Presented By:Arthur Marin, Executive Director

NESCAUM

Presented To:New Jersey Clean Air Council

Annual Public HearingTrenton, NJ

April 14, 2010

Planning for Transformational Change in an Incremental World

2

Planning Challenges for Coming Decade

• Our region & nation have achieved great success in dramatically reducing the threat from airborne emissions of lead, CO, ozone & acid rain

• These successes are tempered by the growing understanding of environmental & public health threats posed by microscopic particles & greenhouse gasses

• Now face challenge of virtually eliminating common air pollutants associated with combustion in order to meet our goals

3

Planning Challenges for Coming Decade

• Transitioning from incremental SIP approach to more holistic, longer-term planning

• Meeting multiple goals & planning horizons• Achieving near-term requirements while

pushing transformational changes • Avoiding short-term decisions that

inconsistent with longer-term needs• Addressing complex air pollution issues within

a framework that includes broad social and economic considerations

4

Scale and Scopeof Air Quality Issues

• Neighborhoods – environmental justice• Intra-regional – Ozone Transport Region• Inter-regional – OTAG, Section 126 petitions• Continental scale – IJC, US-Canada Accords• Intercontinental – PM & ozone• Global – mercury & GHGs

5

The “Drivers” Traditional Air Quality Issues

• Fine particulate matter & ozone– no known threshold for health impacts– EPA required to reassess NAAQS every 5 years

• Mercury– Northeast states already committed to virtual elimination

• Toxics– Benzene and other ubiquitous toxins

• Regional haze / visibility impairment– Congress requires states to develop plans to restore

“pristine” air quality to parks & wilderness areas over long run

6

The “Drivers” Climate Change Mitigation

• Achieving science-based targets (80%) by mid-century

• Will need to fundamentally change the way we produce & use energy, plan our built environment, and live our lives

7

Effective Planning for Complex Problems

• We need to dramatically change the way we conduct air quality planning

• “Stove pipe” approaches will no longer work• NESCAUM has designed an approach to

multi-pollutant planning to help states think more holistically

• Conducted with integrated modeling framework that quantifies environmental, economic & public health impacts

8

Benefits of Multi-Pollutant PlanningMulti-Pollutant Planning

• Addresses multiple pollutants, including SO2, NOX, CO2, and Hg

• Highlights tradeoffs and co-benefits of policy options

• Analyzes the environmental, public health, economic, & energy implications of various pollution control strategies

• Allows for multi-sector analyses

9

Multi-Pollutant Planning Makes SenseMulti-Pollutant Planning Makes Sense

• Strategies & technologies that reduce GHGs can also reduce traditional pollutants

• Can help design cost-effective approaches that minimize burden on industry & maximize the use of state resources

• Can result in better environmental results at lower cost

• Promotes integrated energy & air quality planning

10

Proof of Concept for Multi-Pollutant Policy Analysis Framework

• Have developed NE-MARKAL that covers region from DC to Maine

• MARKAL is a least-cost optimization linear programming model that focuses on energy systems & technologies

• Linked it to atmospheric dispersion, macro-economic, & public health assessment models

• Following results are preliminary & intended only to demonstrate capabilities

11

NESCAUM’s Multi-Pollutant Policy Analysis Framework

NE-MARKAL Energy Model

Evolution of Energy System

12-State REMIEconomic Model

KeyEconomic Indicators

CMAQAir Quality Model

emiss

ions

expenditures

Wet/DryDeposition

Ambient Concentrations

BenMAPHealth Benefits Assessment

Health EffectsIncidence and Cost/Benefit

Goals & Policies

12

NE-MARKAL: Energy & Technology Model

Source: EPA ORD

Uranium

Fossil Fuels

OilRefining & Processing

H2 Generation

Clean Energy

Biomass

Combustion

Nuclear Power

Gasification

RenewableResources

Carbon Sequestration

Industry

Industry

Commercial

Residential

Automobiles

Evolution of Today’s Energy System

13

Reference Case – Power Sector

by Fuel Typeby Fuel Type by Fuel Typeby Fuel Type

Annual Average Growth Rate Annual Average Growth Rate between 2007 and 2030between 2007 and 2030

