Climate Vision, Power Partners SM , & GHG Activities for Public Power

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

March 2005

Daniel E. KleinTwenty-First Strategies, LLC

McLean, VA 22101

[email protected]

mailto:[email protected]

Page 2 21st Strategies

What we’ll cover today

Background on U.S. GHG efforts

Climate Vision

Power PartnersSM

Company actions

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

ImproveEfficiency

Demand SideSupply Side

RenewablesNuclearFuel Switching

Reduce CarbonIntensity

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 will:

1. Slow the rate of GHG growth

2. Stabilize GHG emissions

3. Reduce absolute emissions

time

emis

sio

ns


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

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

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


Administration Launched Several Initiatives

Multi-sector voluntary programs

Transformational technology RD&D efforts on renewables, clean energy

Expansion of global outreach and partnerships

Support for green trading

Exploration of innovative policy instruments


Advancing R&D via partnershipsPower and petroleum: participating in FutureGen, an

emissions-free coal-fired powerplantPower and petroleum: participating in carbon

sequestration R&D projectsForest & paper industry: working with DOE on

biomass gasification; industry initiating pilot projectsAuto and petroleum: participating in FreedomCAR and

Hydrogen Fuel Initiative Iron & steel: issued R&D solicitation and selected 7

“post-Kyoto” R&D concepts (total value: $2.5 million). AISI member companies will cost share

Chemicals: initiated Vision2020 Innovative Energy Systems Challenge; partnering with DOE


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 Partners

Alliance of Automobile Manufacturers

Aluminum Association

American Chemistry Council

American Forest & Paper Association

American Iron & Steel Institute

American Petroleum Institute

Association of AmericanRailroads

The BusinessRoundtable

International Magnesium Association

National MiningAssociation

Portland CementAssociation

Power Partners

Semiconductor Industry Association

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

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


Elements of Voluntary ProgramsCommitments: Industries make meaningful

commitments toward 18% intensity reduction goal and to report emissions in §1605(b)

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 & received very positive reception

Provides resource 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

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

First year: 2003 relative to 2002 (EIA data) GHG emissions increased 0.7 percent But $GDP grew 3.0 percent So, GHG intensity fell 2.3 percent

Second year: 2004 relative to 2003 (very prel.) GHG emissions increased ~1.4 percent But $GDP grew ~4.4 percent So, GHG intensity fell ~3.0 percent


Power PartnersPower PartnersSMSM: : Meeting the Challenge

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: : 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 intensity

Power sector: Equivalent of 3-5% reduction in emissions intensity (CO2/MWh) by 2012


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 - Update

PowerTree 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

technologies

Other EffortsPilot-Scale Test Centers for Engineering, Economic and

Environmental Evaluation of CO2 Capture and ContainmentCoal Fleet for Tomorrow


Cross-Sector Programs & Outreach

Clean Coal TechnologiesIGCC – AEP, Cinergy, Southern, TECO,

FirstEnergyClean Coal Technologies ConferenceFutureGen

Geologic Carbon Sequestration: Regional PartnershipsCompanies teaming up with federal governmentDetermine most suitable technologies,

infrastructure needs


Cross-Sector Programs & Outreach

Utility Hybrid Truck Initiative

Initiative for New Homes

Publish articles on ways to reduce energy

use, improve energy efficiency

Wise Use Website - help customers reduce

energy use


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

Annual Intensity 1980 - 2025Year by Year Changes in Electric Power CO2 Intensity

0.54

0.56

0.58

0.60

0.62

0.64

0.66

0.68

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014

2016

2018

2020

2022

2024

mm

tCO

2e

/Bk

wh

Actual

Model

Note: 1981 through 2002 data from EGG 2003, 2003 data from Electric Power Annual 2003, 2004 to 2025 data from AEO 2005

Data compiled by EOP Group.


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

Goal: 3-5% reduction in GHG intensity, 2002-2012 First year: 2003 relative to 2002 (EIA data)

CO2 emissions increased ~1.0 percent But generation grew only 0.6 percent So, CO2 intensity increased (worsened) ~0.4 percent

But are EIA’s 2003 estimates off? CO2 emissions increased ~1.8 percent, based on fuel

consumption So if generation grew only 0.6 percent Then GHG intensity increased (worsened) ~1.2 percent

How does 2004 look? (very preliminary) CO2 emissions increased ~1.0 percent, based on fuel

consumption Generation grew ~1.9 percent Then CO2 intensity declined (improved) ~0.9 percent


Types of Actions for Electric Power CompaniesTypes of Actions for Electric Power Companies

Company-specific GHG Reduction Commitments

Renewable Energy & Green Power Programs

Sequestration Efforts

Other Efforts and Programs


Company Actions - UpdateCompany Actions - Update

GHG Reduction CommitmentsAEP

Cinergy

FPL Group

PSEG

TECO

Green Mt. Power

Entergy

Xcel Energy

Austin Energy

SMUD

Seattle City Light



Renewable Energy & Green Power ProgramsSolar

Arizona Public Service, Pugent SoundWind

FPL, Mid-American, Xcel Energy, ExelonBiomass

AEP, Cinergy, SouthernGreen Power/Pricing Programs

PacifiCorpPublic Power and Green Mountain Energy



Sequestration Efforts

APPA TREE POWER Program

Southern Longleaf Legacy Program

Entergy’s Lower Mississippi River Valley Sequestration Project

PacifiCorp

AEP’s Geologic Sequestration Initiative with DOE


Company Actions - Update

Other Efforts & Programs

Energy efficiency programs

SF6 Programs

Chicago Climate Exchange


Upcoming Activities

Release of Revised §1605(b) Reporting

GuidelinesMay have impact on voluntary efforts

Complete Power PartnersPower PartnersSM Resource Guide Resource GuideHelp companies identify actions to reduce emissions

Continue and Expand GHG Reduction EffortsContinue and Expand GHG Reduction Efforts


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 “Early 2005”: (1) further revision of the General Guidelines and

(2) proposed Technical 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?


Complete the Power PartnersPower PartnersSM Resource Guide Resource Guide

http://carbonsequestration.us/PPRG/http://carbonsequestration.us/PPRG/


Continue and Expand Power CompanyGHG Reduction Efforts

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

Costs Effectiveness Ancillary impacts

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

Develop capabilities for GHG reporting


Questions?

Dan Klein

Twenty-First Strategies, LLC

6595 Terri Knoll Ct.

McLean, VA 22101

703-893-8333

[email protected]

Documents

Climate Vision, Power Partners SM , & GHG Activities for Public Power