil and water.

In China, car manufacturers are responsible for recycling their batteries, but many of them expect battery suppliers to handle the recycling. China’s battery recycling industry is relatively small and scattered, and recycling operating costs are high. Even in the European Union, only 5 percent of lithium-ion batteries, another common type of battery power used in electric vehicles, are recycled.

Conclusion

China is now the largest market for electric vehicles and it is growing due to lucrative subsidies and a future quota system. Its dense and crowded cities are conducive to the use of electric vehicles. However, China will soon be confronted with another environmental problem in the disposal and recycling of batteries.


[i] Parallels, China Moves To Increase Number Of Electric Vehicles On Its Roads, April 25, 2017, http://www.npr.org/sections/parallels/2017/04/25/525412342/china-moves-to-increase-number-of-electric-vehicles-on-its-roads

[ii] Seeking Alpha, China To Ban All Petrol And Diesel Cars? Seriously?, September 12, 2017, https://seekingalpha.com/article/4106266-china-ban-petrol-diesel-cars-seriously?auth_param=1cqlaa:1crgicp:88f670313bfce71bb4d0f3f9532dae50&dr=1

[iii] Wall Street Journal, China Sends a Jolt Through Auto Industry With Plans for Electric Future, September 28, 2017, https://www.wsj.com/articles/china-sets-new-deadline-for-electric-car-production-1506608295?mg=prod/accounts-wsj&mg=prod/accounts-wsj

[iv] Independent, China to ban petrol and diesel cars, state media reports, September 10, 2017, http://www.independent.co.uk/news/world/asia/china-petrol-diesel-car-ban-gasoline-production-sales-electric-cabinet-official-state-media-a7938726.html

[v] International Energy Agency, Global EV Outlook 2017, https://www.iea.org/publications/freepublications/publication/GlobalEVOutlook2017.pdf

[vi] Quartz, China’s booming electric vehicle market is about to run into a mountain of battery waste, September 28, 2017, https://qz.com/1088195/chinas-booming-electric-vehicle-market-is-about-to-run-into-a-mountain-of-battery-waste/

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What Do People Think About Climate Change?

A national research project sponsored by the Institute for Energy Research and the American Conservative Union Foundation consisting of ten focus groups and a nationwide survey (1018 registered voters, margin of error 3.1%) discovered that:

There is little enthusiasm for taxing energy. When asked about a tax on carbon dioxide, 44% of respondents opposed, while 39% favored. More importantly, when asked whether they trusted the federal government to spend the money from such a tax wisely just 18% said they did, 74% said they did not.

Even among those who ranked climate change as an important risk (identifying it as a 6 or higher on a scale of 1 to 10), just 42% indicated taxing energy was an appropriate response to climate change.

People of all ideological stripes and all demographic characteristics remain profoundly skeptical of the ability of government to do anything meaningfully and well. Consequently, they’re unwilling to pay for (or really even consider) anything that looks like a government mandate. Government action is considered a last, worst resort, used only when all other ideas have failed.

Carbon dioxide not considered a pollutant. A solid majority – 55% – said that carbon dioxide is needed for plant life and humans both exhale it and consume it every day. Just 31% said it is damaging the environment.

This (and other results) suggests three things:

First, the obsessive nature of the conversation about carbon dioxide escapes most people. In other words, debates around things like the Paris agreement is more noise than signal.

Second, carbon dioxide and climate change have become decoupled in the minds of many voters. This emphasizes one of the significant findings of this project, namely that climate change has become a catch basket into which all environmental problems have been tossed.

Third, this conversation is far from over. Sentiments about climate change remain as poorly formed and unsettled as they when this conversation began three decades ago. In other words, in spite of the time and billions of dollars spent, those who press this issue don’t seem to be any further along than they were when they started.

“This survey confirms what we have known for a long time. Voters think taxes on energy or its proxy carbon dioxide are a bad idea, and they do not trust the government to spend the money from such taxes,” said Thomas Pyle, IER President and ACU Foundation Policy Fellow.