Annual Average Growth Rate Annual Average Growth Rate between 2007 and 2030between 2007 and 2030

Power Sector Generation MixPower Sector Generation Mix Power Sector Capacity MixPower Sector Capacity Mix

0

100

200

300

400

500

600

700

2002 2005 2008 2011 2014 2017 2020 2023 2026 2029

tBT

U

% Change 2008-2029 Ann. Av. Growth RateCoal 0.0% 0.0%Gas 50.5% 2.0%Hydro 5.8% 0.3%Nuclear 3.4% 0.2%Oil 0.0% 0.0%Renewable -3.1% -0.1%

0

10

20

30

40

50

60

2002 2005 2008 2011 2014 2017 2020 2023 2026 2029

GW

% Change 2008-2029 Ann. Avg Growth RateCoal 0.1% 0.0%Gas 34.4% 1.4%Hydro 3.9% 0.2%Nuclear 0.0% 0.0%Oil 0.0% 0.0%Renewable 0.7% 0.0%

Coal Gas Hydro Nuclear Oil Renewable

14

0

50

100

150

200

250

300

2002 2005 2008 2011 2014 2017 2020 2023 2026 2029

MV

MT

0

200

400

600

800

1,000

1,200

1,400

2002 2005 2008 2011 2014 2017 2020 2023 2026 2029

tBT

U

14

Policy Scenario: 60% of LDV fleet to electric vehicle by 2029

by Fuel Typeby Fuel Type by Vehicle Categoryby Vehicle Category

Time Integrated Change Time Integrated Change between 2007 and 2030between 2007 and 2030

Time Integrated Change Time Integrated Change between 2007 and 2030between 2007 and 2030

Transportation Energy ConsumptionTransportation Energy Consumption LDV Technology DeploymentLDV Technology Deployment

-2500

-2000

-1500

-1000

-500

0

500

1000

1500

2000

2500

CN

G

Die

se

l

Ele

ctric

ity

Eth

an

ol

Ga

so

line

Hy

dro

ge

n

tBT

U

-400

-300

-200

-100

0

100

200

300

400

CN

G V

EH

ICL

ES

CO

NV

EN

TIO

NA

LD

IES

EL

CO

NV

EN

TIO

NA

LG

AS

E8

5 E

TH

AN

OL

EL

EC

TR

ICV

EH

ICL

E

GA

S H

YB

RID

HY

DR

OG

EN

FU

EL

CE

LL

MV

MT

1515

Policy Scenario: 60% of LDV fleet to electric vehicle by 2029LDV Transportation Sector Cost BreakoutLDV Transportation Sector Cost Breakout

LDV Transportation Sector Emissions ChangesLDV Transportation Sector Emissions Changes

Cost Changes relative to reference

(2008 $US)

Change in capital costs

Change in fixed costs

Change in fuel costs

Annual

(2029)

+$18B

(+35%)

-$1.8 B

(-22%)

-$10 B

(-52%)

Cumulative

(2007-2030)

+$120 B

(+13%)

-$15 B

(-8.7%)

-$90 B

(-20%)

Emission Changes relative to reference

CO2

(Million Tons)

NOx

(Thousand tons)

SO2

(Tons)

CO

(Thousand tons)

VOC

(Thousand tons)

CH4

(Thousand tons)

Annual

(2029)

-42

(-43%)

-110

(-40%)

-850

(-22%)

-1,500

(-65%)

-80

(-61%)

-4.2

(-73%)

Cumulative

(2007-2030)

-320

(-14%)

-840

(-14%)

-6,900

(-6.5%)

-11,700

(-22%)

-600

(-19%)

-28

(-20%)

16

0

100

200

300

400

500

600

700

800

2002 2005 2008 2011 2014 2017 2020 2023 2026 2029

tBtu

0

100

200

300

400

500

600

700

800

2002 2005 2008 2011 2014 2017 2020 2023 2026 2029

tBtu

16

Electricity Generation by Fuel Type

Reference CaseReference Case EVEV

Policy Scenario: 60% of LDV fleet to electric vehicle by 2029

Cost Changes relative to reference (2008 $US)

