American Public Power Association Pre-Rally Workshop February 28, 2006 Washington, D.C

American Public Power Association

Pre-Rally WorkshopFebruary 28, 2006Washington, D.C.

Climate Change:Making Community-Based Decisions in a Carbon Constrained World

Climate Vision, Power PartnersSM,& GHG Activities for Public Power

presented toAmerican Public Power Association

Climate Change SeminarFebruary 28, 2006

Daniel E. KleinTwenty-First Strategies, LLCMcLean, VA 22101 [email protected]

mailto:[email protected]

Page 3 21st Strategies

What we’ll cover today

Background on U.S. GHG programs

Climate Vision

Power PartnersSM & industry activities

GHG accounting & upcoming activities

What’s a Power PartnerSM to do?


Technological Carbon Management Options

All options needed to: Maintain economic growth Affordably meet energy demand Address environmental objectives

Improve EnergyEfficiency

Demand SideSupply Side

RenewablesNuclearFuel Switching

Reduce FuelCarbon Intensity

Carbon emissions = $GDP X Btu/$GDP X carbon/Btu – sequestration

SequesterCarbon

Capture & StoreEnhance Natural

Sinks


Improving GHG intensity is a key component of the U.S. strategy

Over time, improving GHG intensity could:

1. Slow the rate of GHG growth

2. Stabilize GHG emissions

3. Reduce absolute emissions

… depending on the rate of improvement time

emis

sion

s


Addressing Climate and Energy Securityin the Global Climate Change Initiative

On February 14, 2002, President Bush set a goal to reduce U.S. GHG emissions intensity by 2012

GHG “intensity” will be measured in terms of GHG per unit of GDP

This goal is equivalent to ~500 million metric tons of cumulative carbon equivalent reductions from 2002-2012

“My administration is committed to cuttingour nation’s greenhouse gas intensity... by 18 percent over the next 10 years.”


GCCI Launched Several Initiatives

Multi-sector voluntary programsTransformational technology RD&D

efforts on renewables, clean energyExpansion of global outreach and

partnershipsSupport for green tradingExploration of innovative policy

instruments


Climate VISION Program Launch

Climate VISION – Voluntary Innovative Sector Initiatives: Opportunities Now

A part of GCCI, launched February 12, 2003

Part of a continuum of short- mid-, and long-term approaches to address climate change

Nature of problem requires development and use of transformational technologies


Climate VISION Private-Sector PartnersAlliance of Automobile Mfgrs.

Aluminum Association

American Chemistry Council

American Forest & Paper Association

American Iron & Steel Institute

American Petroleum Institute

Assoc. of American Railroads

The Business Roundtable

Industrial Minerals Assoc. – N. America

International Magnesium Association

National Lime AssociationNational Mining

AssociationPortland Cement

AssociationPower Partners

Semiconductor Industry Association

Each partner has committed to contribute to President’s GHG intensity goal.

http://www.sia-online.org/home.cfm


Elements of Voluntary Programs

Commitments Industries make meaningful commitments toward 18% intensity reduction goal and to report emissions and intensities

Inventory Partners develop and use tools to calculate, inventory, and report GHG emission reductions, avoidance, & sequestration

Solutions Partners (industry, government) identify cost-effective GHG reductions for implementation

Technology Companies develop strategies to speed R&D and commercial adoption of advanced technologies

Recognition Government recognizes voluntary mitigation actions

Further reductions

Partners develop strategies across the economy to further reduce GHG emissions


Climate VISION Website

Announced during COP-9 in December 2003

Provides resources for partners and an avenue to communicate with public on progress

Averaging 10,000+ “hits” per month

www.climatevision.gov


So … how is the U.S. doing so far? Goal: 18% reduction in GHG intensity, 2002-12

But BAU forecasts show ~14% improvement (~1.3%/year) 18% implies average annual rate of ~1.7%/year From 1990-2003, GHG intensity fell ~1.9%/year

First year: 2003 relative to 2002 (EIA data) GHG emissions increased 1.0 percent But $GDP grew 2.7 percent So, GHG intensity fell 1.7 percent

Second year: 2004 relative to 2003 (prel.) GHG emissions increased ~2.0 percent But $GDP grew ~4.2 percent So, GHG intensity fell ~2.1 percent

2005 shows GDP up ~3.5%; CO2 maybe flat


Power PartnersPower PartnersSMSM: : Meeting the Challenge

In 2002, electric power sector created Power PartnersSM Voluntary partnership with Federal government Address the President’s voluntary climate initiative Designed to deliver results in short, medium and

long term

Participating in Climate VISION & Climate Leaders Industries/companies commit to reduce GHG

intensityPower sector: Equivalent of 3-5% reduction in

emissions intensity (CO2/MWh) by 2012


Power PartnersPower PartnersSMSM: : Historical Roots

U.S. electric power sector recognized early on as a world leader in voluntary approaches for reducing, avoiding or sequestering GHG emissions

Power industry came together in the 1990sSuccessfully undertook voluntary climate initiatives

through the Climate Challenge programFirst major industry to do so281 MMT CO2 of reported reductions in 2002.