“In the upcoming debate on tax reform, our elected officials should tread carefully when bringing proposals to impose energy or carbon dioxide taxes to the table,” said ACU leader Matt Schlapp.

To view the nationwide survey in the form of a graphic slideshow, click here. To view it in the form of a PDF, click here.

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Ensuring a Resilient Grid Requires Less Government, Not More

On Friday September 29th, the Department of Energy released a Notice of Proposed Rulemaking proposing a rule for action by the Federal Energy Regulatory Commission (FERC). The notice calls on FERC to create new rules for how grid operators value “reliability and resilience” in electricity generation. While the proposed rule is limited in specifics, the essence of the proposal is to guarantee cost recovery for “fuel-secure” power generation units, defined as units with a 90-day fuel supply stored on site. While no specific types of generation units are mentioned, this on-site storage definition would likely apply to coal-fired, nuclear, and hydropower generation facilities.

The Department of Energy has identified a real problem here: the importance to the electricity grid of resilient baseload power generally is not adequately valued. The growth of intermittent sources of electricity like wind and solar creates the most acute need for reliable baseload, but the expansion of natural gas generation is an important consideration as well. Natural gas power plants, while providing stable baseload during most circumstances, normally do not store gas supplies on site. Gas is delivered as needed by pipeline. During emergency circumstances, there is the potential for these pipeline supplies to be disrupted. The intermittency of wind and solar and the potential for disruption to natural gas means that maintaining a substantial percentage of generation capacity that is not subject to interruption is a crucial need to ensure the resiliency of the electricity grid during many types of emergency situations.

However, the proposal from the Department of Energy is an excessive and unnecessarily distortive means of pursuing a more appropriate valuation for secure baseload generation capacity. Like using a sledgehammer to swat a fly, this rule would end up causing enormous destruction even if it also managed to provide more resilient baseload capacity. Guaranteeing cost recovery for certain types of generation would destroy electricity markets. For obvious reasons, investors would immediately favor those investments where the government guarantees their returns. Putting the government’s finger on the scale in this way will increase costs and stifle innovation in new means of generation and delivery. What need is there to innovate and to offer more efficient or cheaper electricity if the government is guaranteeing returns for existing processes?

Secretary of Energy Rick Perry has clarified that he intended this proposed rulemaking as a means of starting a conversation, encouraging FERC to consider these resiliency issues in its decisions. To that extent, we support the underlying intent of the proposed rulemaking, even if its mechanism is unacceptable.

However, Secretary Perry also made a comment that should be disturbing to anyone who values the benefits of freer markets. In seeking to excuse his department’s massive proposed intervention in electricity markets, Secretary Perry stated there is “no free market in the energy industry.” As this applies to electricity markets today, this is of course true. Electricity is a foundational need for modern life and is thus unsurprisingly subject to extensive regulation. And plenty of that regulation is harmful or foolish, such as the extensive promotion of wind and solar through subsidies like the Production Tax Credit and renewable portfolio mandates. Secretary Perry, though, seems to think that all the existing distortions in electricity markets justify the introduction of even more distortions; because some generation sources are currently favored by government policy, that the “solution” is to introduce government favoritism for Secretary Perry’s preferred generation sources. That is precisely the opposite of a free-market solution: we should be seeking to roll back those existing interventions that distort markets, which is exactly what we intend to pursue in the coming debate on tax reform.

It is worth remembering that as an independent agency, FERC is under no obligation to implement this proposed rule. Given FERC’s procedures and its need to build a docket of evidence before any action, the Commission will certainly not be meeting the Department’s rapid timeframe even should it ultimately take action on this proposal. It would be a welcome development for FERC to include resilience and input supply concerns in its decision making process, but this proposed rule from the Department of Energy is not the right way to go about that task.

