From Sea to Shining Sea: Cap-and-trade Programs Showing Success on Both Coasts

…A new report released this past Wednesday by Acadia Center digs into the most recent data out of the RGGI system. According to the Acadia analysis, the RGGI states have decreased their emissions by 35 percent since the start of the program, while emissions from the 40 states unregulated by a cap only decreased by 12 percent over the same period…

RGGI Provides Both Economic and Environmental Benefits

A new report from Acadia Center highlights the benefits of the Regional Greenhouse Gas Initiative (RGGI), a cap-and-trade program in the New England states, New York, Maryland, and Delaware that started six and a half years ago. The benefits, which stem from emissions reductions and investing revenue the program generates, include declining energy bills, reduced illnesses, and job creation among others.

A cap-and-trade program sets a limit on the amount of CO2 that a region’s electric power generators can release into the atmosphere, with that cap level dropping each year. Companies can purchase permits to release CO2 (called “allowances” in RGGI) through quarterly auctions, and if companies find that they have too many or too few allowances to cover their own CO2 emissions, they can trade with other companies in order to meet their compliance obligations.

RGGI invests 59% of the auction revenue this process creates in energy efficiency programs that reduce consumers’ bills and reduce demand for power. Lower power demand means fewer emissions from power plants, and less money leaving the region to pay for imported fossil fuels.

Independent macroeconomic analysis found that programs supported with revenue raised over RGGI’s first six years of operation would generate over $1.73 billion in energy bill savings. These savings create over $2.76 billion in net economic gains and over 28,500 job-years of employment.

In addition, contrary to projections, electricity prices have declined since RGGI took effect. Comparing average retail electricity prices from 2008 (the year before RGGI’s launch) to 2014 shows that prices have dropped by 2% on average across the region. During the same 2008-2014 period electricity prices in non-RGGI states increased by 13%.

RGGI State Electricity Prices, 2008 and 2014 (Cents/kWh)

RGGI Electricity Prices 2008_2014

 

Most importantly RGGI is achieving its main goal, reducing pollution. CO2 emissions from the 167 power plants covered by RGGI totaled 86,307,909 short tons of CO2 in 2014, which was 5.2% below the 2014 emissions cap of 91,000,000 tons. In addition, when plants are required to pay for CO2 emissions it makes it less economical to operate dirtier plants in comparison to cleaner generating sources. This along with regulations outside RGGI specific to hazardous pollutants helps reduce sulfur dioxide (SO2), nitrogen oxide (NOx), and mercury (Hg) emissions.

Reducing emissions of hazardous pollutants leads to health savings by avoiding illness, hospital visits, lost work days, and premature deaths. In monetary terms, the reduction in hazardous emissions from RGGI’s launch (January 1, 2009) through 2014 translates into nearly $11 billion for SO2 and NOx combined.

Reduction of Hazardous Pollution

Reduction of Hazardous Pollution Graph from RGGI Program Report 073115

These benefits show that RGGI offers a proven, cost-effective pathway to achieve emissions reduction targets. Which is why, with a few adjustments, Acadia Center believes RGGI is a model program for states to adopt in order to meet the Environmental Protection Agency’s (EPA) forthcoming Clean Power Plan (CPP) requirements. When EPA’s final carbon pollution standards are released (which could be as early as next week) we will provide an update on implications for RGGI.

 

 


 

Shattuck_Headshot

Peter Shattuck is the Director of Acadia Center’s Clean Energy Initiative and our Boston office. Peter’s work at Acadia Center focuses on cleaning up the energy supply across all sectors of the economy. Driving market-based emissions reductions is at the core of this work, using cap and trade policies such as the Regional Greenhouse Gas Initiative, which Acadia Center has tracked since the program’s early development in the 2000s and which Acadia Center is now promoting beyond the region.

 

Stutt 14

Jordan Stutt is a Policy Analyst in Acadia Center’s Boston office. He works on energy, transportation and climate change issues, with an emphasis on research and policy analysis for energy systems and carbon markets. He was an Energy Policy Analyst at Pace Energy and Climate Center, Pace University Law School in White Plains, NY, where he focused on energy efficiency and RGGI.

