Mitigation Working Group: Energy February 21, 2020 2/21 MWG Energy - PowerPoint PPT Presentation

Mitigation Working Group: Energy February 21, 2020

2/21 MWG Energy Meeting Agenda today: 1. Clean and Renewable Energy Standard (CARES) 2. Coal Generation in MD 3. GGRA Modeling Updates

Topic 1: CARES • Achieve 100% Clean Electricity – Draw upon all potential technologies to get there • Find most cost-effective solution – Make technologies compete to get to 100% • Foster home-grown energy • Build upon and improve the RPS

What does CARES do? Before 2030: 1. Build upon CEJA’s Solar and Offshore Wind 2. Eliminate controversial Tier 1 3. Replace that Tier 1 with Maryland clean and renewable energy Through 2040: 4. Count existing nuclear (Calvert Cliffs), but don’t credit it 5. Get to 100% by 2040

1. Building Upon the RPS/CEJA • CARES fully incorporates existing MD solar and offshore wind goals • New MD clean energy category would deploy even more solar CARES 30% CEJA 30% OSW (estimated) OSW (estimated) Solar Solar 25% 25% Goal (% of retail sales) Goal (% of retail sales) 20% 20% 8.4% 8.4% 15% 15% 2.0% 2.0% 10% 10% 1.3% 1.3% 14.5% 14.5% 11.5% 11.5% 5% 5% 7.5% 7.5% 6.0% 6.0% 5.5% 5.5% 0% 0% 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Note: OSW shown as estimated share of sales, but is MW requirement in law. Estimates here reflect already approved 368MW plus 1,200MW of round 2.

2. Eliminate Controversial Tier 1 • Eliminates Municipal Solid Waste and Black Liquor from Tier 1 • These resources have historically been used for ~25% to ~45% of non-carve-out Tier 1 Source: MD PSC most recent (2018) RPS report.

3. Replace MSW & BLQ with MD Clean and Renewable Energy • CARES adds a new clean energy requirement in which new clean resources compete with MD renewables • That requirement supplants non-carve-out Tier 1, approximately at MSW & BLQ shares 60% CARES CEJA 60% 50% 50% 10.0% Goal (% of retail sales) Goal (% of retail sales) 40% 40% 27.1% 5.8% Clean Energy 17.1% 30% Non-Carve-Out Tier 1 30% 2.5% 26.5% OSW (estimated) 20.7% 20% 22.0% 20% Solar 8.4% 22.0%19.5% 8.4% 22.0% 15.2% 2.0% 15.2% 2.0% 10% 10% 1.3% 1.3% 14.5% 14.5% 11.5% 11.5% 5.5% 6.0% 7.5% 5.5% 6.0% 7.5% 0% 0% 20192020 2021202220232024202520262027202820292030 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

3 (cont’d). Maryland Clean and Renewable Energy • Eligible resources for Clean Energy requirement 1. RECs from any Maryland Tier 1 resource (including Solar) 2. Clean Energy Resource Credits (CERCs) from MD: a) New nuclear power b) New efficient Combined Heat and Power (CHP) – Would need to apply new & emerging tech to achieve full credit c) Natural gas or qualifying biomass with Carbon Capture and Utilization or Storage (CCUS) that results in indefinite sequestration of captured CO2 – Qualifying biomass also receives RECs d) Other emerging net-zero technology recognized by the PSC

3 (cont’d). What resources will be deployed for Clean requirement? • RPS and CARES are market mechanisms, so the least- cost resource mix ought to be deployed – (Utilities will purchased cheapest credits available) • CARES requirement accepts any CERCs or MD RECs – MD Solar is likely most plentiful/lowest cost growth opportunity in that category

4. Count existing nuclear, but don’t credit it • Existing nuclear provides ~22% - ~25% of retail sales. • CARES counts that generation toward the goal, and increases the goal accordingly • CARES does not provide credits for that generation 80% 80% CARES CEJA 70% 70% Approx. Calvert Cliffs 25% 60% 60% (uncredited) Goal (% of retail sales) Goal (% of retail sales) 25% Clean Energy 50% 50% 10.0% 25% 40% Non-Carve-Out Tier 1 40% 5.8% 27.1% 25% 17.1% 30% 30% 2.5% OSW (estimated) 26.5% 20.7% 20% 20% 22.0% 8.4% 22.0% 19.5% 8.4% 22.0% Solar 15.2% 15.2% 2.0% 2.0% 10% 10% 1.3% 1.3% 14.5% 14.5% 11.5% 11.5% 5.5% 6.0% 7.5% 5.5% 6.0% 7.5% 0% 0% 20192020 2021202220232024202520262027202820292030 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