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IER Response to EPA’s Clean Power Plan Repeal Proposal

WASHINGTON — Institute for Energy Research President Thomas Pyle has issued the following statement regarding EPA’s proposed repeal of its existing source rule, commonly known as the Clean Power Plan, in accordance with President Trump’s energy independence executive order:

“The Clean Power Plan was never about clean power. The nation’s electricity generation fleet is already very clean and getting cleaner—as shown by the nearly 70-percent reduction in criteria pollutants since 1970. The plan was really about instituting more federal control over a dispersed system and driving up the cost of reliable electricity in line with the previous administration’s climate ideology. The result would have been residents in more than 40 states experiencing double-digit percentage increases in their electricity rates by 2030. For that reason, we preferred to call it the Creating Poverty Plan.

“Beyond its implications in terms of dollars and cents, the plan wasn’t cooperative federalism as EPA claimed, but coercive federalism and a misapplication of the Clean Air Act. It extended EPA power in unprecedented ways and marked a clear deviation from the agency’s traditional role. IER commends EPA for its decision to rescind this harmful rule. This is a major victory for American families because it enables all of us to continue reaping the benefits of the affordable energy we need to power our lives and grow the economy.”

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The United States Needs to Maintain Its Existing Electricity Sources

A recent study by analytics firm IHS Markit and co-sponsored by the U.S. Chamber of Commerce shows the importance of our current mix of coal, natural gas, nuclear and renewable energy generating capacity. The report, ‘Ensuring Resilient and Efficient Electricity Generation,[i] found that the current mix of electricity resources is saving our nation $114 billion annually in electricity costs, lowering the cost of electricity by 27 percent. Without significant contributions from nuclear and coal generation, the study found that the price of electricity would increase and the higher prices could lead to the loss of 1 million jobs, the loss of $158 billion to our economy within 3 years and the loss of up to $845 in disposable income for every U.S. household each year.

Study Assumptions and Analysis

The study modeled what the price of electricity would have been between 2014 and 2016 if our nuclear and coal resources were mostly removed from the generating mix. It compared the current mix to a “less efficient diversity” case. That case assumes no meaningful contributions from coal or nuclear resources, a smaller contribution (20 percent less) from hydroelectric resources and a tripling of the current 7 percent contribution from intermittent renewable resources with most of the remaining generation coming from natural gas.

This less efficient diversity case results in little or no reduction in electric sector carbon dioxide emissions because the carbon dioxide emissions profile of the prematurely retiring power supply resources is less than or equal to the emissions profile of the replacement power resources. The report defines a premature retirement to be the shuttering of a power plant with a lower cost to operate than the cost of its replacement.

The following figure shows the differences between the going forward costs of existing coal and nuclear power plants and replacement technologies supplying the non-peaking segments of aggregate consumer demand. The replacement cost is for new natural gas combined cycle plants and for a mix of new wind and solar resources integrated by natural gas combined cycle power plants in proportions reflecting the current pipeline of capacity additions. Clearly, the cost of operating an existing plant on average is less than the cost of a new plant whose initial cost of construction still needs to be paid.

According to the authors, “Analyses of the changes in going-forward costs for both coal and nuclear plants show that these costs increase by less than 1 percent per year over the observed age distribution of existing plants. Therefore, the existing cost gaps between the going-forward costs of existing resources and the replacement costs indicate that the typical existing power plant will likely not be economic to retire and replace for another decade or more.”

 

New England provides an example of increased carbon dioxide emissions due to the premature closure of the Vermont Yankee nuclear power plant. This premature nuclear power plant closure caused carbon dioxide emissions in the Independent System Operator New England to increase by 7 percent from 2014 to 2015. The premature closure of the Pilgrim Nuclear Power Station will likely have a similar impact on regional electricity carbon dioxide emissions. The following figure shows proposed and completed nuclear power plant closures.

 

The current U.S. electric generating supply is made up of a diverse mix of generating technologies and fuel sources as depicted by the current capacity distribution and the generation shares in the graphs below. The current trend in the U.S. generating sector is toward a greater reliance on natural gas–fired generation and intermittent renewable generation (wind and solar) and a decreased role for hydro, oil, nuclear and coal-fired generation.

