Navigant Research Blog

How the EPA Proposes to Regulate Carbon with the Clean Power Plan

— May 6, 2015

The U.S. Supreme Court has upheld the Environmental Protection Agency’s (EPA’s) authority to regulate CO2 emissions on three occasions, most recently in 2014. However, its ability to regulate these emissions for existing sources, as enabled by Section 111(d) of the Clean Air Act, has faced some uncertainty regarding the separate interpretation of the U.S. House and Senate in the 1990 Clean Air Act (CAA) amendments. Under the House version, Section 111(d) would prohibit regulation of CO2 from existing sources already regulated under Section 112—which the EPA has done for existing electric generating units (EGUs) under the Mercury and Air Toxics Standards (MATS) rule—while under the Senate version, this conflict does not exist.

Recently, as preparations for the expected final rulemaking continue and legal challenges develop, the discussion has focused on just how Section 111(d) of the CAA may be employed by the EPA to regulate CO2 emissions. Though 111(d) has been used in 13 prior instances, precedent is minimal and its previous applications are of limited import to a proposed rule of this type. Furthermore, while many are familiar with the EPA’s long-standing regulation of hazardous and criteria air pollutants under the CAA, it is often less clear just what 111(d) is for, how it enables the EPA to act, and, most importantly, how it relates to the proposed CPP rule. Briefly, I’ll cover some of those basics here.

Existing Sources

Quite simply, Section 111(d) enables the EPA to regulate emissions from existing sources that produce emissions that threaten public health or welfare and are not otherwise regulated in the CAA. While a necessary endangerment finding for CO2 and other greenhouse gasses was first published in 2009, the EPA has not yet focused a rulemaking on existing sources until proposing the CPP. Beyond that, 111(d) affords the agency the same management strategy detailed in Section 110—e.g., directing states to develop implementation plans to meet national ambient air quality standards. Ultimately, the EPA may initiate a federal plan should a state choose not to develop its own.

Achievable and Demonstrated  

A key distinction in understanding the EPA’s authority under 111(d), as compared with regulating more traditional hazardous or criteria air pollutants, is that the agency must regulate CO2 emissions according to the “best strategy of emissions reductions (BSER)…adequately demonstrated”—a standard of performance the agency may define but that must explicitly consider cost and feasibility. Indeed, this BSER strategy is defined in the CPP as the building blocks, and the reasonability of these proposed strategies has been an ongoing theme during the EPA’s consultation with the states, a theme echoed in recent comments by EPA Administrator Gina McCarthy. As states begin to design potential compliance strategies and debate the reasonability of EPA’s BSER proposition, the design of the CPP and the EPA’s ability to regulate existing plants under Section 111(d) are questions likely to be addressed in the courts following the release of the EPA’s final rulemaking expected later this summer.


Major Shifts Ahead for European Power Generation

— May 4, 2015

Across Europe, major changes in the power generation sector are driving the development, expansion, and deployment of new and reconfigured electric transmission and distribution systems. The forces driving these changes include the retirement of much of the existing coal and nuclear generation fleet, the European Union’s energy policy goals, concerns over security of supply, climate change mitigation efforts, and the ongoing integration of distributed energy resources (DER) across the region. Power peak load is expected to grow between 8% and 28% by 2030, according to the Ten-Year Network Development Plan produced by the European Network of Transmission System Operators for Electricity, or ENTSO-E.

The net generation capacity of the European power sector must grow from about 1,000 GW today to between 1,200 GW and 1,700 GW by 2030 in order to keep up with demand, according to the Plan. To accomplish this massive increase, the generation fleet must not only add new capacity, but also replace present units that will be retired in the next 15 years. This represents a 3%4.6%  expansion per year across all potential resources.

Age of Wind

Looking to 2030, the generation fleet in Europe will morph in a number of significant ways, including:

  • Major nuclear generation plant retirements will happen across the region, including those in Germany, Belgium, and Switzerland. All present nuclear units in the United Kingdom are scheduled to be shut down, and France plans to reduce the share of nuclear to 50% of the country’s power supply by 2025. This adds up to a net 30 GW and 45 GW of nuclear capacity being shut down. At the same time, 20–30 GW of new nuclear capacity is expected to be added. New plants may be added in the United Kingdom, Finland, and Central Europe.
  • New generation additions will occur in new locations. Wind farm development will be located where wind speeds are optimal; a significant share of the new generation fleet in Western Europe is being built on new sites, mostly in harbors.
  • The shutdown of nuclear and fossil-fired units across Germany will require additional grid investment necessary to transport remote power to population centers.
  • New generation capacity will primarily be made up of distributed wind and solar systems. The generation capacity of wind, solar, and biomass is expected to reach at least 405 GW and could triple, reaching more than 870 GW by 2030.
  • DER will be located in Germany and in countries with favorable wind conditions, such as the Iberian and Italian peninsulas and Nordic countries bordering the North Sea.
  • New hydropower capacity is expected to increase from 198 GW to between 220 GW and 240 GW, with most new development in the Alps, the Iberian Peninsula, and Norway.

These major generation shifts will be the primary drivers for investments in high-voltage transmission systems across the region. Navigant Research’s forthcoming report, Submarine Cable and High Voltage DC, will detail many of these changes and additions, which promise to transform Europe’s power sector.



