&EPA
Roadmap for Incorporating Energy
Efficiency/Renewable Energy
Policies and Programs into State and Tribal
Implementation Plans
Appendix E: Baseline Emissions Projection Pathway
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EPA-456/D-12-001f
July 2012
Roadmap for Incorporating Energy Efficiency/Renewable Energy
Policies and Programs into State and Tribal Implementation Plans
Appendix E: Baseline Emissions Projection Pathway
By:
U.S. Environmental Protection Agency
Office of Air Quality Planning and Standards
Outreach and Information Division
Research Triangle Park, North Carolina
U.S. Environmental Protection Agency
Office of Air Quality Planning and Standards
Outreach and Information Division
Research Triangle Park, North Carolina
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ACKNOWLEDGMENTS
We would like to acknowledge substantial contributions from members of an inter-office EPA
team that included the Office of Atmospheric Programs, the Office of Policy Analysis and
Review, the Office of General Counsel and Regions 1 and 6. This document also reflects
comments received from a number of stakeholders, including state and local air quality
agencies.
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Contents
SECTION E.I: BASICS OF BASELINE EMISSONS PROJECTION APPROACHES E-5
Pathway Description E-5
Tradeoffs of Pathways E-5
Circumstances the Pathway is Best Suited For E-6
SECTION E.2: BASELINE EMISSONS PROJECTION APPROACHES FOR ELECTRIC GENERATING UNITS E-6
EPA's Baseline Emissions Projections E-6
Non-EPA Baseline Emission Projections for Electric Generating Units E-7
SECTION E.3: STEPS FOR INCORPORATING "ON THE BOOKS" ENERGY EFFICIENCY POLICIES E-8
Step 1: Choose a Baseline Demand Forecast for Electric Generating Unit Projections E-8
Energy Information Administration's Demand Forecasts E-9
Regional or State Specific Electricity Demand Forecasts E-9
Step 2: Document Energy Efficiency Policy Assumptions in Electric Generating Unit Baseline Demand Projections
E-10
Energy Information Administration Energy Efficiency Policy Assumptions E-10
Regional or State Specific Policy Assumptions E-ll
Step 3: Review "On the Books" Energy Efficiency Policies for Inclusion in the Electric Generating Unit Baseline
Demand Projections E-ll
Comparing "On the Books" Policies Against Energy Information Administration Assumptions E-ll
Comparing "On the Books" Policies to State or Regional Forecast Assumptions E-12
Documentation Procedures E-12
Step 4: Project Electric Generating Unit Baseline Emissions for Attainment Year(s) in the Future E-12
Considerations for Choosing an Electric Generating Unit Baseline Emissions Projection Method E-12
Perform Energy Modeling To Project Electric Generating Unit Baseline Emissions E-12
Future Attainment Year Baseline Using Other Approaches E-13
SECTION E.4: STEPS FOR INCORPORATING "ON THE BOOKS" COMBINED HEAT AND POWER POLICIES E-13
Step 1: Review Combined Heat and Power Sources in Baseline Inventory and the Relative Emission Rates for
Combined Heat and Power Generation E-14
Step 2: Determine Combined Heat and Power Policy Assumptions in Electric Generating Unit Baseline
Projections E-14
Step 3: Review "On the Books" Combined Heat and Power Policies to Determine if More can be Included in
Electric Generating Unit Baseline Projections E-14
Documentation Procedures E-14
Step 4: Project Electric Generating Unit Baseline Emissions for Attainment Year(s) in the Future E-15
SECTION E.5: STEPS FOR INCORPORATING "ON THE BOOKS" RENEWABLE ENERGY POLICIES E-15
Step 1: Review Renewable Energy Sources in Baseline Inventory and the Relative Emission Factor for Each Type
of Renewable Energy E-15
Step 2: Determine What Renewable Energy Policy Assumptions are in Electric Generating Unit Baseline Supply
Projections E-15
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Step 3: Review "On the Books" Renewable Energy Policies to Determine if More can be Included in the Electric
Generating Unit Baseline Supply Projections E-16
Documentation Procedures E-16
Step 4: Project Electric Generating Unit Baseline Emissions for Attainment Year(s) in the Future E-16
REFERENCES E-17
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SECTION E.I: BASICS OF BASELINE EMISSONS PROJECTION APPROACHES
Pathway Description
When developing a State Implementation Plan/Tribal Implementation Plan (SIP/TIP),
jurisdictions start with an inventory of current emissions and a baseline projection of future
emissions. The baseline emissions projection shows the level of emissions in the future target
year that will result if no additional control strategies, policies or programs are implemented.