5. Get to 100% by 2040 • From 2030 to 2040, CARES increases the new clean energy carve-out (eligibility includes all clean resources and all MD renewables) to reach 100% 100% 90% 80% 70% Approx. Calvert Cliffs (uncredited) 60% 30.0% Clean Energy 50% 10.0% Non-Carve-Out Tier 1 40% OSW (estimated) 22.1% 17.1% 30% 2.5% Solar 20% 8.4% 8.4% 19.5% 10% 1.3% 14.5% 14.5% 7.5% 0% 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040

Technology-Specific Considerations • Hydropower • Existing Nuclear • New Nukes and Carbon Capture • Bioenergy with Carbon Capture (BECCS) • Combined Heat and Power (CHP)

Hydropower • CARES bill incorporates all hydro into Tier 1 • Lots of feedback on that already • Open to improvements to that approach

Existing Nuclear • CARES intends to account for only MD Nuclear • RPS definition of “MD” may include nearby PA resources • MDE & MEA working on clarifying language

New Nukes & Carbon Capture • May or may not be technically or economically feasible – Would compete with other clean energy and MD renewables, so would not be deployed unless competitive • CARES credits CCUS in proportion to share of carbon captured (e.g. capturing 50% of emissions gets 50% credit) • CCUS Crediting requires either permanent storage or utilization that results in indefinite sequestration

Bioenergy with Carbon Capture (BECCS) • Potential negative-emissions technology • Gets double-credit under CARES • Qualifying biomass facilities with CCUS get: – 1 REC for burning qualifying biomass – 1 CERC for capturing the carbon (depends on % captured)

Combined Heat and Power • Partial credit based on efficiency: – >90% efficiency gets full credit (1 CERC per MWh) – 75% to <90% gets ¾ credit (0.75 CERC per MWh) – 60% to <75% gets half credit (0.5 CERC per MWh) – <60% efficiency gets no credit • Recent installations in Maryland averaged 77% efficiency (0.75 CERC per MWh) • Above 90% efficiency extremely difficult to achieve using conventional gas-powered CHP

Topic 1 Discussion

Topic 2: Coal Generation in MD 70 GGRA Draft Plan Estimates Coal generation declines by 60 Rooftop PV ~67% over next decade Utility Solar 50 Offshore Wind • 2014: 17.6 TWh MD Electricity Sources (TWh) Onshore Wind • 2020: 10.1 TWh 40 Hydro • 2030: 3.23 TWh CARES Resource (eg CHP) 30 Imports Decline due to: Municipal Solid Waste • Markets (cheap gas & 20 Oil renewables) Natural Gas 10 Coal • Policies (RGGI, RPS, Nuclear CARES, air regs) 0 2015 2020 2025 2030 Maryland electricity generation and imports in GGRA Draft Plan through 2030. CARES and RGGI reduce fossil generation and increase clean & renewable generation. **Analysis assumes no new nuclear or carbon capture before 2030**

Topic 2 Discussion

Topic 3: GGRA Modeling Updates MDE will update emissions modeling, including: 1. More recent data sources 2. Most recent emissions inventory (2017 instead of 2014) 3. Specific policy details Goal: Update background assumptions to start on updated reference case (results as early as next MWG) (policy case updates wait until outreach complete)

Updating Inventory Year PATHWAYS (& GGRA Draft) built upon the 2014 inventory – We should update to latest inventory, HOWEVER 2017 was low… 120 MD GHG Emissions Accounting for Sequestration 2006 Baseline 100 2014 Emissions 80 25 by 20 (MMTCO2e) 2017 Emissions 60 40 by 30 40 20 0 2005 2010 2015 2020 2025 2030

2014 vs 2017 Weather Emissions are partially weather-driven Heating energy demand 2014 winter (heating degree days at BWI) was rough (polar vortex) 2017 winter was mild (power and building emissions were low)

MDE Proposal Update PATHWAYS to 2017 inventory, except: • Building Emissions: Base on 2018 data (if available) or 2015-2017 average • Electricity Emissions: Base on 2018 or 2019 data – Note that 2019 electricity emissions were similar to 2017.

Other Updates • Updated technology costs: – renewable costs (NREL) – fuel costs (EIA) – and EV costs (TCI modeling) • Population & energy growth (MDP, EIA, others) • Policy specifics: CARES and TCI (policy cases updated after outreach process) • Federal policies

Topic 3 Discussion