The Clean Energy Standard (CES) has been a hot topic in the United States for some time, highlighted by President Obama as a way to reach his goal of obtaining 80 percent of America’s electricity from clean energy sources by 2035.
But what exactly is the CES and what does it mean in terms of costs associated with it?
I sat down with Anthony Paul, a center fellow in RFF’s Center for Climate and Electricity Policy, who has done extensive research
on this topic. He provided answers to many
of the common questions associated with the CES and gave useful insight into what it means not only for U.S. energy policy, but also how a CES will affect the American public.
The podcast is available to download for free on iTunes here.
Here are some highlights:
“What I have found is that the president’s proposal would yield a cumulative CO2 reduction by 2035 – that is all emissions from now until 2035 – would be 30 percent lower under his policy than under a business as usual policy. That would amount to about 20 billion tons of reduced CO2.”
“When I model this with a standard middle-ground set of assumptions about the costs, what the Haiku model suggests is that the preferred technology on economic grounds to meet the standard would be nuclear power – and a lot of it. But the model is a strictly economic model and doesn’t account for things such as public opposition… so I changed the assumption in the model and put a constraint on how much new nuclear we can build and therefore got out of it what would be the next preferred technology...”
“In our modeling, in a business as usual scenario, we find that in 2035, 23 percent of generation would be done by existing nuclear and hydro plants so if you set a CES level at 57 percent and don’t give them credit, those guys will still generate and so you’ll get from all other technologies the 57 percent you need plus the 23 percent from existing hydro and nuclear and you’ll be at 80 percent clean energy standard. So you can lower the standard if you don’t give them credit and still get the same emissions outcome.”
“There are likely no efficiency gains by crediting existing facilities but there are serious regional implications because the distribution of existing nuclear and hydro plants is not at all uniform across the country. For example, the Pacific Northwest has a lot of existing hydropower and if those facilities don’t get credit under the system then they will be treated just as coal under the program – none of them get credit. If that were to happen, the electricity prices in the Pacific Northwest would go up substantially – really substantially – under a CES, but if they do get credits, then the prices would go up by only a much smaller amount under a CES. But if they do get credit, consumers nationwide will be paying more and so you will have inter-regional transfers of wealth depending on whether or not you credit existing facilities.”
“The main obstacle to incorporating the standard is technological progress.”
“One way this policy can be constructed in order to facilitate technology advancement is to allow for the banking of credits.”