The baseline emissions projection includes effects of existing federal, state, tribal and local
regulations and programs that will come into effect by the future attainment year, but does not
include any additional explicit ("on the way") strategies not yet in statute or codified by a
regulatory body.
The goal of developing a baseline
emissions forecast is to account for as
many variables as possible that affect
future year emissions and, in turn,
would impact ambient air quality
levels. Emission levels (in addition to
meteorology and topography,
transport and fate of pollutants) are
one of the most important parameters
in determining resultant ambient air
quality. For the electric generating
unit (ECU) sector, future emission
levels are affected by electricity
demand growth rates and the future
resource mix and pollution control
utilization of electricity generators.
Existing energy efficiency/renewable
energy (EE/RE) policies and programs directly
characteristics and are important to consider
Task Checklist:
Baseline Emissions Projection Pathway
Identify and describe EE/RE programs and policies to
include in the baseline emissions projection
Ensure EE/RE policies and programs will be in place for the
duration of the planning period
Perform an analysis of the energy impacts expected from
the policies and programs
S Select a baseline demand forecast to use for EGU
projections
•/ Assess new and existing generation capacity of EGUs
in future year(s)
S Determine what EE/RE policy assumptions are
already in EGU baseline forecast
•S Select energy model or other approach for
projecting EGU emissions
•S Account for "on the books" mandatory EE/RE
policies in modeling or other approach
•S Document results of modeling or other approach
Ensure EE/RE emission reductions in the baseline emission
projections are not accounted for as part of another
pathway to avoid double counting
affect these inherent electric power sector
when projecting future emissions.
Emissions and ambient concentrations are not linear. So, to assess the relationship between
emission levels and the resultant ambient air quality, state, tribal and local agencies need to
perform an air quality modeling analysis for a base year and a future attainment year. In
addition, emission projections provide a basis for developing and analyzing the impacts of
control strategies for SIPs/TIPs, conducting attainment analyses, and tracking progress towards
meeting air quality standards.
Tradeoffs of Pathways
State, tribal and local agencies can, of course, select more than one pathway for their
jurisdiction's different EE/RE policies and programs. It is important to understand the tradeoffs
between the baseline emissions projection pathway and other possible pathways, such as
control measure, emerging/voluntary and weight of evidence pathways. State, tribal and local
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agencies can include EE/RE policies that are currently "on the books" in a baseline emissions
projection. This means the EE/RE policy must already be adopted in federal or state regulation,
a public utility commission order and/or local law. (The policies included in SIP/TIP baseline
emissions forecasts are not subject to the same federal enforceability criterion as SIP/TIP
control measures. For more information, see Appendix F.) During implementation of the
SIP/TIP, if the EE/RE policy is not being implemented and the area is relying on the EE/RE policy
in the baseline to help the area attain a NAAQS and the EE/RE policy is not implemented as
assumed and air quality does not improve so as to meet the NAAQS as anticipated in the
SIP/TIP, then the jurisdiction may be required to implement backup policies to make up for the
emissions shortfall. The air agency might also agree voluntarily to revise their SIP.
Alternatively, EPA may initiate a SIP call under section 110 of the CAA in which EPA can require
that the state revise the SIP to make up the emissions relied upon to meet the applicable
NAAQS.
