Role of Renewable Energy Credits and Carbon Offsets

Posted on March 2, 2016 by Dr. Nilmini Silva-Send

(Many thanks to Cameron Bernhardt for his research for this post)

This second post continues the discussion of the role of Renewable Energy Credits (RECs) and Carbon Offset Credits in California policies started in the last post. In the next and last post of the series, I will discuss their role in city climate action plans.

How are renewable energy credits used in California?

Renewable energy credits (RECs) represent the non-power characteristics of renewable electricity generation. Those who possess ownership of RECs are thus able to make claims that the electricity they consumed or generated came from eligible renewable sources. Although these rights to environmental claims are the primary function of RECs, there are a number of different energy policies for which RECs play a significant role. Already in 2008, the California Public Utilities Commission (CPUC) recognized the significance of RECs in, among others, the California Solar Initiative, the Self-Generation Incentive Program, tariffs and standard contracts for RPS-eligible generation, and voluntary greenhouse gas reduction programs.

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Renewable Energy Credits and Carbon Offset Credits

Posted on February 17, 2016 by Dr. Nilmini Silva-Send

(Many thanks to Cameron Bernhardt for research and writing for this post)

While EPIC has written about renewable energy credits in California in the past, this constitutes the first of a series of blog posts related to renewable energy credits and carbon offsets in order to update and highlight their use in one or more policy mechanisms, including local and regional climate action plans, to reduce greenhouse gas emissions. The posts will discuss the following topics:

  • What are Renewable Energy Credits (RECs) and Carbon Offset Credits?
  • The Role of Renewable Energy Credits (RECs) and Carbon Offset Credits in California
  • The Use of RECs and Carbon Offsets in City Climate Action Plans

In this post, I will focus on defining RECs and carbon offsets with an overview of their role.

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Stay of EPA’s Clean Power Plan, SB 350, and CAISO Regional Expansion

Posted on February 10, 2016 by Joe Kaatz

Yesterday, the U.S. Supreme Court issued orders (such as this Order) granting five petitions to stay the EPA’s “Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units” 80 Fed. Reg. 65,662 (October 23, 2015), or Clean Power Plan (CPP). Parties seeking the stay range from states to independent power producers to rural electric cooperatives.   Petitioners sought a stay from the highest Court after the D.C. Circuit denied a stay of the rule on January 21, 2016.  The stay remains in effect pending disposition of applicants’ petition for review in the D.C. Circuit by a three-judge panel (and any subsequent review by the full D.C. Circuit) and disposition of any subsequent writ of certiorari to the U.S. Supreme Court.   Five Justices supported the order staying the rule (Chief Justice Roberts and Justices Alito, Kennedy, Scalia, and Thomas) with four Justices dissenting (Justices Breyer, Ginsburg, Kagan, and Sotomayor).

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Center for Biological Diversity et al., v. California Department of Fish and Wildlife, and the Newhall Land and Farming Company: the Burden of CEQA Land Use GHG Emission Reduction Analysis at the Local Level

Posted on January 20, 2016 by Joe Kaatz

The Center for Biological Diversity et al., v. California Department of Fish and Wildlife, and The Newhall Land and Farming Company, 62 Cal.4th 204 (2015)(hereafter, the Newhall Land case) addresses three issues: 1) whether the project level environmental impact report (EIR) validly determined that the development would not significantly impact the environment by its discharge of greenhouse gases (GHGs)?; 2) Were the mitigation measures adopted for the protection of a freshwater fish, the unarmored threespine stickleback, improper because they involved taking of fish prohibited by the Fish and Game Code?; and 3) Were plaintiff’s comments on two other areas of disputed impact submitted too late in the environmental review process to exhaust their administrative remedies under Public Resources Code section 21177?   This post will only address the first question through an analysis of the Courts review of the project level EIR significance determination for GHGs under CEQA.

