Contents
Background, Methodology, and Scenarios 8
Description of the proposed Clean Power Plan 8
Rulemaking history and status 8
EPA's proposed Best System of Emissions Reduction and state-level CO₂ emission performance goals 9
Methodology 11
The National Energy Modeling System 11
Regional groupings 12
Caveats regarding interpretation of this analysis 15
Scenario descriptions 19
Summary of Results 21
Detailed Results 34
CO₂ emissions and compliance strategy indicators 34
CO₂ emissions 34
Total generation by fuel type 36
Heat rate improvement 39
Retirements and capacity additions 41
Retirements 41
Capacity additions 42
New nuclear 46
Demand reduction through incremental efficiency programs 47
Electricity prices 48
Natural gas 51
Coal 54
Regional coal production 56
Further regional impacts 59
Regional differences in renewable penetration 59
Regional differences in natural gas-fired generation 60
Regional differences in the operation of coal-fired generating units 62
Regional differences in demand reduction 64
Reliability and infrastructure impacts 66
Macroeconomic indicators 69
Additional sensitivity cases 72
Phase-in sensitivity 73
Heat rate improvement sensitivity cases 75
Energy efficiency sensitivity cases 76
Markets for CO₂ for enhanced oil recovery 77
Wide regional cooperation 78
Biomass CO₂ emission rate 78
Limited interregional transmission capacity 79
Appendix A. Request letter 81
Appendix B. Acronyms 84
Appendix C. State carbon intensity targets 86
Appendix D. EMM Region carbon intensity targets 88
Appendix E. Detailed description of NEMS carbon intensity constraint 89
Appendix F. Additional description of methodology for heat rate improvement, re-dispatch, low- and zero-carbon generation, and demand-side efficiency 90
Heat rate improvement 90
Re-dispatch 91
Low- and zero-carbon capacity expansion 91
Demand-side energy efficiency 92
Appendix G 94
Appendix H 100
Appendix I 102
Table 1. NEMS EMM Regions 15
Table 2. Description of EIA baseline cases and Clean Power Plan cases 19
Table 3. Summary results for AEO2015 Reference case and Clean Power Plan cases, selected years 30
Table 4. Summary results for AEO2015 High Oil and Gas Resource, High Economic Growth and CPP cases, selected years 32
Table 5. Power sector CO₂ emissions reduction relative to 2005 levels in Clean Power Plan cases 35
Table 6. Summary of heat rates and capacity performing heat rate improvement in Baseline and Clean Power Plan cases 40
Table 7. Nuclear power projections in three cases (gigawatts) 46
Table 8. Change in average electricity price components in five cases, relative to baseline levels 49
Table 9. Change in regional retail electricity prices in two cases, relative to baseline levels 50
Table 10. Change in electricity expenditures by sector in five cases, relative to baseline levels 51
Table 11. Differences in natural gas production from baseline in the CPP cases 53
Table 12. Growth rates for renewable generation by EMM region and compliance period for two cases, sorted by 2020-29 CPP growth rate 59
Table 13. Growth rates for natural gas generation by EMM region and compliance period for two cases, sorted by 2020-29 CPP growth rate 61
Table 14. Growth rates for coal-fired generation by EMM region and compliance period for two cases, sorted by 2020-29 CPP growth rate 63
Table 15. Cumulative demand-side efficiency reductions to 2030 by EMM region, sorted by ratio to U.S. average 65
Table 16. Regional generation shares by fuel category, baseline and Clean Power Plan cases 68
Table 17. Additional Clean Power Plan sensitivity cases 73
Table 18. Summary of Key Indicators in phase-in case 74
Table 19. Comparison of heat rate improvement (HRI) indicators in three cases. 76
Table 20. Incremental cumulative net present value of selected costs (billion 2013 $) over 2014-40 relative to AEO2015 Reference case 77
Table 21. Total capacity with carbon capture and sequestration in three cases 78
Table 22. Electric power sector resource costs in three cases - cumulative net present value over 2014-40 78
Table 23. Electric power sector biomass capacity and generation projections in three cases 79
Table 24. EPA's proposed Clean Power Plan state carbon intensity targets 86
Table 25. Electricity Market Module regional carbon intensity targets 88
Table 26. End-use rebate level as a percentage of installed cost by energy efficiency program category and Census division as used for input to NEMS 93
Table 27. Summary results for AEO2015 Reference case and Clean Power Plan cases, selected years 94
Table 28. Summary results for AEO2015 High Oil and Gas Resource, High Economic Growth and CPP cases, selected years 100