Circumstances the Pathway is Best Suited For
The baseline pathway is best suited for "on the books" EE/RE policies that state, tribal and local
agencies want to include in their SIP/TIP baseline, as long as these policies are not accounted
for elsewhere in the SIP and are not emerging/voluntary programs. If incorporated in the
baseline, such policies would not be federally enforceable but, if the jurisdiction is relying on
the EE/RE policy to attain a NAAQS, EPA could initiate a Clean Air Act SIP call, as noted above, if
the circumstances warranted. The baseline pathway works well when multiple states are
coordinating on emissions baseline development and air quality modeling due to the
complexity, resources and expertise needed to complete the task.
The baseline pathway can also include cases where a local community wants to capture local
EE/RE SIP measures that are not part of federal or state regulations or statutes. The EPA is
open to the concept of a state entering into a binding commitment with a community in order
to capture such reductions within the baseline pathway, and the details of such a commitment
are crucial. Any such commitment must provide for complete restoration of any shortfall in
emission reductions if the local community does not successfully implement the local EE/RE SIP
measures and the measures are needed to attain the applicable National Ambient Air Quality
Standards (NAAQS). The state would be ultimately responsible for achieving the emission
reductions, so the language in the commitment must satisfy the state. The EPA regional offices
are prepared to give timely feedback to states on acceptability of such commitment language,
as the states pursue a memorandum of understanding or similar written commitments with
local communities
SECTION E.2: BASELINE EMISSONS PROJECTION APPROACHES FOR
ELECTRIC GENERATING UNITS
EPA's Baseline Emissions Projections
The EPA develops and periodically updates a power sector database, the National Electric
Energy Data System (NEEDS). The NEEDS contains the following data on EGUs:
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• Current and future projections for the unit level records of all existing and
planned/committed EGUs as reflected in EPA's power sector modeling applications;
• Basic geography;
• Operating assumptions;
• Air emissions; and
• Other ECU characteristics.
The EPA uses the Integrated Planning Model (IPM) to simulate the behavior of the power sector
and to analyze the impact of environmental regulations.1 The IPM is a multi-regional, dynamic,
deterministic linear programming model of the U.S. electric power sector. It provides forecasts
of least cost capacity expansion, electricity dispatch, and emission control strategies, while
meeting energy demand and environmental, transmission, dispatch, and reliability constraints.
The IPM can be used to evaluate the cost and emission impacts of proposed policies that limit
emissions of key pollutants from the electric power sector, including sulfur dioxide, nitrogen
oxides, carbon dioxide, and mercury. Other emissions (including PM2.s and PMi0) are also
calculated with a post-processing step. The IPM's capabilities in power sector modeling include
the ability to analyze the impact of:
• On-the-books or proposed EE/RE policies for the baseline and control strategy
pathways, respectively; and
• Constraints such as federal or state-level rules, settlements and consent decrees, cap
and trade programs as well as EE/RE policies.
Outputs from IPM are processed to be used as direct inputs into air quality models.
Non-EPA Baseline Emission Projections for Electric Generating Units
State, tribal and local agencies have the choice to independently develop baseline emissions
projections for the ECU sector or to use EPA's baseline emissions projections. If a state, tribal
or local agency chooses to develop its own baseline emissions projections for SIP/TIP purposes,
the agency must make and document assumptions that reflect (1) electricity demand and
electricity supply, (2) ECU emission characteristics and (3) how and when EGUs will operate in
the future. The projection of new generation does not need to be an independent forecast
developed by the state, tribal or local air agency, but can be derived from other available
forecasts. When other forecasts of generation capacity are used, there should be
documentation of the assumptions in those forecasts and how the assumptions relate to other
assumptions of the baseline emission projection, such as demand and emissions.
Regardless of whether the ECU baseline projection is developed in-house or externally, the
following assumptions should be documented:
1 For more information on detailed documentation of the latest publicly available versions of NEEDS and IPM, go
to: http://www.epa.gov/airmarkets/progsregs/epa-ipm/BaseCasev410.html.
