Brattle Report: How State Policymakers Can Enable Canadian Clean Energy Imports

Posted by Lauren Tyler on July 01, 2016 No Comments
Categories : Policy Watch

Consultants at The Brattle Group have issued a report that provides technical guidance to U.S. state policymakers on how to enable clean energy imports from Canada for compliance with the U.S. Environmental Protection Agency’s (EPA) Clean Power Plan (CPP).

With approximately 83% of Canadian electricity produced by non-emitting resources in 2015, a number of U.S. states have expressed interest in facilitating clean energy imports from Canada to reduce carbon dioxide (CO2) emissions and achieve CPP compliance, the firm explains.

Prepared for a consortium of Canadian entities, the Brattle report is intended to inform state policymakers on how they can enable clean energy imports from Canada within their state implementation plans (SIP) and complementary policies on a comparable basis with other CO2-abatement options.

The report finds that mass-based plans – imposing a cap on total tons of CO2 emissions from affected generators – generally provide the most flexibility for states to incorporate clean energy imports. Under a mass-based plan, accounting for clean energy imports is straightforward: Clean energy imports need to displace domestic fossil-based generation and associated CO2 emissions.

In comparison, the report says, state policymakers implementing rate-based standards – imposing a pounds-per-megawatt-hour limit on the rate of CO2 emissions from covered generators – would need a more focused effort to ensure that the policy design does not inadvertently preclude participation of some types of clean Canadian resources.

The Brattle Group says only a subset of clean Canadian resources are eligible to create the emission rate credits (ERCs) needed to achieve compliance under rate-based standards. Because the EPA provided minimal guidance on how to qualify and verify ERCs, the report presents options on how to reach rate-based compliance in a state’s plan.

“Canada is rich with clean energy resources. Even beyond the Clean Power Plan, these resources could help the U.S. reduce CO2 emissions from its power sector and be valuable to utilities and states in meeting their clean energy goals,” says Brattle Principal Judy Chang, a co-author of the study. “We want this report to be useful for state air and environmental regulators, electricity regulators and elected state officials as they design their SIPs and related energy policies.”

The report also provides a set of recommendations for most effectively enabling clean Canadian imports regardless of the implementation approach chosen.

“Key to achieving our greenhouse-gas emission reduction goals in Canada and the U.S. is cleaning our shared electricity grid and using that non-emitting electricity to power other sectors,” notes Robert Hornung, president of the Canadian Wind Energy Association.

“In Canada, 65 percent of electricity generation comes from world-class and inexhaustible renewable energy sources. This includes wind energy, for which cost-competitiveness has made it the largest source of new electricity generation in Canada for the past five years. The Brattle report finds that the language in the Clean Power Plan provides minimal guidance on the actions U.S. states must take to ensure they create the conditions required to make use of clean energy imports from Canada within their state implementation plans and related energy policies,” he continues.

“The report, therefore, provides a technical guide and recommendations that will help U.S. state policymakers to enable the potential of Canadian clean electricity imports to help meet CPP standards and other state-level environmental policy goals.”

The report, “Enabling Canadian Electricity Imports for Clean Power Plan Compliance: Technical Guidance for U.S. State Policymakers,” is authored by Chang, Brattle Principal Kathleen Spees and Associate Pearl Donohoo-Vallett. It is available for download here.

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