The EPA’s Clean Power Plan: Setting the Record Straight on the Benefits and Costs

, Senior energy analyst | May 8, 2015, 10:04 am EDT
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We’re working hard to set the record straight on disinformation about the Clean Power Plan, the first-ever national limits on carbon pollution from existing power plants under the Clean Air Act. It’s not hard to find fodder: there’s plenty of misleading stuff out there, and some of it has gotten way more airtime than it should have. To fight back, colleagues and I gave a webinar recently on the really wrong conclusions some studies have come to on the Clean Power Plan, and how they got it so far off the mark.

My piece of the webinar looked at several misleading studies funded by fossil fuel and utility interests, studies that try hard to obscure the fact that the benefits of the Clean Power Plan (CPP) are likely to far outweigh the costs. I focused on exposing some of their really off-base assumptions about renewable energy and energy efficiency, two proven tools for cutting carbon cost-effectively… a fact naysayers consistently ignore or deny.

Knowledge is power (and power is power)

The Clean Power Plan's flexibility is great... but only if you don't ignore it.

The Clean Power Plan’s flexibility is great… but only if you don’t ignore it. (Source: UCS, “Setting the Record Straight on the EPA’s Clean Power Plan“)

The first thing to be clear on is what we know about the status of renewables and efficiency.

  • Solar has been doing some amazing things lately—costs half what they were just a few short years ago, accelerating installations, larger and larger projects. Solar accounted for almost a third of the new electric generating capacity installed in 2014.
  • Wind power is a champion already, accounting for more than 4% of U.S. electricity supply, and costing less than pretty much any other option for new electricity generation.
  • And energy efficiency has been the one to beat for years, as almost always the cheapest option for meeting new electricity needs.

Ignorance is… bliss? Nope.

Those great stats are why certain studies critiquing the Clean Power Plan are so surprising in how they treat renewables and efficiency, and in how wrong they get it. Here are three, and some of their problems:

  • NERA Economic Consulting – The EPA, in its analysis of the plan, used a number for the cost of energy efficiency that many efficiency experts considered high to begin with (as UCS pointed out in its comments on the draft plan). But NERA assumes costs that are much higher than even those high numbers, based on a single study from several years ago (ably refuted by ACEEE). The result is to transform savings on utility bills projected by the EPA and others into net costs. In the real world, the facts show energy efficiency investments generate net savings.
  • Beacon Hill Institute – BHI says its study “attempts to correct for some of the limitations” contained in the EPA’s own analysis, but those “corrections” turn out to be wrong. They wrongly assume states will meet the CPP only by switching from coal to natural gas, for example—completely and conveniently ignoring the range of cost-effective options that are a key part of the plan. In reality, we know most states already require utilities to ramp up renewable energy and/or energy efficiency over time. Utilities are meeting these requirements at little to no additional costs to consumers, and in many cases delivering savings.
  • U.S. Chamber of Commerce – The Chamber’s study suffered from the same affliction: they assumed that all the states would just use natural gas combined cycle plants with carbon capture and storage—a really expensive way to go about cutting carbon. But their study was actually released before the draft Clean Power Plan, which means they were only guessing what was going to be in it (and guessed wrong).
If you ignore the benefits side of the cost-benefit equation, it's hard to come up with anything but bad news. But when you take a solid look at both sides of the equation, you see a pretty impressive net-positive.

If you ignore the benefits side of the cost-benefit equation, it’s hard to come up with anything but bad news. But when you take a solid look at both sides of the equation, you see a pretty impressive net-positive. (Source: UCS)

The poor treatment of clean energy and the CPP in these studies really isn’t a total surprise, though, given who funded them. NERA’s study, for example, was commissioned by several industry trade groups, including the American Coalition for Clean Coal Electricity and American Fuel and Petrochemical Manufacturers. Together, these organizations represent some of the all-time top producers of industrial carbon emissions, such as Chevron, ExxonMobil, and Peabody Energy.

Remember, these are the same fossil fuel interests who have been trying to deceive us on the facts about global warming for decades.

Weighing real costs and benefits

It’s a good idea, when looking at reports or considering studies, to look under the hood, to understand the assumptions behind the findings, and where the study authors (and funders) are coming from. These anti-CPP studies give some idea of what to look for:

So go ahead, look beyond the headlines. And when you do, you’ll find, in the case of the EPA’s Clean Power Plan, that the news is a whole lot better than what some folks would have you believe.

Let’s set that record straight.

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  • Biologyteacher100

    Yet we have a number of governors suing the EPA to block the plan. In Indiana, we have Governor Pence talking about a “war on coal” when what he proposes is a “war on our grandchildren.” Thanks to the UCS for supporting science based policy on climate.

    • ucsjrogers

      You’re welcome, Bio100. It turns out that even in states whose leaders are making unsupportive noises about the Clean Power Plan, the states and citizens themselves in many cases are moving forward with solutions — investing in renewable energy, implementing energy efficiency, exploring policy frameworks to be able to address the CPP as cost-effectively as possible,…

      Sometimes leaders just need to catch up.

      In the meantime, thanks for being a teacher, for helping our next generation get the grounding they need in science for good decision making — on energy, climate, or a whole host of other issues.

      – John

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  • Here is the only equation that matters: we are adding an excess of carbon dioxide into our atmosphere through the burning of fossil fuels, that is slowly accumulating and warming the planet, and if we want to keep our technological civilization mostly intact, we’re going to need to limit that warming to two degrees Celsius or less. The Earth has already warmed 0.85 degrees Celsius in the last century, and as atmospheric CO2 concentrations haven risen from 280PPM a century ago to over 400PPM now, that heating is accelerating ~ doesn’t leave us with a lot of time or leeway for what we need to do … + +

    • ucsjrogers

      Thanks for weighing in, Avangion. The math on some pieces isn’t encouraging. People should understand, though, that the math on the solutions side *is* encouraging, that we have a lot of tools at our disposal — wind, solar, energy efficiency, and more, just in for the power sector — and that the numbers are getting better all the time. We have options. We just need to make sure we’re getting good information about them, so that we can make smart decisions, and soon. – John