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• Projected economic growth, fuel prices, and wholesale and retail electricity prices
• Projected emissions based on the above electricity demand forecast assumptions with:
o Cost and performance of future generation
o Cost and performance of future retrofit technology
o Emission limits and rates and retirements as a result of environmental and
economic constraints
• The methodology for projecting new generating capacity
• Alternative baseline emission projections (should include the methods used for
projecting future emissions, determining how generating capacity was dispatched to
meet the assumed demand, and how emissions projections are related to the dispatch
of generation)2
• Identify and quantify energy impacts of EE and demand response policies and programs
in the baseline projections
• Identify and quantify energy impacts of RE policies and programs in the baseline
projections
SECTION E.3: STEPS FOR INCORPORATING "ON THE BOOKS" ENERGY
EFFICIENCY POLICIES
Federal, state, tribal and local EE policies that are currently "on the books" can be incorporated
into an electricity demand forecast used for a baseline emissions projection. Use the following
four steps to account for the EE policies within the baseline emissions projection pathway.
• Step 1: Choose a baseline demand forecast for electric generating unit projections
• Step 2: Document EE policy assumptions in electric generating unit baseline demand
projections
• Step 3: Review "on the books" EE policies for inclusion in the electric generating unit
baseline demand projections
• Step 4: Project electric generating unit baseline emissions for attainment year(s) in the
future
(Step 4 also applies to the steps in Sections E.4 and E.5 for incorporating "on the books"
combined heat and power policies and "on the books" renewable energy policies, respectively.
The step is the same in all three sections, E.3, E.4 and E.5.)
Step 1: Choose a Baseline Demand Forecast for Electric Generating Unit
Projections
State, tribal and local agencies can reference a number of information sources that produce
electricity demand forecasts. Each information source may already reflect different levels of
"on the books" EE policies, so it is important to understand and document how these are
2 The method used to estimate the dispatch of generation can differ from the method used in EPA's baseline
forecast, but should establish a clear relationship between forecasts of demand, costs, generating capacity, and
emissions.
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incorporated. Jurisdictions can determine the most appropriate source for their electricity
demand forecast (to be used for the emissions baseline projection) by reviewing the forecast's
growth rates, policy assumptions and economic conditions. Keep in mind that if a group of
states uses electricity demand forecasts from different information sources, then any
inconsistencies between approaches and assumptions should be addressed.
Energy Information Administration's Demand Forecasts
The standard national baseline projection for the ECU sector comes from the Energy
Information Administration (EIA), which is the statistical arm of the U.S. Department of Energy
(DOE), and the projection is called the Annual Energy Outlook (AEO).3 It is published every year
and forecasts the future 25 years of U.S. energy demand, supply, and price. For its power
sector demand projections, EPA uses ElA's electricity demand forecast, likewise growth rates
for U.S. electricity demand forecasts, and underlying EE policy assumptions, can be found in
AEO.4 The EPA updates IPM platforms with the new AEO forecasts as they become available.
Energy supply and demand projections from the AEO are also used as growth indicators upon
which growth factors for fuel/combustion-related processes are based.
Projections included in the AEO forecast are generated from the National Energy Modeling
System (NEMS), which is a computer-based, energy-economy modeling system developed and
maintained by DOE. It projects the production, imports, conversion, consumption, and prices of
energy. These projections are subject to assumptions about macroeconomic and financial
factors, world energy markets, resource availability and costs, behavioral and technological
choice criteria, cost and performance characteristics of energy technologies, and demographics.
