Options for Efficiency to Reduce CO2 from Existing Power Plants
Existing power plant carbon performance standards being developed under the Clean Air Act could include supporting or crediting energy efficiency projects which reduce CO2 emissions by reducing electricity use in buildings. Payments for CO2 reductions or incentives and rebates, on top of energy cost savings, could shorten payback on efficiency projects, including energy service performance contracts or deeper building retrofits.
The U.S. Supreme Court ruled in 2009 that CO2 qualifies as an air pollutant subject to regulation under the Clean Air Act, and in June 2013 President Obama directed the U.S. EPA to develop carbon pollution standards for power plants - the source of one-third the nation’s greenhouse gases.
In June 2014, EPA will propose carbon dioxide (CO2) performance standards for existing electricity generating units under section 111(d) of the Clean Air Act. After finalization, state governments then develop implementation plans to meet the standards. Those standards, beyond requiring utilities to take actions at the power plants themselves, may allow states to credit projects and technologies outside the power plant “fence line” that reduces power sector emissions such as improving energy efficiency in buildings.
Harvard Law School recently published a report on the role of Efficiency in the Clean Air Act Section 111(d). Entitled, “Efficiency Rules” the report provides useful background and details how the EPA must identify approaches that demonstrate that any action is:
Recent guidance from U.S. EPA’s “Roadmap for Incorporating Energy Efficiency/Renewable Energy Policies and Programs into State and Tribal Implementation Plans (2012 Roadmap)” provides some preview of how EPA may view action on these four criteria.
Six energy efficiency providers (including Johnson Controls) recently released a policy paper with six recommendations for the U.S. EPA – urging EPA to recognize the role of efficiency from utility, state and private sector activities:
End-use energy efficiency should be an available means of compliance with the section 111(d) requirements.
The Guideline Document should provide guidance to States on presumptively approvable EE provisions in State compliance plans.
Existing State and utility programs should be recognized and scaled up.
Mechanisms for crediting private-sector-delivered energy efficiency activities, in addition to State and utility activities should be available.
EE can and should be credited in both rate- and mass-based compliance systems.
Criteria for approving EE elements of State plans should prioritize environmental rigor, administrative ease, and adaptability.
By 2015, states are to submit their state plans to the U.S. EPA for approval. Early guidance by EPA on how to credit, verify and capture energy efficiency as a part of a system of emissions reductions can help scale up U.S. building efficiency efforts.
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Industry Framework: Making End-Use Energy Efficiency a Credited Compliance Tool under SEC. 111(D) >>
 U.S. Environmental Protection Agency
 The companies included are: Ingersoll Rand, Johnson Controls, Honeywell, Schneider Electric, Siemens and United Technologies.