The Intersection of Energy Reliability Objective and Other Environmental Policies and Programs, and the Role of Markets

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The Intersection of Energy Reliability Objective
and Other Environmental Policies and
Programs,and the Role of Markets

• Barry Wallerstein, D.Env
• Executive Officer, South Coast AQMD
• CFEE Workshop
• August 30, 2007

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Air Quality Challenges

• Localized Exposure/Environment Justice
• Air Toxics
• Particulate Matter (PM2.5)
• Regional Pollutants
• Particulate Matter (PM2.5)
• Ozone (Smog)
• Climate Change
• GHG

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Federal Standard
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Federal Standard
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Federal Standard
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Federal Standard
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CO2 Emission Comparison(2002, In Million Metric
Tones )
485
332
153
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Comparison of Emissions from Power Generation
Units
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Actions Taken By SCAQMDDuring 2000-2001 Energy
Crisis

• Issued SCAQMD Executive Orders
• Implemented Governors Executive Orders
• Modified Emergency ICE Permit Conditions
• Expedited New Power Plant Permitting
• Developed State Mitigation Fund for New Peakers
• Approved inter-district transfer of ERCs
• Amended RECLAIM Program
• Developed R1309.1

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Electricity Generation Challenges

• In-Basin Aging Power Plants
• Scarcity of Emission Reduction Credits (ERC)
• Transmission Line Limitations
• Reliability
• Facility Siting/ Env. Justice Concerns

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Aging Power Plants in South Coast Area (as of
2010)
Age of Power Plants Generation Capacity (MW) Total In-Basin Generation of Total
30 years or older 7,826 12,225 64
35 years or older 7,201 12,225 59
40 years or older 6,756 12,225 55
45 years or older 4,112 12,225 34
50 years or older 1,597 12,225 13
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PM ERC Market Price
Includes January through July 2007 data
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Air Quality and Power Generation Intersections

• Need Determination
• New Capacity Needed for Growth and Replacement
• Base load vs. peaking units
• Technology Selection
• DSM/Renewables vs. Fossil
• Siting
• System Stability vs. Localized/EJ Impacts

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SCAQMD R1309.1 Priority Reserve

• Tiered requirements based on location that
  reflect current air quality
• Mitigation fees for ERCs to invest in pollution
  reduction projects
• 92,000/lb PM 34,400/lb SOx
• ERCs to be issued for
• First 2700 MW units unless approved by the Board
• After CEC approval and long-term contracts except
  for serving native load

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Proposed Projects
Project Capacity (MW)
AES Highgrove 300
BP Carson/Edison Carson Hydrogen Power Project 500
CPV Ocotillo 850
El Segundo Repower 630
Reliant Energy 656
Riverside Energy Resource City of Riverside 96
Sun Valley 500
Vernon Power Plant City of Vernon 943
Walnut Creek 500
Total 4,975
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Other Issues

• Long Lead Time for Project Development
• Uncertainty
• Regulatory
• Business

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Other SCAQMD Commitment

• Energy Resource Planning (1,000,000)
• Initial RFP for 450,000
• Feasibility/Pilot Study
• Advanced PM2.5 Control Technologies (4,000,000)

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Policy Recommendation

• Enhanced Energy Resource Planning
• Integrate Energy and Air Quality Policies
• Develop a Master Plan
• Determine Conformity to Master Plan
• Establish Mandatory Retirement Schedule for Aging
  Plants