Regional or State Specific Electricity Demand Forecasts
State, tribal and local agencies can choose to use regional or state specific electricity demand
forecasts for their baseline emission projections. Many organizations have an electricity
demand forecast air agencies can use in the baseline emissions projections for SIPs; these
organizations include:
• North American Electric Reliability Corporation (NERC)
• Regional Transmission Organizations (e.g., PJM)
• Independent Service Operators (e.g., ISO NE, ISO NY)
• Electric system operators (e.g., a large power company that operates the electricity
system for a specific region)
• State energy agencies (e.g., State Energy Office or Public Utility Commission)
• Regional councils that develop energy planning (e.g., Northwest Power and
Conservation Council)
3 Most recent version as of the release of this document is AEO 2012.
The AEO serves as the basis for EPA's forecasts of future demand for electricity, which is an input to IPM. IPM
provides future estimates of EGU emissions. It is important to know which version of AEO EPA is using in a given
IPM run. There is a brief time lag between EPA's modeling platform update and the most recent AEO forecast
release. For more information, go to: http://www.eia.gov/forecasts/aeo/.
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Determining the most appropriate electricity demand forecast will be based on reviewing the
growth rates, policy assumptions, and economic conditions used in developing the forecast.
Keep in mind that if a group of states working jointly on SIP modeling analyses uses electricity
demand forecasts from different information sources, it will be important to reconcile any
inconsistencies between approaches and assumptions.
An organization's reason for developing a demand forecast may also influence which
information resource a state, tribal or local agency chooses. For example, the NERC demand
forecasts are developed from utility level forecasts provided to NERC as part of annual, long-
term reliability assessments. Available regional forecasts may be developed as a part of
regional transmission planning activities established by the Federal Energy Regulatory
Commission, which may also include separate scenarios incorporating alternative assumptions
about environmental regulations. State, tribal and local agencies should work closely with their
EPA regional office if their demand forecast information comes from one of these organizations
to ensure all environmental regulations are accounted for in the analysis.
Step 2: Document Energy Efficiency Policy Assumptions in Electric Generating
Unit Baseline Demand Projections
Energy Information Administration Energy Efficiency Policy Assumptions
The Energy Information Administration's AEO documentation includes descriptions of the
assumptions reflected in their modeling. For AEO 2010, EIA includes several EE/RE federal
policies and regulations that are "on the books" as of September 2009. The EE policies that are
explicitly in the AEO 2010 baseline projections5 are:
• Federal Appliance Standards6
o 10 Residential and 10 Commercial Appliance Categories
• Federal Funding for EE and Related Programs (e.g., through the American Recovery and
Reinvestment Act)7
o State Energy Program and Energy Efficiency Community Block Grant
o Weatherization Program
o Green Schools
o Smart Grid Expenditures
• Building Energy Codes8
o All states adopt and enforce:
• International Energy Conservation Code (IECC) 2006 (Residential Building
Code) by 2011
• IECC 2009 by 2018
• American Society of Heating, Refrigerating and Air-Conditioning
Engineers 90.1-2007 (Commercial Building Code) by 2018
5 For more information, go to: http://www.eia.doe.gov/oiaf/archive/aeolO/index.html.
6 EIA (2010), Appendix A, pp. 170-185.
7 EIA (2010), pp. 8-10.
8 EIA (2010), p. 8.
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Regional or State Specific Policy Assumptions
If a state, tribal or local agency is using a demand forecast that is an alternative to ElA's AEO,
then it is important to understand if and how the following EE policies are captured in, the
electricity demand forecast:
• EE policies or programs funded by utility ratepayers
• Existing federal appliance and lighting efficiency standards that are already in effect
• New federal appliance and lighting standards that are scheduled to take effect over the
forecast period
• State appliance or lighting efficiency standards (if applicable)
• State building energy codes
• CHP capacity additions
• Other distributed generation capacity additions
• Other applicable policies/programs (e.g., codified local policies)
There are at least two ways these policies can be captured in an existing demand forecast:
1) Explicitly model EE policies to show a direct connection between the EE policy and its
impacts on energy demand.
2) Fully or partially reflect the impacts of EE policies in a demand forecast indirectly,
through econometric or other assumptions in the model.