But … does this reputation for “early action” still hold?


Power PartnersPower PartnersSMSM Participants

American Public Power Association (APPA) Edison Electric Institute (EEI) Electric Power Supply Association (EPSA) Large Public Power Council (LPPC) National Rural Electric Cooperative

Association (NRECA) Nuclear Energy Institute (NEI) Tennessee Valley Authority (TVA)


Power Sector Goal

Achieve equivalent of 3-5% reduction in GHG intensity by 2012 through credible, verifiable reductions in GHG emissions or offsetsCollaborative, industry-wide initiativesIndividual actions that best suit company capabilities,

resources and business strategiesCross-sector programs and outreach

Signed Umbrella MOU with DOEDecember 13, 2004Highlights roles of partners in achieving voluntary

reductions


Power Industry Initiatives - UpdatePower Industry Initiatives - UpdatePowerTree Carbon Co. – New reforestation

effortSponsored by 25 U.S. power generatorsCommitted over $3 million for up to six projects – will

remove and store over 1.5 million tons of CO2

Program formally announced last year

C2P2 – Coal Combustion Products PartnershipIncrease CCP use from approx. 14 million tons to 20

million tons of CO2 annually by 2010Increase utilization rate from current 32% to 45% by

200840+ utilities have become C2P2 “Champions”


Power Industry Initiatives - UpdatePower Industry Initiatives - Update

IPP – International Power Partnerships programWork with DOE and State Dept. to identify GHG reduction

opportunities overseas Promote use of renewable energy and clean coal

technologiesOther Efforts

Pilot-Scale Test Centers for Engineering, Economic and Environmental Evaluation of CO2 Capture and Containment

Coal Fleet for Tomorrow


Cross-Sector Programs & OutreachClean Coal Technologies

IGCC – AEP, Cinergy, Southern, TECO, FirstEnergyClean Coal Technologies ConferenceFutureGen

Regional Carbon Sequestration PartnershipsCompanies teaming up with federal governmentEvaluate technologies & infrastructure needs

Utility Hybrid Truck Initiative Initiative for New HomesWise Use Website - help customers reduce

energy use


So … how’s the Electric Power Sector doing so far?

Goal: 3-5% reduction in GHG intensity, 2002-12 First year: 2003 relative to 2002 (EIA data)

CO2 emissions increased ~1.25 percent But generation grew only 0.6 percent So, CO2 intensity increased (worsened) ~0.6 percent

2004 looks a little better? (prel. EIA) CO2 emissions increased ~0.87 percent Generation grew ~1.95 percent Then CO2 intensity declined (improved) ~1.0 percent

How does 2005 look? (very preliminary) CO2 emissions increased ~2.8 percent Generation to grew ~1.7 percent Then CO2 intensity increased (worsened) ~1 percent or more


Business-as-Usual predicts some improvementGeneration Intensity (mmtCO2e/bkwh)

0.5400

0.5520

0.5640

0.5760

0.5880

0.6000

0.6120

0.6240

0.6360

0.6480

0.6600

0.6720

0.6840

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014

2016

2018

2020

2022

2024

2026

2028

2030

mm

tCO

2e/b

kwh

ModelActual

Updated Model Forecast Data from AEO 2006Historical Data from AER 2004

AEO 2005

AEO 2006

Data compiled by EOP Group.

EPICI target


Recent & Upcoming Activities forElectric Power Companies

Increasing State and local pressuresRelease of Revised §1605(b) Reporting

Guidelines (now expected March 2006)May have impact on voluntary efforts

Expand Power PartnersPower PartnersSM Resource Guide Resource GuideHelp companies identify actions to reduce emissionsOn-line format for utilities and public use

Continue and expand GHG reduction effortsContinue and expand GHG reduction efforts


States are getting more involved in ClimateGHG Reporting and Registries Powerplant Carbon Caps of Offsets

Source: Pew Center for Global Climate Change, July 2005 update

Greenhouse Gas InventoriesClimate Action Plans Completed


U.S. Mayor’s Climate Protection Agreement

Initiated shortly after Kyoto Protocol took effect

Actions urged: Cities should meet or exceed Kyoto targets State & federal governments should meet or beat Kyoto

targets by 2012 Congress should enact cap & trade legislation

Effort has growth rapidly 202 Mayors have signed (as of Feb. 2, 2006) Representing over 41 million citizens Press attention worldwide


