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Climate Change Hero

Climate Change Blog

  • 02
  • October
  • 2015

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Introduction to the Clean Power Plan’s Three “Building Blocks”

This is the first in a series of posts on the U.S. Environmental Protection Agency’s (“EPA”) Clean Power Plan, establishing emission guidelines for existing fossil fuel-fired electricity generating units (“EGUs”) under section 111(d) of the Clean Air Act (“CAA”). In particular, these posts will take a closer look at the three “building blocks” that form the basis for the CO2 emissions performance rates established in the final rule and how EPA uses those building-blocks to calculate the state-specific goals in the Clean Power Plan.

The Clean Power Plan establishes CO2 emissions performance rates that purportedly represent the best system of emissions reduction (“BSER”) for two subcategories of existing fossil fuel-fired EGUs—fossil fuel-fired electric utility steam generating units and stationary combustion turbines. Section 111 of the CAA requires standards of performance to be based on the BSER, which must account for a variety of factors, including the amount of reductions, costs, any non-air health and environmental impacts, energy requirements technical feasibility, and the advancement of technology. EPA determined the BSER for fossil fuel-fired EGUs through the application of three “building blocks.”

The three building blocks are:

  1. Improving heat rate at affected coal-fired steam EGUs.
  2. Substituting increased generation from lower-emitting existing natural gas combined cycle units for reduced generation from higher-emitting affected steam generating units.
  3. Substituting increased generation from new zero-emitting renewable energy generating capacity for reduced generation from affected fossil fuel-fired generating units.

In the posts that follow, we will provide a more in depth analysis of EPA’s formulation of and basis for each of the three building blocks, but in general, each building block encompasses a category of measures that could be implemented to reduce CO2 emissions from the electric generation sector. Building Block 1 contemplates heat rate improvements at coal-fired steam-generating units through application of both operational improvements and equipment upgrades, while Building Blocks 2 and 3 assume increases in low- or zero-emitting generation to substitute for generation from the affected EGUs.

EPA’s “building block” approach results in emission guidelines that are lower than what it actually expects any affected EGU to achieve because EPA chose to look at the system of electricity generation as a whole. While this approach may have serious legal vulnerabilities, the intention of this series of posts is to explain how EPA calculated the emissions reductions of each of the building blocks and used these building blocks to calculate both national and state-based goals. As we will describe in more detail in the coming posts, EPA relies on the three building block measures outlined above, but emphasizes that there are numerous other measures available to reduce CO2 emissions, and the Agency’s determination of BSER on the basis of these three building blocks does not necessitate their use by the states in developing state plans to implement the Clean Power Plan.

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Author

Margaret E. Peloso

Margaret E. Peloso Partner