Step 3: Review "On the Books" Energy Efficiency Policies for Inclusion in the
Electric Generating Unit Baseline Demand Projections
Comparing "On the Books" Policies Against Energy Information Administration
Assumptions
If state, tribal and local agencies are using AEO 2010 demand forecast assumptions, EPA has
already identified "on the books" EE policies not explicitly incorporated into AEO 2010. To
estimate the energy savings of these policies, EPA accounted for impacts of existing state EE
policies that are embedded within ElA's load forecast (e.g., accounted for econometrically). By
taking this extra step, EPA avoided double counting the energy savings from existing EE policies
and programs.
The EPA is providing a methodology and energy savings information for future years through
2030 (see Appendix J) for the following EE policies:9
• Energy Efficiency Resource Standards
• EE programs funded by Public Benefits Funds
• EE programs funded by the Regional Greenhouse Gas Initiative10
9 For more details on the methodology and energy savings/generation information for the policies listed here, go
to Appendix J.
10 For more information, go to: http://www.rggi.org/.
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If states are using a different version of ElA's AEO, then state, tribal and local agencies should
review the EE assumptions with the respective AEO forecast to determine which policies could
be added.
Comparing "On the Books" Policies to State or Regional Forecast Assumptions
If a state, tribal or local agency does not use ElA's demand forecasts, then the jurisdiction
should talk with the organization providing the demand forecast to determine if additional "on
the books" state EE policies can be incorporated in their forecast.
Documentation Procedures
Energy efficiency policies represent just one of many assumptions made in ECU baseline
emissions projections. Any EE policies that are explicitly included in an ECU baseline projection
should include the following information:
• Policy name
• Whether the policy is codified in state or local rule
• Year enacted
• Last year of policy requirement
• Policy requirements (e.g., targets in megawatt hours (MWh) or percentage)
• Annual energy savings base year (MWh)
• Annual energy savings in the future attainment year (MWh)
Step 4: Project Electric Generating Unit Baseline Emissions for Attainment
Year(s) in the Future
Considerations for Choosing an Electric Generating Unit Baseline Emissions
Projection Method
The baseline emissions projection method is an important decision for state, tribal and local
agencies because having a consistent emissions quantification method for the ECU sector will
produce the most reliable results. However, agencies have the option to use the same or
different ECU emissions quantification approaches throughout the SIP process. If different ECU
emission quantification approaches are applied throughout the SIP process, the state, tribal and
local agency should explain the procedures taken to ensure that differences in methodologies
do not lead to inconsistencies in future ECU emissions results. (Refer to Appendix I for all
available emission quantification approaches.)
Perform Energy Modeling To Project Electric Generating Unit Baseline Emissions
Integrated Planning Model of Electric Generating Unit Baseline Emission Projections
The EPA uses IPM to simulate the power sector behavior and to analyze the impact of
environmental regulations.11 The emission outputs generated by EPA's modeling are average
seasonal emissions (ozone and non-ozone seasons) at the emission unit level and are
streamlined to be used as direct inputs into air quality models. Even where jurisdictions use the
11 For more information on detailed documentation of the latest publicly available versions of NEEDS and IPM, go
to: http://www.epa.gov/airmarkets/progsregs/epa-ipm/BaseCasev410.html.
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baseline emission projections generated by IPM, state, tribal and local agencies need not use
IPM in the SIP process. However, if a jurisdiction uses IPM in part for its ECU SIP analysis in
conjunction with an alternative method, then it is important for state, tribal and local agencies
to explain the procedures taken to help ensure consistent results.
Future Attainment Year Baseline Using Other Approaches
State, tribal and local agencies can develop their own SIP/TIP baseline emissions
growth/forecast for the electric power sector. If an agency chooses to develop its own baseline
emissions projections for SIP/TIP purposes, assumptions must be made to reflect:
1) Electricity demand and electricity supply,
2) ECU emission characteristics, and
3) How and when EGUs will operate in the future.
The projection of new generation does not need to be an independent forecast developed by
the state, tribal or local air agency, but can be derived from other available forecasts. When
other forecasts of generation capacity are used, document the assumptions in those forecasts
and how the assumptions relate to other assumptions of the baseline emission projection, such
as demand and emissions.
