January 01, 2015

The six-percent solution: EPA’s Clean Power Plan doesn’t do the math

Tamar Cerafici

Back in the halcyon days of my legal career, I clerked for a country judge in rural southeastern Idaho. His best words of advice: “Tamar, when everybody hates your decision, you got it right.” If that’s the standard, then the Environmental Protection Agency’s (EPA’s) Clean Power Plan (CPP) proposal must have gotten it right. 79 Fed. Reg. 34,830 (June 18, 2014). The CPP is the agency’s latest attempt to rein in greenhouse gas (GHG) pollution from fossil fuel-fired power plants.

Everybody hates it

The U.S. Chamber of Commerce says the plan goes too far, claiming it’s an unlawful legislative reach. Some environmental groups say the plan doesn’t go far enough to reduce carbon released from EGUs (electric generating units). See, e.g., EPA Clean Power Plan Underestimates Power of Renewable Energy to Reduce Carbon Emissions, Southern Alliance for Clean Energy (Oct. 17, 2014).

The nuclear industry seems to be on the fence. Like the middle child who’s grateful for any attention, nuclear power is just happy that EPA mentioned it at all in the CPP. The Nuclear Energy Institute, mouthpiece for the commercial side of nuclear, has led the chorus of happy utilities, noting:

We are pleased to see that EPA’s proposed rule recognizes the valuable attributes of nuclear energy, including the fact that it accounts for 63 percent of all carbon-free sources of electricity during production and is the only baseload source operating more than 90 percent of the time.

Richard Meyers, Press Release, “Nuclear Must Play a Prominent Role for EPA Carbon Rule to Succeed” (June 2, 2014). Nevertheless, when you dig into the details, you see that the CPP’s treatment of existing nuclear power is troubling: Where’s the Nuke?

States with nuclear capacity ask, “Why can’t we include our existing nuclear capacity in our plans?” These states and other nuclear professionals have found serious gaps in EPA’s analysis of the role nuclear power can play in a state’s carbon reduction plans. This article addresses a potential major gap in EPA’s math that could seriously undercut nuclear power’s effectiveness in creating state plans under the CPP.

The proposed Clean Power Plan

Distilled to its core, the proposed CPP attempts a 30 percent reduction in carbon dioxide (CO2) from EGUs by 2030 (from 2005 levels). Section 111(d) of the Clean Air Act holds each of the states responsible for coming up with standards of performance that meet national targets for air pollution reductions. Using this authority, the proposed rule provides emission guidelines that reflect the “best system of emission reduction—adequately demonstrated” (BSER). The proposed rule also sets state-specific emission-rate-based reduction targets. For power plants, the agency considered the integrated nature of electricity distribution in the United States. EPA also took into account system-wide advancements in the way electricity is produced, concluding that these advances could reduce power plant contributions to greenhouse gases.

The proposed CPP also provides different carbon reduction measures, or “building blocks,” that states can implement to meet these targets. Building block 3 suggests greater reliance on renewable and low carbon resources. Nuclear energy falls under this building block, which allows states to include “carbon free” energy sources in their analysis of reduction measures. Additionally, EPA defines BSER to include reductions in emissions rates from individual units (lbs. CO2/MWh) (pounds of carbon dioxide per megawatt hour) and reductions in a state’s overall emissions volume or mass (carbon intensity).

The CPP would force states to move to fossil fuels

The proposed CPP recognizes that the current market for nuclear power is at risk; utilities have scheduled the retirement of at least six plants in the United States. Further, EPA acknowledges the need for continued reliance on nuclear-powered EGUs and cites concern for the loss of about 5.7 gigawatts (GWs) in capacity from these planned retirements. Without too much fanfare, EPA notes that state plans may incorporate capacity from (1) new construction and (2) preservation of existing capacity slated for retirement. Accordingly, the CPP allows states to attribute roughly 6 percent of existing nuclear capacity to BSER. This little bone explains why the nuclear industry is almost giddy about the CPP.

The formula appears flawed

However, EPA fails to support the 6-percent assessment, and people with engineering degrees and math skills are starting to howl about it. As they’ve delved deeper into the math, they found that states with existing nuclear capacity will be forced to adapt their implementation plans to include increased reliance on natural gas.

In calculating the effect of nuclear electricity generation on carbon reduction goals, EPA’s “consistent national formula” applied a factor of 0.058 to nuclear generation in 2012, with that far smaller number added to the rest of the states’ 2012 power output to compute the overall carbon intensity. Three University of Tennessee nuclear engineering students and their advisor (the UT team) put EPA’s calculations to the test and found that 15 states would have lower “official” emissions if they replaced all of their nuclear generation with natural gas combined cycle (NGCC) generation. In a rare display of passion (for nuclear engineers), the team concluded:

By valuing only a fraction of current nuclear generation, utilities are incentivized to shut down nuclear plants in favor of natural gas, the exact opposite of the EPA’s stated intent with this plan. Our analysis has exposed a perverse incentive for states to allow the retirement of carbon-free nuclear generation for replacement with carbon-emitting sources.

Remy Devoe, Unintended Anti-Nuclear Consequences Lurking in the EPA Clean Power Plan, ANS Nuclear Cafe, American Nuclear Society (Aug. 20, 2014). In setting state goals under the plan, EPA allotted every power source except nuclear energy 100 percent of its generation capacity, whether fossil fuel-based or renewable.

The policy flaws are numerous

Aside from the mathematical irregularity, the policy flaws in the 6-percent allocation are pretty obvious:

  • The allocation ignores operational and planned capacity. Virginia’s four operating nuclear plants, for example, generated over 27 million MWh in 2012. Ohio—the sample case for EPA’s plan calculations—has two operating plants that generated nearly 2 million MWh in 2012 (this output is not included in the sample calculation). In Mississippi, Entergy’s Grand Gulf Station provides that state’s only carbon-free energy. (The Nuclear Energy Institute has an excellent state-by-state statistics page.)
  • The allocation appears to adopt the assumption that none of the currently licensed power plants will be in operation in 2030. That’s just wrong. Most of the 104 operating nuclear EGUs have already undergone relicensing and are scheduled to continue operation well into the 2030s.
  • There is no incentive for states to include nuclear power in their implementation plan. In at least 15 states, the allocation creates a clear disincentive for states to include existing nuclear plants, paving the way for utilities to retire operating plants prematurely and replace them with fossil-fueled baseload generation.
  • Finally, EPA presents no basis for the allocation, except rough, back-of-the-envelope math and faulty assumptions. EPA treats “at risk” units identically, without consideration for the variables in age or operation. There is nothing in the CPP proposal that would allow states with planned construction to account for the carbon displacement in their state plans. The states with nuclear plants currently under, or planned for, construction must assume that 100 percent of the generation will be available by 2020, when the interim state implementation plans are due. (Given the industry’s abysmal ability to finish a project on schedule, that’s quite a stretch.)

Of course, EPA has bigger worries than the nuclear question. The rule is fraught with enforceability challenges and the modeling used to define its targets has been aptly described as a “heavy lift” for even the most sophisticated modelers.

Without a clear, understandable treatment of nuclear energy, the proposed CPP goals would be difficult to meet. The nuclear industry is poised to play a major role in the CPP, but the industry should not sacrifice good engineering and solid math for a minute in the limelight. The 6-percent solution is not the best way to assess the role nuclear power should play in carbon reduction.

Tamar Cerafici

Tamar Cerafici is a solo practitioner in New Hampshire who maintains a virtual practice focusing on nuclear policy issues, climate change, and sustainability. She is the education vice chair for the Section’s Special Committee on Law Students.