Change in capital costs

Change in fixed costs

Change in fuel costs

Annual

(2029)

+$174 M

(+29%)

+$108 M

(+6%)

+1.9 B

(+23%)

Cumulative

(2007-2030)

+$2 B

(+20%)

+$1.2 B

(+3%)

+$19 B

(+12%)

Emission Changes relative to reference

CO2

(Million Tons)

NOx

(Thousand Tons)

SO2

(Thousand Tons)

Hg

(lbs)

Annual

(2029)

+16

(+25%)

+4

(+12%)

+2

(+2%)

+86

(+2%)

Cumulative

(2007-2030)

+170

(+12%)

+51

(+5%)

+60

(+2%)

+800

(+2%)

Coal Gas Hydro Nuclear Oil Renewable

17

0

10

20

30

40

50

60

2002 2005 2008 2011 2014 2017 2020 2023 2026 2029

GW

0

100

200

300

400

500

600

700

2002 2005 2008 2011 2014 2017 2020 2023 2026 2029

tBT

U

Policy Scenario: State Renewable Portfolio Standard

by Fuel Typeby Fuel Type by Fuel Typeby Fuel Type

Power Sector Generation MixPower Sector Generation Mix Power Sector Capacity MixPower Sector Capacity Mix

Annual Average Growth Rate Annual Average Growth Rate between 2007 and 2030between 2007 and 2030

Annual Average Growth Rate Annual Average Growth Rate between 2007 and 2030between 2007 and 2030

Coal Gas Hydro Nuclear Oil Renewable

Reference Case CCoal 0.0% 0.0%Gas 1.4% 1.0%Hydro 0.2% 0.3%Nuclear 0.0% 0.0%Oil 0.0% 0.0%Renewable 0.0% 5.8%

Reference Case CCoal 0.0% 0.0%Gas 2.0% 0.6%Hydro 0.3% 0.5%Nuclear 0.2% 0.2%Oil 0.0% 0.0%Renewable -0.1% 5.2%

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Policy Scenario: State Renewable Portfolio Standard

Net Generation Change 2007-2030 Relative to ReferenceNet Generation Change 2007-2030 Relative to Reference

Net Capacity Change 2007-2030 Relative to ReferenceNet Capacity Change 2007-2030 Relative to Reference

Power Sector Cost BreakoutPower Sector Cost Breakout

Power Sector Emissions ChangesPower Sector Emissions Changes

Cost Changes relative to reference (2008 $US)

Change in capital costs

Change in fixed & variable costs

Change in fuel costs

Annual

(2029)

+$1.0 B

(1.3 times REF)

+$89 M

(+4.5%)

-$1.2 B

(-25%)

Cumulative

(2008-2029)

+$19 B

(1.4 times REF)

+$1.8 B

(+3.9%)

-$17.4 B

(-18%)

Emission Changes relative to reference

CO2

(Million Tons)

NOx

(Thousand Tons)

SO2

(Thousand Tons

Hg

(lbs)

Annual

(2029)

-11

(-17%)

-3.2

(-8.6%)

+1.1

(+0.8%)

+5.8

(+0.4%)

Cumulative

(2007-2030)

-190

(-13%)

-57

(-6%)

+20

(+0.6%)

+14

(+0%)

-600

-500

-400

-300

-200

-100

0

100

200

300

400

Co

al

Gas

Hyd

ro

Nu

clea

r

Oil

Ren

ewab

le

tBT

U

-80

-60

-40

-20

0

20

40

Co

al

Gas

Hyd

ro

Nu

clea

r

Oil

Ren

ewab

le

GW

19

Ozone SIP

Acid Dep Plan

Bringing it All Together

NE-MARKAL Energy Model

Evolution of Energy System

12-State REMIEconomic Model

KeyEconomic Indicators

CMAQAir Quality Model

emiss

ions

expenditures

Wet/DryDeposition

Ambient Concentrations

BenMAPHealth Benefits Assessment

Health EffectsIncidence and Cost/Benefit

Goals & Policies

IRP

EconomicPlans

PM2.5 SIP

Hg Plan

Haze,etc.

Climate ActionPlan

NOx/SO2

2ndary Std

AQMP

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THANK YOU