Refer to pages E-13 and E-14, of this appendix, for more details on the proper documentation
state, tribal and local agencies should provide when conducting an analysis with EE/RE policies
and programs.
Other appendices in this document describe the emission quantification approaches
jurisdictions can use for an alternative baseline emissions projection. Refer to Appendix I for
more information on emission quantification approaches. Appendix J provides information on
how state, tribal and local agencies can utilize estimates of energy savings and generation for
state "on the books" EE/RE policies.
SECTION E.4: STEPS FOR INCORPORATING "ON THE BOOKS" COMBINED
HEAT AND POWER POLICIES
This section describes the four steps state, tribal and local agencies should consider when
incorporating "on the books" CHP policies within the baseline.
• Step 1: Review CHP sources in baseline inventory and the relative emission rates for CHP
generation
• Step 2: Determine CHP policy assumptions in electric generating unit baseline
projections
• Step 3: Review "on the books" CHP policies to determine if more can be included in
electric generating unit baseline projections
• Step 4: Project electric generating unit baseline emissions for attainment year(s) in the
future
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Step 1: Review Combined Heat and Power Sources in Baseline Inventory and
the Relative Emission Rates for Combined Heat and Power Generation
The first step is to review the baseline inventory and assess if combined heat and power
facilities are already present in the inventory. The EPA recommends that agencies assume that
CHP facilities in baseline inventory will also have the same annual emission rates in the future
year inventory, unless the jurisdiction knows a facility is modifying or shutting down prior to the
future year inventory.
Step 2: Determine Combined Heat and Power Policy Assumptions in Electric
Generating Unit Baseline Projections
The EIA develops CHP capacity (MW) and net generation (MWh) projections in its AEO by fuel
type for the commercial and industrial sectors. The projections cover all size ranges, fuels and
applications appropriate for CHP. The projections are based on the economics of CHP based on
projected electricity and fuel prices and CHP system cost and performance. On-site CHP is then
reflected as a reduction in each sectors' purchased electricity demand profile in the AEO
projection. Incremental fuel and emissions at the site due to CHP are included in each sectors
fuel consumption and emissions projection. The CHP policy that is explicitly included in the
2010 AEO baseline projections12 is the Federal Investment Tax Credit, which is in place through
December 31, 2016 and provides a 10 percent tax credit for the first 15 MW on systems up to
50 MW in size.
Step 3: Review "On the Books" Combined Heat and Power Policies to
Determine if More can be Included in Electric Generating Unit Baseline
Projections
State, tribal and local agencies should examine if the information source for ECU projections
includes adopted state CHP policies. If agencies are using ElA's forecast assumptions, EPA has
identified "on the books" CHP policies already explicitly incorporated into AEO 2010, as
described above. The EPA is providing a methodology and energy information for future years
through 2020.13 State-level CHP policies that could potentially be included in the ECU baseline
include the following.
• State renewable or energy efficiency portfolio standards that include CHP
• Financial incentive programs for CHP and EE measures
Documentation Procedures
CHP policies are only a few of the many assumptions incorporated into an ECU baseline
projection. Any CHP policies that are explicitly included in an ECU baseline projection would
need to be documented with the following information:
• Policy name
• Whether the policy is codified in state or local rule
• Are the affects of the CHP policy already captured by another EE or RE policy?
12 For more information on AEO 2010, go to: http://www.eia.doe.gov/oiaf/archive/aeolO/index.html.
13 For more details on the methodology and energy savings/generation information, go to Appendix J.
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• Year enacted
• Last year of policy requirement
• Policy requirements (e.g., targets in MWh or percent)
• Annual energy savings base year (MWh)
• Annual energy savings in the future attainment year (MWh)
Step 4: Project Electric Generating Unit Baseline Emissions for Attainment
Year(s) in the Future
Step 4 is described above in Section E.3. It applies in all three sections - E.3, E.4 and E.5 -for
incorporating "on the books" energy efficiency policies, "on the books" combined heat and
power policies and "on the books" renewable energy policies, respectively.