Table 29. Summary results for Heat Rate sensitivity reference and Clean Power Plan cases, selected years 102
Figure 1. NEMS Electricity Market Module regions 13
Figure 2. United States Census Divisions 14
Figure 3. Change in electric power sector CO₂ emissions in Clean Power Plan (CPP) cases relative to baseline, selected years 21
Figure 4. Change in generation and energy efficiency savings under the Clean Power Plan Base Policy case relative to AEO2015 Reference case 22
Figure 5. Change in generation and energy efficiency savings under the Clean Power Plan Policy Extension case relative to AEO2015 Reference case 22
Figure 6. Nuclear generation in AEO2015 Reference and Clean Power Plan cases, selected years 23
Figure 7. Change in generating capacity retirements by fuel type in Clean Power Plan cases relative to baseline (cumulative, 2014-40) 24
Figure 8. Change in generating capacity additions by fuel type in Clean Power Plan cases relative to baseline (cumulative, 2014-40) 24
Figure 9. Total U.S. coal production in baseline and Clean Power Plan cases, 2005-40 25
Figure 10. Minemouth steam coal prices in baseline and Clean Power Plan cases, 2005-40 26
Figure 11. Natural gas production in baseline and Clean Power Plan cases, 2005-40 27
Figure 12. Henry Hub spot price for natural gas in baseline and Clean Power Plan cases, 2005-40 27
Figure 13. Average percentage change in heat rate of coal-fired generators in Clean Power Plan cases, relative to baseline cases 28
Figure 14. All sectors average retail electricity price in baseline and Clean Power Plan cases, 2005-40 29
Figure 15. Power sector CO₂ emissions in Baseline and Clean Power Plan cases, 2005-40 35
Figure 16. Average capacity factor for coal-fired generating units in Baseline and Clean Power Plan cases, 2005-40 37
Figure 17. Average capacity factor for natural gas combined cycle plants in Baseline and Clean Power Plan cases, 2013-40 38
Figure 18. Change in electricity generation by fuel in Clean Power Plan cases relative to baseline 39
Figure 19. Average heat rate of coal-fired generators in Baseline and Clean Power Plan cases, 2005-40 41
Figure 20. Change in generating capacity retirements by fuel type in Clean Power Plan cases relative to baseline (cumulative, 2014-40) 42
Figure 21. Change in cumulative capacity additions, 2014-40, in Clean Power Plan cases relative to baseline 43
Figure 22. Change in installed wind generating capacity in Clean Power Plan cases relative to baseline 44
Figure 23. Change in installed solar generating capacity in Clean Power Plan cases relative to baseline 45
Figure 24. Change in installed natural gas-fired combined cycle capacity in Clean Power Plan cases relative to baseline 46
Figure 25. Delivered buildings electricity consumption, 2005-40 48
Figure 26. Electric power sector natural gas consumption in baseline and CPP cases, 2005-40 52
Figure 27. Average delivered natural gas prices to the electric power sector in baseline and Clean Power Plan cases, 2005-40 54
Figure 28. Total U.S. coal production in baseline and Clean Power Plan cases, 2005-40 55
Figure 29. Average delivered coal prices to the electric power sector in baseline and Clean Power Plan cases, 2005-40 56
Figure 30. Appalachian coal production in baseline and Clean Power Plan cases, 2005-40 57
Figure 31. Interior coal production in baseline and Clean Power Plan cases, 2005-40 58
Figure 32. Western coal production in baseline and Clean Power Plan cases, 2005-40 58
Figure 33. Difference in renewable generation (Base Policy case vs. AEO2015 Reference case) in top five growth regions, 2015-40 60
Figure 34. Difference in natural gas-fired generation (Base Policy case vs. AEO2015 Reference case) in top five growth regions, 2015-40 62
Figure 35. Difference in coal-fired generation (Base Policy case vs. AEO2015 Reference case) in top five regions of decline, 2015-40 64
Figure 36. Regional EMM demand-side reductions, Base Policy relative to AEO Reference, 2030 sales 65
Figure 37. Wholesale and consumer energy price changes across two Clean Power Plan cases, relative to AEO2015 Reference case 70
Figure 38. Real gross domestic product in AEO2015 Reference and Clean Power Plan cases, 2015-40 70
Figure 39. Real cumulative GDP impacts across two Clean Power Plan cases, relative to AEO2015 Reference case 71
Figure 40. Disposable income changes across two Clean Power Plan cases, relative to AEO2015 Reference case 71
Figure 41. Change in wholesale energy prices and real GDP in Clean Power Plan cases relative to baseline 72