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Arizona’s Building Blocks: Cleaner Generation Sources (part 3 of 4)

In our last two posts we started walking through the EPA’s calculation of state goals for CO2 emissions, covering Building Block 1 and Building Block 2. In this post, we’ll continue the walk-through with Building Block 3: Cleaner Generation Sources.

Block 3-1 Clearner generation sourcesNeither nuclear power nor renewable energy (“RE” e.g. wind and solar) generation create any CO2 emissions. One could think of these as having a lbs/MWh emissions rate with a “0” in the numerator. Thus, to the extent that states add nuclear and renewable energy to their energy resource mix, they can lower their overall emissions rate.

While few states are actively building new nuclear plants, EPA proposes that states would get credit for a small fraction (6%) of energy from any existing nuclear power plants that are “at risk” of being retired. This credit would apply to Arizona’s Palo Verde Nuclear Generating Station, despite the fact that the plant’s operating license is not set to expire until 2045.Block 3-2 Clearner generation sources

In addition to nuclear, EPA assumes that each state could ramp up its renewable resources over time. In Arizona’s case, the EPA anticipates RE to increase from 2% of total generation recorded in 2012, to 4% of total generation by 2030.

This final amount is considerably lower than most states. In fact, Arizona ranks 37th in terms of the overall amount of renewable energy generation anticipated (we’ll discuss the reasons for this low expectation in another post).

Expected renewable energy deployment according to EPA’s proposal.

 

State

Renewable Energy (MWh) in 2029

Rank

Texas

85,962,502

1

California

41,150,704

2

Pennsylvania

35,330,855

3

New York

24,261,905

4

Florida

22,109,614

5

Illinois

17,818,004

6

Washington

17,725,558

7

Oklahoma

15,579,318

8

Alabama

14,292,801

9

Ohio

13,775,594

10

Oregon

12,567,372

11

Georgia

12,230,636

12

North Carolina

11,668,176

13

Virginia

11,192,008

14

Colorado

10,839,820

15

West Virginia

10,273,036

16

New Jersey

10,147,466

17

South Carolina

9,675,568

18

Wyoming

9,427,996

19

Kansas

8,884,938

20

Massachusetts

8,613,477

21

Iowa

8,565,921

22

Michigan

8,055,859

23

Minnesota

7,888,544

24

Indiana

7,547,086

25

Louisiana

6,891,619

26

Wisconsin

6,859,301

27

Nevada

6,405,939

28

Maryland

5,982,069

29

North Dakota

5,459,957

30

Mississippi

5,458,430

31

New Hampshire

4,822,223

32

New Mexico

4,721,996

33

Arkansas

4,708,823

34

Tennessee

4,305,814

35

Nebraska

3,819,427

36

Arizona

3,663,325

37

Maine

3,611,728

38

Idaho

3,196,687

39

Connecticut

3,114,375

40

Missouri

2,763,528

41

Montana

2,722,706

42

Utah

2,373,069

43

South Dakota

1,818,850

44

Kentucky

1,713,556

45

Hawaii

1,046,927

46

Delaware

1,038,351

47

Rhode Island

476,110

48

Alaska

163,089

49

 

EPA’s expectation seems to underestimate Arizona’s likely performance in this category. For example, based on recent reporting from the states largest utilities Arizona Public Service (APS), Salt River Project (SRP), and Tucson Electric Power (TEP) had a combined renewable energy portfolio of 3,305,021 MWh in 2013, which is much higher than the EPA’s assumed starting point of 2,150,930 MWh. By the end of 2015, APS and TEP alone are planning to have combined renewable energy generation equal to 3,886,173 MWh, thus surpassing EPA’s target 15 years early. There are some complicating factors regarding how out-of-state generation might be counted (we will explore this in future posts), but in short, Arizona appears positioned to outperform the EPA’s proposal for Building Block 3. If that occurs, it would offer some flexibility for underperformance in the other Building Blocks.

AZ Existing RE

 Written by Eddie Burgess, Energy Policy Innovation Council