SECTION E.5: STEPS FOR INCORPORATING "ON THE BOOKS"
RENEWABLE ENERGY POLICIES
This section describes the four steps state, tribal and local agencies should consider when
incorporating "on the books" RE policies within the baseline.
• Step 1: Review RE sources in baseline inventory and the relative emission factor for each
type of RE
• Step 2: Determine what RE policy assumptions are in electric generating unit baseline
supply projections
• Step 3: Review "on the books" RE policies to determine if more can be included in the
electric generating unit baseline supply projections
• Step 4: Project electric generating unit baseline emissions for attainment year(s) in the
future
Step 1: Review Renewable Energy Sources in Baseline Inventory and the
Relative Emission Factor for Each Type of Renewable Energy
The first step is to review the baseline inventory and assess if renewable energy facilities are
already present in the inventory. Renewable energy facilities can be defined in different ways;
some renewable energy definitions only include zero emitting facilities, while other definitions
include facilities that are low emitting facilities. Regardless of the definition, each RE facility
should be examined to determine the amount of annual emissions generated by each RE facility
in the base and future attainment year.
Step 2: Determine What Renewable Energy Policy Assumptions are in Electric
Generating Unit Baseline Supply Projections
The RE policies that are explicitly included in AEO 201014 baseline projections and EPA's ECU
projections are the Renewable Portfolio Standards (RPS)15 for 30 states (and Washington, D.C.)
that were adopted and effective as of September 2009. The EIA periodically updates the AEO
14 For more information on AEO 2010, go to: http://www.eia.doe.gov/oiaf/archive/aeolO/index.html.
15 EIA (2010), pp.14-17.
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forecasts and assumptions; therefore, jurisdictions should explain any new assumptions that
affect RE policy inclusions in the AEO forecast.
Step 3: Review "On the Books" Renewable Energy Policies to Determine if
More can be Included in the Electric Generating Unit Baseline Supply
Projections
States should examine if the information source for ECU supply projections includes all state RE
adopted policies. If states are using ElA's supply forecast assumptions, EPA has identified "on
the books" RE policies not already explicitly incorporated into AEO 2010. For RE, this includes
RPSs for 30 states (and Washington, D.C.) that were adopted and effective as of September
2009.16
The EPA is providing a methodology for estimating energy impacts of EE/RE policies and energy
information for future attainment years through 2020.17 If states are using a different version
of ElA's AEO, then state, tribal and local agencies should review the RE assumptions with the
AEO to determine which policies could be added.
Documentation Procedures
Renewable energy policies represent only one of the many assumptions incorporated into an
ECU baseline projection. Any RE policies that are explicitly included in an ECU baseline
projection should include the following information:
• Policy name
• Whether the policy is codified in state or local rule
• Year enacted
• Last year of policy requirement
• Policy requirements (e.g., targets in MWh or percent)
• Annual energy generation base year (MWh)
• Annual energy generation in the future attainment year (MWh)
If a state's RPS allows EGUs using fuels, (such as clean coal or biomass) that emit pollutants to
qualify as RE sources, then air quality planners need to account for the emissions associated
with the sources used to meet the RPS targets in the base and future attainment year.
Step 4: Project Electric Generating Unit Baseline Emissions for Attainment
Year(s) in the Future
Step 4 is described above in Section E.3. It applies in all three sections - E.3, E.4 and E.5 - for
incorporating "on the books" energy efficiency policies, "on the books" combined heat and
power policies and "on the books" renewable energy policies, respectively.
16 EIA (2010), pp.14-17.
17 For more details on the methodology and energy savings/generation information for the policies listed here, go
to Appendix J.
E-16
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REFERENCES
EIA (2010). Assumptions to the AEO 2010 With Projections to 2035. April 2010. Available online at
E-17
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United States Office of Air Quality Planning and Standards Publication No. EPA-456/D-12-001f
Environmental Protection Outreach and Information Division July 2012
Agency Research Triangle Park, NC
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