IIP’s response to the proposed US carbon emission guidelines

December 12, 2014
Our submission to the EPA looks at how to capture the huge potential of industrial energy efficiency programs under the proposed 111(d) guidelines for power generators.

IIP has submitted its comments to the EPA on the proposed carbon emission guidelines for existing electric generating units under the Clean Air Act (section 111(d)) along with a technical paper.

IIP’s Technical Director, Bruce Hedman says the proposed guidelines could provide a powerful new driver for industrial energy efficiency if industrial energy efficiency programs – either within or outside of ratepayer programs – are properly designed and structured as part of state compliance plans.

“We are pleased that the proposed rule allows states significant flexibility to use cost-effective and innovative compliance options. To emphasise the huge potential of ratepayer and private industrial energy efficiency programs, as well as combined heat and power (CHP), we ask EPA to make it clear in its rule that it allows and encourages states to include these measures in their plans,” he says.

“Industrial energy efficiency, including CHP projects, can produce large blocks of low-cost energy and carbon savings. Undoubtedly, states will pursue energy efficiency and associated carbon reductions for 111(d) compliance through their traditional ratepayer energy efficiency programs. However, states and/or power plants could also consider offering industrial companies a means to privately deliver and receive credit for their energy efficiency resources in parallel to or outside of ratepayer programs, particularly in situations where ratepayer programs are not likely to be able to tap into the large opportunities for carbon reduction available in industry. This could also be attractive to industrials as currently many industrial efficiency programs do not address the broader, and larger, energy efficiency opportunities available through continuous improvements in processes and site management. We advise that states will need guidance and technical assistance on how to design programs around industry needs that provide measurable and verifiable results under the EPA compliance requirements.”

Bruce also detailed the importance of CHP in his submission.

“EPA should ensure that states are aware that CHP can be a valuable compliance tool and provide appropriate guidance for states to include policies that support CHP deployment in their compliance plans. In particular, states will need model rules detailing the best way to include CHP and waste heat to power (WHP) in renewable portfolio and energy efficiency standards and guidance on how to appropriately credit CHP output under those policies.”

The technical paper, "Securing Greenhouse Gas Reductions through Private-Sector Delivered Industrial Energy Efficiency under EPA’s Clean Power Plan", outlines the potential role privately-delivered industrial energy efficiency can play in helping states reduce power plant emissions more cost effectively. It was commissioned by IIP, the National Electric Manufacturers Association (NEMA) and a number of industrial stakeholders.

For more background reading, see the SEE Action guide on ratepayer programs and how they can be tailored to meet individual state needs.

Bruce and IIP Strategic Advisor David Wooley also presented on how to include IEE and CHP in state compliance plans at a meeting on 111(d) Energy Efficiency Compliance Pathways on December 4, 2014 in Virginia. The “3N” meeting was hosted by the National Association of State Energy Officials (NASEO), the National Association of Clean Air Agencies (NACAA) and the National Association of Regulatory Utility on Commissioners.