The EPA’s proposed Clean Power Plan (CPP) allows states to build their implementation plan on any combination of policies that the state deems appropriate to meet the carbon emission reductions. Fact sheets released by the EPA list a variety of potential mechanisms that states could use to comply with CPP, including:
- demand-side energy efficiency programs
- renewable energy standards
- efficiency improvements at plants
- co-firing or switching to natural gas
- construction of new Natural Gas Combined-Cycle plants
- transmission efficiency improvements
- energy storage technology
- expanding renewables like wind and solar
- expanding nuclear
- market-based trading programs
- energy conservation programs
Easy enough right? Looking past the daunting task of selecting a combination of strategies that would enable a state to comply with CPP, the question then becomes one of tracking and verifying compliance. This is especially important as states investigate joint implementation plans or market-based compliance strategies.
Simply switching to generation with lower carbon emissions is easy enough to track: if coal generation is ramped down and replaced natural gas generation, carbon emission reductions can be easily calculated. But how do you track the avoided carbon emissions from demand-side management programs, or transmission efficiency improvements, or energy storage?
Measurement and verification is the hidden challenge to CPP compliance. Of course states could simply build a plan and, come 2030, look at their generation mix and hope they have complied, but any implementation plan that hopes to be successful will require robust and generally accepted measurement and verification protocols. This is one of the many industry and policy challenges (and opportunities!) created by the CPP. West Monroe Partners can help with this.