 

The value of solar in Vermont

…A new study from Acadia Center quantifies the grid and societal benefits of solar photovoltaic systems (solar PV) in Vermont. Establishing the value of distributed resources is increasingly important as states explore ways to meet energy needs and deploy clean energy resources…

Report: RGGI model of carbon trading a ‘natural fit’ for Clean Power Plan compliance

The northeast and mid-Atlantic regional approach to reducing greenhouse gas emissions is a “model for compliance” with the federal government’s Clean Power Plan, according to a new report from the Acadia Center. The Regional Greenhouse Gas Initiative is a “natural fit” for the sector, and has helped to push down emissions, reduce electricity prices and boost the region’s economy, the analysis showed…

New Study Shows Value of Solar in Vermont

Acadia Center today released a study that quantifies the grid and societal benefits of solar photovoltaic systems (solar PV) in Vermont. Establishing the value of distributed resources is increasingly important as states explore ways to meet energy needs and deploy clean energy resources. Acadia Center has also released Value of Solar studies for Massachusetts, Connecticut, and Rhode Island and Maine‘s Public Utilities Commission recently completed a similar type of analysis to inform decision making processes in that state.

Acadia Center assessed the grid and societal value of six solar PV systems to better understand the overall value that solar PV provides to the grid. By evaluating an array of configurations, this analysis determines that the value of solar to the grid – and ratepayers connected to the grid – ranges from 19-23 cents/kWh, with additional societal values of 7 cents/kWh.

“Solar generation is a valuable local energy resource that provides significant benefits to ratepayers,” said Ellen Hawes, Senior Analyst, Energy Systems & Carbon Markets. Solar PV provides unique value to the electric grid by reducing energy demand, providing power during peak periods, and avoiding generation and related emissions charges from conventional power plants. The overall grid value of solar is the sum total of these different benefits.

In addition to the value that solar provides to the grid, Acadia Center’s study finds that solar PV provides broader societal benefits, including environmental gains from reduced or avoided greenhouse gas emissions and other pollutants. “Societal benefits should be included when assessing the overall costs and benefits of solar PV and determining additional incentives,” said Leslie Malone, Acadia Center Senior Analyst and an author of the report.

The recently passed renewable energy standard in Vermont carves out an increasing requirement for distributed generation, opening up a larger role for solar PV in the state. In addition, the Public Service Board is in the process of drafting a revised net metering program, potentially changing rate structure. “We hope that adding to the understanding of the value that solar provides to the grid and ratepayers will help inform this proceeding,” said Malone.

For more information and methodology see: http://acadiacenter.staging.wpengine.com/document/value-of-solar-vermont/

 

Contact:

Ellen Hawes, Senior Analyst, Energy Systems and Carbon Markets, Acadia Center, 802-649-1140, ehawes@acadiacenter.org

Leslie Malone, Senior Analyst, Acadia Center, 401-276-0600, lmalone@acadiacenter.org

Emily Avery-Miller, Director External Relations, Acadia Center, 617-742-0054 x001, eavery-miller@acadiacenter.org

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Acadia Center is a non-profit, research and advocacy organization committed to advancing the clean energy future. Acadia Center is at the forefront of efforts to build clean, low-carbon and consumer-friendly economies. Acadia Center provides accurate and reliable information, and offers a real-world and comprehensive approach to problem solving through innovation and collaboration.

Hawaii, Vermont Set Ambitious Examples for Renewables

…Such was the case with Hawaii, which announced its intent to pass a 100 percent renewables mandate shortly after California Gov. Jerry Brown declared that his state should revise its renewables goal from 33 percent by 2020 to 50 percent by 2030, said Peter Shattuck, clean energy director for the Acadia Center, a Boston-based think tank focusing on energy and climate change…

A natural fit? RGGI a model for CPP compliance

…Calling it a “natural fit for compliance,” a new report from the Acadia Center, shows that RGGI continues to drive down emissions while boosting economic growth, subsequently making the program a model that other states can learn from the RGGI experience…

RGGI’s Economic and Environmental Success Lays Blueprint for Benefits under Clean Power Plan

Boston – A new report from Acadia Center shows that the northeast and mid-Atlantic states’ Regional Greenhouse Gas Initiative (RGGI) continues to drive down emissions while boosting economic growth, making the program a model for compliance with EPA’s forthcoming Clean Power Plan. Acadia Center’s report, Regional Greenhouse Gas Initiative: A Model Program for the Power Sector, details emissions trends, investment benefits, and changes in regional electricity generation over RGGI’s six years of operation. The report explains why RGGI is a natural fit for compliance with the Clean Power Plan, what other states can learn from the RGGI experience, and the specific changes that the RGGI states will need to make as part of the 2016 Program Review.

