How Virginia Can Meet Its Clean Power Plan Targets
October 2015This fact sheet examines how Virginia can use its existing policies and infrastructure to meet its emission standards under the Clean Power Plan while minimizing compliance costs, ensuring reliability, and harnessing economic opportunities. Read about additional analyses in WRI's fact sheet series, How States Can Meet Their Clean Power Plan Targets.
Key Findings
Virginia’s planned coal retirements and planned investment in clean energy will achieve almost one-third of the reductions its power plants must make between 2012 and 2030 to meet its mass-based target. Virginia can close the gap that remains, and even surpass its mass-based target for existing plants, if it achieves its clean energy goals and increases utilization of its existing natural gas fleet:
Energy efficiency goal: Virginia currently has a voluntary goal to reduce electricity consumption by 10 percent below 2006 levels of consumption by 2022.
Renewable energy goal: Virginia’s investor-owned utilities may participate in the state’s voluntary renewable portfolio standard program. This program has a goal that by 2025, 15 percent of electricity sold (relative to 2007 sales) is from renewable sources.
Increasing use of the existing natural gas fleet: Combined cycle plants generated less electricity than they were capable of producing in 2012. Running existing plants (and those already under construction as of January 2014) at 75 percent of capacity could cut emissions further.
Virginia can develop an implementation plan that maximizes the economic benefits to the state and achieves emission reductions cost effectively by:
Adopting a market-based carbon pricing program, which encourages cost-effective emission cuts and generates revenue that can be used for public investments or reducing taxes. The CPP encourages states to trade credits without formally joining a trading program. Assuming a $10 per short ton price of interstate emissions allowances, Virginia could generate over $100 million in revenues per year on average between 2022–30 from out-of-state sources if it surpassed its CPP target by achieving its clean energy goals and increased its utilization of the state’s existing natural gas fleet.
Increased investment in energy efficiency: Virginia’s 2014 Energy Plan noted that robust energy efficiency policy could increase the state’s gross domestic product by $286 million and increase employment by 38,000 jobs by 2030.
Virginia has taken some steps to scale up renewable energy and energy efficiency, but a huge opportunity lies ahead to build on its progress and achieve deeper, cost-effective emissions reductions. If it takes advantage of available infrastructure and underutilized clean energy resources, Virginia will be in a good position to surpass EPA’s standards for its existing power plants while maintaining grid reliability. Adopting EPA’s new source complement standard would further incentivize zero-carbon generation sources and ensure that future CO2 emissions from the state’s power sector do not continue to increase. These types of actions could create a new revenue stream for the state, lead to increased investment, and would make Virginia a clean-energy leader.
On August 3, 2015, EPA finalized standards for existing power plants that will help drive additional CO2 emission reductions by 2030. EPA developed these state-specific standards by taking into account each state’s existing fossil fleet along with an estimate of the potential to increase the existing coal fleet’s efficiency, ramping down coal generation by increasing the utilization of the existing natural gas combined cycle fleet, and developing more renewable energy resources. The Clean Power Plan enables states to use a wide range of options to meet their standards, such as existing clean energy policies and electricity infrastructure (the focus of this analysis), other tools to cut electricity use and increase the use of renewables, and broader initiatives such as participation in a cap-and-trade program or use of a carbon tax.