 

 

Natural gas technologies account for 64 percent of the current electricity capacity addition pipeline, and wind and solar capacity additions account for 29 percent as shown in the figure below. Because the expected utilization rates of the natural gas–fired technologies are more than twice those of the intermittent technologies, the majority of generation in the United States will come from natural gas generating technologies, which will be operating in a net load–following mode to back up and fill in for intermittent wind and solar generation as the generation of hydro, nuclear, coal and oil continues to decrease.

 

The table below compares the outcomes of the existing U.S generating mix and the less efficient diverse case. All costs were calculated on an unsubsidized basis. The impact of the less diverse case results in an average annual increase of $114 billion in the direct cost of electricity to consumers over the 2013 to 2016 period.

 

The higher power prices resulting from the less efficient diversity conditions cause negative economic impacts equivalent to a mild recession relative to the GDP of the baseline. The economic impacts result in a decline in real GDP of 0.8 percent, equal to $158 billion (2016 chain-weighted dollars).

 

Industrial production declines, on average, by about 0.8 percent through year 4, which leads to fewer jobs–a combination of current jobs that are eliminated and future jobs that are never created–within a couple of years relative to the baseline. The largest impact appears in year 2, with 1 million fewer jobs available.

 

Increases in manufacturers’ costs are ultimately passed on to consumers through higher prices for goods and services. The lower purchasing power results in consumers scaling back discretionary purchases. Real disposable income per household is lower by approximately $845 (2016 dollars) three years after the electric price increase.

 

Conclusion

Government interference through subsidies and state renewable mandates distorts electricity markets and result in uneconomical choices in capacity mix causing electricity price increases, premature retirements of existing capacity and a less diverse generating technology mix. An analysis of a less diverse generating case between 2013 and 2016 compared to historical norms results in lower GDP, less employment and lower household income.


[i]HIS Markit, Ensuring Resilient and Efficient Electricity Generation, September 2017, https://www.globalenergyinstitute.org/sites/default/files/Value%20of%20the%20Current%20Diverse%20US%20Power%20Supply%20Portfolio_V3-WB.PDF

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New York’s Clean Energy Standard: Costly and Ineffective

A recent report evaluated New York State’s clean energy programs and found them costing the state’s consumers and businesses over $1 trillion with no measurable impact on world climate.[i] Thus, the carbon dioxide reductions that would cost the state’s residents heavily would have no value. This is nothing new; New York finds numerous ways to tax its people with little benefit to show for it.

New York’s Clean Energy Programs

In 2016, the New York Public Service Commission enacted the Clean Energy Standard (CES), requiring 50 percent of all electricity sold by the state’s utilities to come from renewable generating resources and greenhouse gas emissions (GHG) to be reduced by 40 percent below 1990 levels—both by 2030. The standard also incorporates New York’s previous emissions reduction mandate, requiring that the state’s greenhouse gas emissions be reduced 80 percent below 1990 levels by 2050 (the “80 by 50” mandate).

In 2016, the New York Public Service Commission established the Clean Energy Fund, which requires electric consumers to pay for programs that are designed to reduce energy use in residential, commercial, and industrial buildings by about 25 percent below current levels by 2030. That energy reduction would be about 600 trillion BTUs.

According to a report issued by New York’s Department of Public Service, the 2030 Clean Energy Standard will increase New Yorkers’ electric bills by $3.6 billion. The analysis claims that the Clean Energy Standard will provide about $8 billion in benefits from reducing carbon dioxide emissions, will increase gross state product and will create jobs.

As part of the CES, in January 2017, N.Y.’s Governor Cuomo issued an executive order requiring 2,400 megawatts of offshore wind by 2030. Then, in March 2017, also as part of the CES, he announced the Drive Green program, which will provide a rebate on electric vehicles of up to $2,000, depending on the vehicle. The goal is to have 700,000 electric vehicles, including hybrids on the road by 2025. Cuomo allocated $70 million for the program of which $55 million will cover the subsidies and $15 million will cover advertising, promotional activities and construction of charging stations.