 

The Newhall Land case illustrates the difficulty of complying with statewide GHG reduction targets at the local level using a procedural environmental review mechanism (the California Environmental Quality Act (CEQA)) to determine whether an individual project’s GHG emission will, when understood cumulatively, create a significant environmental impact triggering an environmental impact review (EIR), mitigation, and/or statement of overriding consideration. Because CEQA is procedural and operates through lead agency discretion, AB 32 (2006) and its Scoping Plan create non-enforceable targets and recommendations for local governments, and little guidance, track record, or consensus exists for a standard to make GHG significant determinations at the project level, lead agencies and local governments are left to struggle with creating a defensible significance analysis and all the legal exposer. There is a need to create consensus around baseline and project level methodology for CEQA significance determinations to connect project level GHG emission impacts and mitigations with statewide and local GHG reduction targets.

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Estimating the GHG Emissions Impacts of Reducing or Displacing Electricity: Is it time for a standard method in California?

Posted on January 13, 2016 by Scott Anders

California has adopted legislation and has executive orders in place laying out aggressive, long-term greenhouse gas (GHG) reduction targets. There are also specific energy policies including those to increase efficiency, generate more renewable electricity, and to reduce fossil fuel use in the transportation sector that in essence support the overarching goal of reducing greenhouse gases. While each of those energy policies can be measured in kilowatt-hours, therms, and kilowatts, one way to normalize them is in terms of their greenhouse gas reduction impacts. This allows for comparison across types of policies and programs and across sectors. In a way, carbon – or carbon dioxide equivalent – is becoming the common currency of California’s energy policies.

As I have written about in previous posts (11/5/16 and 12/1/15), one of the most important variables in estimating greenhouse gas emissions from electricity generation is the rate of emissions – or emissions factor. In this post, I will discuss the different types of emissions factors, focusing on those needed to estimate the greenhouse gas impacts of reducing or displacing a unit of electricity, their policy importance, and the possible need for standard approaches and methods in California.

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The Season for Climate Action: Paris Agreement and City of San Diego Climate Action Plan

Posted on December 17, 2015 by Dr. Nilmini Silva-Send

The Draft Decision -/CP.21 known as the “Paris Agreement under the United Nations Framework Convention on Climate Change” was adopted by consensus of 195 countries on December 12, 2015 at COP21 and includes the Paris Agreement an Annex to the Decision. This post discusses some of the main provisions relating to GHG reductions only, as these are closely related to energy policy.

The Paris Agreement has a preamble followed by 29 articles and will be open for signature from April 22, 2016 to April 21, 2017. It will come into force after at least 55 Parties accounting for at least an estimated 55% of total global greenhouse gas (GHG) emissions have ratified or otherwise accepted the treaty. “Total global greenhouse gas emissions” means the most up-to-date reduction amounts communicated by the Parties by the time of adoption of the Paris Agreement (i.e., December 11, 2015). This means the Intended Nationally Determined Contributions (INDCs) submitted, where INDCs represent the “intended” actions for most parties, not actual implemented actions, as discussed in a previous post. As explained there, initial analysis of the INDCs submitted by October 1, 2015 indicated there is still a large gap to reach the range where we need to be to reduce warming to within 2 degrees Celsius (2˚C) by the end of the century. With the impacts of the INDCs through October 1, 2015, we are on track to reach about 2.7˚C increase by end of the century. Continue reading →

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Addressing the Role of Electric Vehicles in Greenhouse Gas Reduction: California Independent System Operator Action

Posted on December 15, 2015 by Joe Kaatz

V2G

Source: Kempton and Tomic 2005. Journal of Power Sources

This is the third post in a series looking at legislative and regulatory action addressing Electric Vehicle (EV) greenhouse gas (GHG) emission reductions(See previous posts on the CPUC and State Legislative Action). This post focuses on efforts by the California Independent System Operator (CAISO).

