As the U.S. Environmental Protection Agency (EPA) moves forward with standards to reduce power plant emissions—which are due to be finalized in June 2015—many states are wondering how they will comply. WRI’s fact sheet series, Power Sector Opportunities for Reducing Carbon Dioxide Emissions, examines the policies and pathways various states can use to cost-effectively meet or even exceed future power plant emissions standards. This post explores these opportunities in Wisconsin. Read about additional analyses in this series.
Wisconsin has already taken strides to reduce its near-term power sector CO2 emissions by implementing cost-effective clean energy policies. And the state has the opportunity to go even further. In fact, new WRI analysis finds that Wisconsin can reduce its CO2 emissions 43 percent below 2011 levels by 2020 by extending its existing clean energy policies and taking advantage of existing infrastructure. Achieving these reductions will allow Wisconsin to meet even ambitious EPA power plant emissions standards, which are due to be finalized in 2015.
Wisconsin’s Power Sector CO2 Emissions Have Been Declining
Between 2005 and 2011, electricity generation in Wisconsin grew by 4 percent, while CO2 emissions from the power sector declined by 14 percent. This is due in part to the fact that coal generation decreased by 4 percent while electricity from renewable sources doubled over the same time period.
Still, coal comprised 63 percent of in-state generation in 2011, while nuclear and natural gas comprised 18 percent and 10 percent, respectively. While renewable generating capacity in the state grew around 60 percent between 2007 and 2011, adding about 480 MW of new capacity, growth has slowed since then—only about 100 MW of new renewable capacity were added in 2012 or planned for 2013.The 2013 closure of the Kewaunee nuclear plant—which comprised 8 percent of the state’s generation in 2011—will also influence Wisconsin’s changing fuel mix.
How Wisconsin Can Meet Future Emissions Standards
As we discussed in a blog post in August, states may have considerable flexibility in how they comply with EPA’s forthcoming power plant emissions standards. EPA could allow states to pursue a range of CO2 reduction opportunities—including greater use of existing lower-carbon power plants, increased use of renewables, and energy efficiency, among other strategies.
Wisconsin could greatly improve its ability to meet future standards by taking relatively modest additional steps in continuing its existing clean energy programs—including its renewable energy standard and statewide energy efficiency programs—past 2015, after which no new measures are required. Our analysis found that Wisconsin could use the following tools to reduce its power sector CO2 emissions:
- Increasing renewable energy. Wisconsin has a renewable energy standard in place requiring 10 percent of the state’s electricity to come from renewables by 2015. By meeting this requirement through in-state generation and continuing to add new renewable generation at 1 percent per year beyond 2015, Wisconsin can reduce CO2 emissions by 6 percent below 2011 levels in 2020.
- Saving energy. Wisconsin’s statewide efficiency program, Focus on Energy, helps electricity customers save energy through rebates, financing options, energy assessments, and other programs. By continuing this program at current levels beyond 2015, Wisconsin can reduce CO2 emissions by 9 percent below 2011 levels in 2020.
- Using more combined heat and power (CHP). Wisconsin has the potential to use more CHP systems—which use waste heat to generate electricity more efficiently than the average power plant—at sites like universities, hospitals, and dairy farms. Increasing the use of CHP by about 60 percent can reduce Wisconsin’s CO2 emissions by 11 percent below 2011 levels in 2020.
- Increasing use of existing natural gas plants. The state’s most efficient natural gas plants—combined cycle (NGCC) units—generated much less electricity than they were capable of producing in 2011. Running existing NGCC plants at 75 percent can reduce CO2 emissions by 9 percent below 2011 levels in 2020.
- Increasing existing coal plant efficiency. Existing coal plants could save energy by upgrading their equipment and making other operational improvements. Increasing coal plant efficiency by 2.5 percent could reduce CO2 emissions by 1 percent below 2011 levels by 2020.
Wisconsin’s Clean Energy Policies Are Smart Economic Policies
The Cadmus Group estimated that Focus on Energy generated $300 million in electricity savings in 2012. Taking into account the program’s other benefits, like reduced use of natural gas for heating and avoided air pollution, the benefits of Focus on Energy outweighed its costs by nearly three times in 2012.
Research shows that the state can also grow the local economy by shifting away from coal. The Union of Concerned Scientists estimates that 680 MW to 2,450 MW of coal capacity (between 8 and 30 percent of Wisconsin’s total 2011 coal capacity) in the state are no longer economically competitive with cleaner sources of energy. According to the American Wind Energy Association, Wisconsin’s wind industry generated over $1 billion in investments within the state as of 2012. Continuing to develop in-state renewable resources after 2015 could help Wisconsin meet future EPA standards and lead to even greater local economic benefits. In fact, the Union of Concerned Scientists found that increasing the renewable energy standard to 25 percent by 2025 could generate over $2 billion in new capital investment, over $600 million in lease payments to landowners, and over 2,500 new jobs.
Wisconsin Can Build Off Progress Made to Date
Wisconsin has already taken steps to reduce emissions in the short term, but it’s important that the state continue to build on the progress it’s made. Taking additional action to extend its clean energy policies beyond 2015 could help the state achieve greater emissions reductions and adhere to ambitious standards, should EPA pursue them. Wisconsin’s experience has shown that emissions reductions are achievable and economically beneficial. This is all the more reason why the state should take additional steps to achieve even greater reductions in both the near and long term. By doing so, Wisconsin will not only be able to meet EPA’s power plant emissions standards, but can help prevent the worsening impacts of climate change.