Analysis Findings

Jonathan A. Lesser of Continental Economics, analyzed the feasibility and cost of New York’s Clean Energy programs. Mr. Lesser calculated what the reductions would entail for both 2030 and 2050. These reductions are shown in the figure below. In 2030, New York would only be able to release 141.5 million metric tons of greenhouse gases, of which 123.46 million metric tons are carbon dioxide. In 2050, New York can only release 47.17 million tons of greenhouse gases, of which 41.15 million metric tons is carbon dioxide.

That means in 2030, New York would have to reduce carbon dioxide emissions by 57.52 million metric tons from 2014 levels—50 percent more than the state’s electric generating sector and its imported electricity released in 2014. Thus, other sectors would need to reduce its carbon dioxide emissions in 2030 to reach the target.

In 2050, New York’s carbon dioxide emissions would need to be reduced by about 140 million metric tons from 2014 levels—almost twice what its transportation sector released in 2014. That probably would require massive reductions in all energy-consuming sectors, meaning that New York would need to electrify its energy consuming sectors.

Source: https://www.manhattan-institute.org/sites/default/files/R-JL-0817.pdf

The requirements would result in renewables replacing existing fossil fuel generating technologies, increasing the electrical cost to consumers. According to Mr. Lesser, constructing 2,400 megawatts of offshore wind capacity and 7,300 megawatts of solar photovoltaic capacity by 2030 could result in New Yorkers paying over $18 billion in above-market costs for their electricity. By 2050, the above-market costs could increase to $93 billion. The construction of at least 1,000 miles of new high-voltage transmission facilities to move electricity from upstate wind and solar farms to downstate consumers would also be required.

New York has yet to analyze the feasibility of its 80 by 50 mandate. But, as noted above, it would require the electrification of New York in all or most of its energy-consuming sectors. New York’s transportation sector releases about half of the carbon dioxide emissions needed for the reductions. But, since total electrification of the transportation sector is infeasible with existing technology, the mandate will require reducing residential, commercial, and industrial carbon dioxide emissions and constructing new renewable generating capacity to replace existing generation that must be retired and to meet new electrical demand coming from the other sectors.

According to the Mr. Lesser, the 80 by 50 mandate would require 400 terawatt hours of renewable electricity. That is, the construction of at least 100,000 megawatts of offshore wind, or 150,000 megawatts of onshore wind, or 300,000 megawatts of solar photovoltaic capacity by 2050. That new capacity will need to deal with issues such as fishing rights in the Atlantic off Long Island, “not in my backyard” problems in upstate New York where onshore wind and solar capacity would be located and large land mass requirements.

For example, utility scale solar PV requires about 8 acres per megawatt. Meeting the CES mandate with utility scale solar would require an area of between 2.4 million and 3.0 million acres—between 3,800 and 4,600 square miles. By comparison, Manhattan is 22 square miles. So enough solar PV to meet the CES mandate would require 172 Manhattan islands.

Due to the intermittency of wind and solar power, at least 200,000 megawatts of battery storage would be required as well. To meet the mandate, it would cost New York consumers and businesses over $1 trillion by 2050.

Because New York’s greenhouse gas emission reductions under the Clean Energy Program would be small compared to total worldwide greenhouse gas emissions, the benefits of the reductions would effectively be zero. That is, the temperature changes would be too small to measure and not able to be separated from natural climate variability.

Conclusion

The report found New York’s Clean Energy Standard to be “an exercise in symbolic environmentalism. It will provide almost no measurable benefits, while imposing huge costs, including disproportionate costs on lower-income residents.”


[i] New York’s Clean Energy Programs, August 2017, https://www.manhattan-institute.org/sites/default/files/R-JL-0817.pdf

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