In Europe, Renewables Drive Big Transmission Projects

— May 4, 2015

The European Network of Transmission System Operators for Electricity, or ENTSO-E, has released its Ten-Year Network Development Plan (TYNDP 2014) on the state of the European transmission system. The report details a huge number of new projects to be completed between 2015 and 2030, driven by large-scale wind power developments in the Nordic countries and the North Sea, along with the reconfiguration of the existing high-voltage alternating current (HVAC) transmission system required to address the problems caused by the large-scale retirement of nuclear plants across Northern Europe in the coming years. This year’s report describes a number of new projects that were not part of the TYNDP 2012, including large high-voltage direct current (HVDC) and submarine cable projects linking Northern Europe with the Nordic countries.

Data from ENTSO-E illustrates the spread of HVDC and submarine cable DC and AC deployments, which are now on parity or are moving ahead of traditional overhead HVAC transmission systems. Planned HVDC cable and submarine HVAC cable projects each represent almost 18,000 kilometers of new line over the next 15 years.

Super Connector

ABB’s recently announced $900 million HVDC and submarine cable project, called NordLink, will be Europe’s longest HVDC power grid interconnection. Enabling the transmission of 1,400 MW of renewable energy, NordLink will represent the first interconnection between the Norwegian and German power grids and will bring together a consortium of major utilities in each country, including Statnett and TenneT supplying onshore HVDC converter stations. Nexans will supply the submarine cable. The epic nature of this project is illustrated by its size: it will be 387 miles long, making it the longest HVDC and submarine cable connection in Europe. It is scheduled to go into commercial operation in 2020.

NordLink will be key to creating an integrated European Union energy market, increasing energy security in the region, and supporting the integration of renewable energy into national grids. The project facilitates the transmission of surplus wind and solar power produced in Germany to Norway and hydroelectric power to be moved in the opposite direction. The link will transmit enough electricity to supply 3.6 million German households.

Navigant Research’s forthcoming report, Submarine Cable and High Voltage DC, will include 10-year market forecasts and summaries of major planned submarine projects across North America, Europe, Asia Pacific, and the rest of the world. ENTSO-E’s TYNDP demonstrates that this market is about to expand rapidly, driven by utility-scale renewable power projects and the retirements of aging coal and nuclear power plants.


Crowd Data Drives New Mobility Technology

— May 4, 2015

City planners and traffic management agencies are avid consumers of data, which is critical to both planning and managing transportation services. Traditionally, government agencies relied primarily on data from loop detectors installed in streets and highway. These sensors tell transportation officials how many cars pass by the sensors, allowing them to understand the volume of traffic on the roadways they manage. This then feeds into infrastructure plans, as cities understand where the heaviest demand is and where the pinch points are in the roadways.

This data is also used to report when traffic has stopped in the roadway, which is used for traveler information systems. What these sensors cannot tell you is where the traffic came from, where it ended up, or even how fast it’s traveling. And these sensors are not cheap. It’s a significant investment to install them in existing roadways, and even building then into new roadways is costly, given that the sensors must be highly robust and maintained throughout the year in challenging conditions.

Listen to the Crowd

Crowdsourced data, gathered from GPS navigation devices, cellphone records, or mobile apps, is becoming an increasingly viable way for cities and transportation agencies to acquire data without expensive infrastructure projects. And these crowdsourced data sources can supply new data points that help cities get a much more complete view of mobility, like pedestrian and bicycle traffic and parking usage.

Traffic data company INRIX has been incorporating data from a variety of sources to supplement its own vehicle probe data for years. The company aggregates data from GPS navigators and mobile phones in vehicles to provide a more complete picture of the traffic landscape in real time. AirSage utilizes cellular phone data for its traffic data offerings. Through partnerships with Sprint and Verizon, AirSage receives anonymized real-time data from cellular phone activity which the company provides to transportation planners and transit planners. AirSage provides origin and destination data, as well as speeds.

Cellular based traveler data also enables traffic managers and planners to see the movement of pedestrians and cyclists, as well as motorized vehicles Still, there are limitations: namely, that AirSage cannot tell what type of motor vehicle it is tracking.

We Know Where You’ve Been

But the most interesting new crowdsourcing data potential is from companies that aren’t even in the data aggregation business. Just as Google and Facebook have found data to be their most valuable assets,  app providers like Uber and Strava, are discovering the potential value in the data they amass.

Earlier this year, Uber announced it would offer its data to cities, with the Boston the first recipient. Uber is offering this as a free service, likely in part as an effort to present a kinder, gentler image after a recent spate of negative press. Uber has also partnered with the Starwood Preferred Guest program. Program members can receive reward points for using Uber; customers who opt-in to Uber’s Starwood point program agree to giveStarwood access to their Uber activity.

This sort of data exchange has huge revenue potential for Uber, as it’s easy to imagine how many businesses would be interested in tracking the travel habits of Uber users. trava, a company that allows runners and cyclists to log and share data on their athletic activity has also found a way to turn its data into revenue. The Oregon Department of Transportation (DOT) is buying Strava’s data to better understand the routes used by cyclists. This is another way for cities and states to fill out their picture of mobility and provide better services for their residents.  The potential for crowdsourced data is huge, and we expect to see more partnerships like these develop as transportation planners begin to grasp the full potential of crowdsourced data. You can also expect renewed privacy concerns, especially when the data comes from users who are not fully aware that they are opting in to share their data when they download an app.


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