Rapid Growth in U.S. Mayor’s C.P.A.16-Feb-2005: Kyoto

Protocol takes effect30-Mar-2005: 10

Mayors launch program

13-Jun-2005: U.S. Conf. of Mayors unanimously endorse

8-Dec-2005: Mayor Nickels (Seattle) highlighted at Montreal COP

2-Feb-2006: 202 Mayors signed, representing over 41 million citizens


Background on Revising the §1605(b)GHG Reporting Guidelines

Voluntary Reporting of Greenhouse Gases Program Established by Section 1605(b) of the Energy Policy Act of

1992 Oct. 1994: Final Guidelines issued First reporting year was 1994, reported by DOE in July 1996

Reporting rules were quite flexible Scope of the reporting entity Emissions and/or reductions Entity-wide or project-specific

Power sector initially dominated, still majority


Background on Revising the §1605(b)GHG Reporting Guidelines

Concerns grew with the original program “Flexibility” reduced credibility Weak basis for future crediting Emergence of competing reporting standards

Administration plan to “substantially improve the emission reduction registry” Part of Feb. 2002 GCCI “create world-class standards for measuring and

registering emission reductions” “transferable credits to companies that can show real

emission reductions” take into account emerging domestic and int’l approaches


Release of Revised §1605(b)GHG Reporting Guidelines

Status of §1605(b) revisions Feb. 2002: GCCI to “Substantially Improve the Emission

Reduction Registry” November 26, 2003, DOE released proposed revised

General Guidelines Jan. 2004: DOE Public Workshop on General Guidelines March 2005”: (1) revised Interim Final General Guidelines

and (2) Draft Technical Guidelines proposed April-May 2005: more DOE Public Workshops Current status (as of Dec. 2005):

DOE had expected final guidelines by end of 2005 Now aiming for “March 2006” Then a round on revised reporting forms Full implementation in 2007 for 2006 reporting


Release of Revised §1605(b)GHG Reporting Guidelines

Will §1605(b) help or hinder its purposes? Feb. 2002: “These improvements will enhance

measurement accuracy, reliability and verifiability, working with and taking into account emerging domestic and international approaches.”

But is the WRI/WBCSD GHG Protocol becoming the new standard?

Will §1605(b) be a uniter or a divider?


Enhance the Power PartnersPower PartnersSM Resource Guide Resource Guide

Old Climate Challenge program developed an “Options Workbook” of “best practices”

MOU commits to developing and maintaining a “Power PartnersSM Resource Guide”

At a minimum … Meet Climate Vision commitment Information for utilities, esp. smaller ones Information for general public

… and maybe also … Data collection for measuring intensity? Aid in annual Power PartnersSM report to DOE? Other purposes?


Why Have a Website for the Resource Guide? Limitations with “One Big Document”

Bulk discourages quick and easy use Limited tie-ins with the Internet Difficult and costly to update … likely dead-end project

Possible advantages of being web-based Easy to access and navigate A “gateway” to broader Internet resources Updating via collaboration Ties into other Power PartnersSM activities Quicker and less costly to maintain … more likely to be a “living document”


Scope of Resource Guide Website Overall Power PartnersSM enabled

Expansion for additional content and uses for public and/or EPICI members only

PPRG is a Homepage link

Resource Guide is current focus of website Nearly 50 topics Text and references for each topic Ample opportunities for users to add content


http://uspowerpartners.org/


Power Companies should continue and expand their GHG reduction efforts

Understand your GHG footprint and risks Identify GHG reductions already under way Assess options for further GHG reductions

Costs Effectiveness Ancillary impacts

Develop capabilities for GHG reporting Join climate programs?

National? State & local?

Set a GHG target? Absolute level of emissions? GHG emissions intensity?


Closing Thought #1

Every challenge containsopportunity as well as danger.

= +

CRISIS = DANGER + OPPORTUNITY


Closing Thought #2

Come gather ’round peopleWherever you roamAnd admit that the watersAround you have grownAnd accept it that soonYou’ll be drenched to the bone.If your time to youIs worth savin’Then you better start swimmin’Or you’ll sink like a stoneFor the times they are a-changin’.

Bob Dylan, 1963

In a future filled with uncertainty, there’s value in being proactive.


Closing Thought #3

“If you’re not at the table,you’re on the menu.”

-- Washington D.C. proverb


Questions?

Dan KleinTwenty-First Strategies, LLC6595 Terri Knoll Ct.McLean, VA 22101

[email protected]

mailto:[email protected]

American Public Power Association

Pre-Rally WorkshopFebruary 28, 2006Washington, D.C.

Climate Change:Making Community-Based Decisions in a Carbon Constrained World

Documents

American Public Power Association Pre-Rally Workshop February 28, 2006 Washington, D.C