Browsing by Subject "Dynamic Integrated Economy/Energy/Emissions Model"

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    Assessing Impacts of the Clean Power Plan on Southeast States
    (2015-05-15) Ross, Martin; Murray, Brian; Hoppock, David
    The proposed Clean Power Plan gives U.S. states flexibility in how they attain state-level carbon dioxide emissions rate goals from existing power plants. This analysis explores the potential impact of the proposed CPP on Southeast states across a range of compliance options relative to a baseline without the CPP. The analysis presents modeling results from the Dynamic Integrated Economy/Energy/Emissions Model for eight primary compliance scenarios involving rate-based or mass-based compliance, unilateral state action or regional cooperation, and inclusion or non-inclusion of natural gas combined cycle (NGCC) units as regulated entities under the CPP. Regarding electricity sector adjustments, the modeling shows that a rate-based approach initially decreases coal generation, encourages use of existing and construction of new NGCC units, and incentivizes renewable generation, although use of renewables is not cost-effective in the Southeast under baseline cost assumptions. By comparison, a mass-based approach initially increases coal generation and removes incentives for use of existing NGCC units while significantly increasing new NGCC generation. Including new NGCC units under CPP compliance shifts generation from those units to existing NGCC units under mass-based compliance and increases coal generation under rate-based compliance. Regarding policy costs, the modeling shows that individual state compliance costs vary considerably, that a mass-based approach initially entails half the costs of a rate-based approach, and that both regional rate-based and mass-based approaches create significant net cost savings over unilateral state compliance.
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    Ongoing Evolution of the Electricity Industry: Effects of Market Conditions and the Clean Power Plan on States
    (2016-07-27) Ross, Martin; Hoppock, David; Murray, Brian
    The electricity industry is evolving as changes in natural gas and coal prices, along with environmental regulations, dramatically shift the generation mix. Future trends in gas prices and costs of renewables are likely to continue moving the industry away from coal-fired generation and into lower-emitting sources such as natural gas and renewables. The U.S. Environmental Protection Agency’s Clean Power Plan (CPP) is likely to amplify these trends. The CPP rule regulates emissions from existing fossil generators and allows states to choose among an array of rate-based and mass-based goals. The analysis in this paper uses the electricity-dispatch component of the Nicholas Institute for Environmental Policy Solutions’ Dynamic Integrated Economy/Energy/Emissions Model to evaluate electricity industry trends and CPP impacts on the U.S. generation mix, emissions, and industry costs. Several coordinated approaches to the Clean Power Plan are considered, along with a range of uncoordinated “patchwork” choices by states. The model results indicate future industry trends are likely to make compliance with the Clean Power Plan relatively inexpensive; cost increases are likely to be on the order of 0.1% to 1.0%. Some external market conditions such as high gas prices could increase these costs, whereas low gas or renewables prices can achieve many of CPP goals without additional adjustments by the industry. However, policy costs can vary substantially across states, and may lead some of them to adopt a patchwork of policies that, although in their own best interests, could impose additional costs on neighboring states.
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    Structure of the Dynamic Integrated Economy/Energy/Emissions Model: Electricity Component, DIEM-Electricity
    (2014-12-08) Ross, Martin
    This paper, a companion to NI WP 14-12, describes the structure of, and data sources for, the electricity component of the Dynamic Integrated Economy/Energy/Emissions Model (DIEM), which was developed at the Nicholas Institute for Environmental Policy Solutions at Duke University. The DIEM model includes a macroeconomic, or computable general equilibrium (CGE), component and an electricity component that gives a detailed representation of U.S. regional electricity markets. The electricity model (DIEM-Electricity) discussed in thus paper can be run as a stand-alone model or can be linked to the DIEM-CGE macroeconomic model to incorporate feedbacks among economy-wide energy policies and electricity generation decisions and interactions between electricity-sector policies and the rest of the U.S and global economies. Broadly, DIEM-Electricity is a dynamic linear-programming model of U.S. wholesale electricity markets that represents intermediate- to long-run decisions about generation, capacity planning, and dispatch of units. It provides results for generation, capacity, investment, and retirement by type of plant. It also determines wholesale electricity prices, production costs, fuel use, and CO2 emissions. Currently, the model can consider, at a national policy level, renewable portfolio standards, clean energy standards, caps on electricity-sector CO2 emissions, and carbon taxes.
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    The Clean Power Plan: Implications of Three Compliance Decisions for U.S. States
    (2015-05-16) Ross, Martin; Murray, Brian; Hoppock, David