It is well established that electrifying transportation is essential to achieving California’s clean energy mandates. The transportation sector accounted for approximately 37 percent of total GHG emissions in 2012, with on-road vehicles accounting for more than 90 percent of emissions in the transportation sector. To lessen the negative impacts of vehicles on California roads, in February of 2013, the Governor’s Interagency Working Group published the Zero Emission Vehicle (ZEV) Action Plan. The ZEV Action Plan established the goal of 1.5 million ZEVs on California roads by 2025. Under the ZEV Action Plan, the Governor assigned CAISO to lead the effort of mapping a way to enable EVs to provide grid services in collaboration with the California Energy Commission (CEC), California Public Utilities Commission (CPUC), California Air Resources Board (CARB), the Governor’s office, and other industry stakeholders. CAISO has a unique role in the electrification of the transportation sector and is responsible for integrating EVs into the grid as seamlessly as possible.

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COPs and CAPs: Goals for stabilization of carbon emissions

Posted on December 4, 2015 by Dr. Nilmini Silva-Send

The COP21 talks and events started on Monday November 30, 2015. Though California is not a nation, and therefore not a member of the UNFCCC, there are 8 California lawmakers accompanying Governor Brown to the Conference. While the US government, along with 20 other nations, launched Mission Innovation with a coalition of 20 billionaires, pledging to double R&D investment in the next five years into renewable energy, negotiators started the difficult job of drafting an agreement text for signature next week.

This post looks at the provisions of the negotiation text relating to goals, as available in the Advance Unedited Version of the negotiation text of November 19-23, 2015 and then looks at the type of goals and measures that cities are using in city climate action plans (CAPs). Continue reading →

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Splitting the Emissions Baby: Allocating GHG Reductions in the Electricity Sector Part II

Posted on December 1, 2015 by Scott Anders

In my last post, I discussed the dilemma of how to allocate the avoided greenhouse gas (GHG) emission between policies that policies to increase renewable electricity and reduce electricity consumption. Estimating the effects of increased renewable first will artificially increase the avoided emissions from that policy and decrease the emissions from efficiency. The opposite is also true. The post provided an illustrative example to demonstrate the challenge and to show that there is an overlapping amount of emissions that must be allocated – or split – between the two policies. It also shows the possible perverse outcomes if care is not taken with this issue. In this post, I will summarize our solution to this problem – our approach to “splitting the electric emissions baby.”

Splitting the Electric Emissions Baby

There is no standard protocol in the sequencing of calculation to prevent the allocation problem. Any assumption to put one measure before another is arbitrary. For example, California has a preferred order for serving incremental energy needs: efficiency first, then renewables, and then traditional sources. Using this order as a guide would overestimate the emissions from efficiency and underestimate the emissions from renewable energy. Our approach to overcome this problem is to allocate emissions between the quantity and rate policies based on the relative contribution to the combined reduction (rate plus quantity).

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INDCs and Why Cities are Important for Global Climate Action

Posted on November 24, 2015 by Dr. Nilmini Silva-Send

As we approach UNFCCC’s 21st session of the Conference of Parties (COP 21) to take place November 30 – December 11 in Paris, expectations are high that more than 190 nations will be able to come to some kind of new binding agreement to reduce greenhouse gas emissions after 2020. In preparation for Paris, by decisions 1/CP.19 and 1/CP.20, it was agreed to invite all 195 members of the UNFCCC to submit their “pledges”, now known as Intended Nationally Determined Contributions (INDCs), by October 1, 2015. The INDCs can be considered Climate Action Plans (CAPs) on the grand, national level. As suggested by 1/CP.20 para. 15, INDCs may provide quantifiable information on a reference point such as a base year, scope and coverage, assumptions and methodological approaches, reductions, and show how the Party considers its INDC fair and ambitious towards achieving the objective of the Convention as set out in Article 2 of the UNFCCC. Article 2 states that “[t]he ultimate objective of this Convention… is to achieve…stabilization of greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system… within a time frame sufficient to allow ecosystems to adapt naturally to climate change, to ensure that food production is not threatened and to enable economic development to proceed in a sustainable manner.” Continue reading →

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