Key findings:

  • Emissions in 2014 fell 5% below the regional cap largely due to increasing generation from renewables and efficiency improvements.
  • Electricity prices have declined by 2% across the region since RGGI’s launch.
  • Since the program’s launch RGGI states have seen 3 times the emissions reductions of other states and 3 percentage points of additional economic growth.

 

According to a recent Analysis Group report, all nine of the participating states’ economies have experienced net gains as a result of RGGI, with the region as a whole seeing $2.76 billion in value added and 28,500 new job years of employment.

“The experience of the RGGI states shows that we can reduce emissions while benefitting consumers and boosting economic growth,” said Daniel L. Sosland, Acadia Center President.

“Thanks to the success of the RGGI program, states around the country have gained confidence in market-based mechanisms to reduce CO2 emissions,” said Peter Shattuck, Director of Acadia Center’s Clean Energy Initiative. “That confidence has translated into numerous multi-state groups discussing RGGI-like trading programs to comply with the Clean Power Plan.”

While the RGGI states are well positioned to meet the requirements of the Clean Power Plan, the upcoming 2016 Program Review offers an opportunity to implement necessary modifications to the strengthen the program. Keeping the states on track for deep emissions reductions and qualifying RGGI for compliance with the EPA rule will require:

  • Extending the RGGI cap to at least 2030 in order to provide additional clarity to the market and match EPA’s timeline for achievement of CPP targets;
  • Correcting the cap reduction trajectory to deliver necessary long term emissions reductions; and,
  • Revising or removing the Cost Containment Reserve to ensure achievement of emissions reduction targets.

 

Once EPA releases the finalized Clean Power Plan, the RGGI states can begin analyzing the targets and modeling the impacts of the program reforms outlined above. “The upcoming Program Review provides an opportunity for the RGGI states to meet EPA’s targets, and continue their role as national leaders on climate,” said Jordan Stutt, Policy Analyst at Acadia Center. “Just as they did in the 2012 Program Review, we expect the RGGI states to prioritize a strengthened RGGI program as part of the 2016 review process.”

For more information see: http://acadiacenter.staging.wpengine.com/document/rggi-a-model-program-for-the-power-sector-2015-update

 

Contact:
Peter Shattuck, Director, Clean Energy Initiative, Acadia Center
(617) 742-0054 x103, pshattuck@acadiacenter.org

Emily Avery-Miller, Director, External Relations, Acadia Center
(617) 742-0054 x100, eavery-miller@acadiacenter.org

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Acadia Center is a non-profit, research and advocacy organization committed to advancing the clean energy future. Acadia Center is at the forefront of efforts to build clean, low-carbon and consumer-friendly economies. Acadia Center provides accurate and reliable information, and offers a real-world and comprehensive approach to problem solving through innovation and collaboration.

NRG community solar project powering 160 residential customers

…“We’re seeing a more democratized energy system where smart energy management — the type of power that consumers buy but also produce — is allowing us to take more control of our energy future,” said Peter Shattuck, Massachusetts Director of Acadia Center, which is dedicated to developing a future based on clean energy economy. “A project like this expands the possibilities for customers who don’t have the right roof or might not own their home to take advantage of solar.”

A Big Fight Over a Natural Gas Pipeline Project Divides Massachusetts

…“The concern for our organization is that we have become over-reliant on natural gas in New England,” said Peter Shattuck, clean energy and initiative director at the Acadia Center, a clean energy group based in Boston. “And the proposed solution in the form of a new, publicly funded gas pipeline would increase that problem”…