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A national laboratory of the U.S. Department of Energy
Office of Energy Efficiency & Renewable Energy
National Renewable Energy Laboratory
Innovation for Our Energy Future
Subcontract Report
Wind Energy and Air Emission NREL/SR-500-42616
Reduction Benefits: A Primer February 2008
D. Jacobson
D.J. Consulting LLC
McLean, Virginia
C. High
Resource Systems Group Inc.
White River Junction, Vermont
NREL is operated by Midwest Research Institute ● Battelle Contract No. DE-AC36-99-GO10337
Subcontract Report
Wind Energy and Air Emission NREL/SR-500-42616
Reduction Benefits: A Primer February 2008
D. Jacobson
D.J. Consulting LLC
McLean, Virginia
C. High
Resource Systems Group Inc.
White River Junction, Vermont
NREL Technical Monitor: Lori Bird
Prepared under Subcontract No. LAM-7-77553-01
Period of Performance: August 1, 2007 — December 31, 2007
National Renewable Energy Laboratory
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Operated for the U.S. Department of Energy
Office of Energy Efficiency and Renewable Energy
by Midwest Research Institute • Battelle
Contract No. DE-AC36-99-GO10337
NOTICE
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Acknowledgements
The authors wish to acknowledge the support that made this report possible. The U.S.
Department of Energy’s Wind Powering America Program funded this report. Lori Bird, Laura
Vimmerstedt, and Larry Flowers of the National Renewable Energy Laboratory (NREL)
provided overall guidance and detailed comments. Andrew Vanderjack of The George
Washington University Law School provided valuable research assistance.
In addition, we greatly appreciate the input of the following individuals, who provided comments
during the review process: Amy Royden-Bloom of the National Association of Clean Air
Agencies; Pam Mendelson of Navarro Research and Engineering; Tom Rawls of THR
Associates, LLC; Elizabeth Salerno of the American Wind Energy Association; and Paul
Denholm and Michael Milligan of NREL.
Although we appreciate all contributions, the authors retain full responsibility for the content of
the report.
1
Table of Contents
ACKNOWLEDGEMENTS _______________________________________________ 1
EXECUTIVE SUMMARY ________________________________________________ 4
WIND ENERGY AND AIR EMISSION REDUCTION BENEFITS _________________ 6
Introduction ________________________________________________________________________________6
Zero-Emissions Wind Energy Versus Emissions from Fossil Fuel-Fired Generation _____________________6
Major Contribution of Electric Power Plant Emissions to Air Pollution and Climate Change _____________8
Wind Energy Displaces Emissions from Fossil Fuel-Fired Power Plants _______________________________9
Methodologies for Analysis of Avoided Emissions_________________________________________________11
Wind Energy Can Reduce Overall Emissions, Even Under Emissions Trading Programs________________12
State Air Quality Plans Can Recognize Air Emission Reductions Resulting from Wind Energy ___________16
Wind Energy Helps to Meet Emission Caps by Reducing Pollution Control Compliance Costs ___________17
Misperceptions about Backup Generation _______________________________________________________18
Conclusion _________________________________________________________________________________18
APPENDICES _______________________________________________________ 19
Appendix A: List of References________________________________________________________________19
Appendix B: Energy Generation and Air Emissions Terminology ___________________________________25
Appendix C: Air Quality Nonattainment and State Implementation Plans: The Basics __________________27
Appendix D: Emissions Trading (Cap and Trade) Background _____________________________________29
Appendix E: Allowance Allocation to Wind Energy under the Clean Air Interstate Rule ________________31
Appendix F: Avoided Emission Rates___________________________________________________________38
2
Table of Figures
Figure 1: Contribution of fossil fuel-fired electric power generation to total air emissions in the
United States. _________________________________________________________ 8
Figure 2: Air quality nonattainment areas in the United States. __________________________ 9
Figure 3: States covered by the U.S. EPA Clean Air Interstate Rule. ____________________ 30
Table of Tables
Table 1: Summary of the Health and Environmental Effects of Air Emissions from Fossil Fuel-
Fired Power Plants in the United States_____________________________________ 7
Table 2: State Allocation of Nitrogen Oxide Allowances to Energy Efficiency and Renewable
Energy (EE/RE) Under Clean Air Interstate Rule ____________________________ 32
Table 3: Details of State Energy Efficiency and Renewable Energy (EE/RE) Set-Asides for
NOx Allowances Under Clean Air Interstate Rule ___________________________ 33
Table 4: Examples of Avoided Emission Rates for Wind Power in Selected U.S. Regions ___ 38
Table 5: Variation in Fossil Fuel Air Emissions Rates for Major U.S. Electric Power Generating
Companies __________________________________________________________ 40
3
Executive Summary
This document provides a summary of the impact of wind energy development on various air
pollutants for a general audience. The core document addresses the key facts relating to the
analysis of emission reductions from wind energy development. It is intended for use by a wide
variety of parties with an interest in this issue, ranging from state environmental officials to
renewable energy stakeholders. The appendices provide basic background information for the
general reader, as well as detailed information for those seeking a more in-depth discussion of
various topics.
Zero-Emissions Wind Energy Versus Emissions from Fossil Fuel-Fired Generation: One of
the obvious benefits of wind energy is that the production of electricity from this source involves
zero direct emissions of air pollutants. In contrast, fossil fuel-fired electric generation from coal,
oil, or natural gas results in substantial direct emissions of numerous air pollutants that have
adverse impacts on public health and the environment.
Electric generation from fossil fuel-fired power plants is a leading source of air emissions that
harm human health and contribute to global climate change – resulting in 39% of carbon dioxide
(CO2) emissions, 22% of nitrogen oxide (NOx) emissions, 69% of sulfur dioxide (SO2)
emissions, and 40% of mercury emissions in the United States. Other pollutants include volatile
organic compounds (e.g., benzene, dioxins) and heavy metals (e.g., arsenic, lead).
Health experts have documented that pollutants from fossil fueled power plants, particularly coal
plants, result in a wide range of serious health effects. These adverse health effects include lung
cancer and other respiratory diseases (e.g., asthma), other carcinogenic effects, neurotoxic
effects, and elevation of heart disease risks.
Wind Energy Displaces Emissions from Fossil Fuel-Fired Power Plants: Wind energy
generation results in reductions in air emissions because of the way the electric power system
works. Wind energy is a preferred power source on an economic basis because the operating
costs to run the turbines are very low and there are no fuel costs. Thus, when the wind turbines
produce power, this power source will displace generation at fossil fueled plants, which have
higher operating and fuel costs.
The specific types of fossil fuel-fired power units that will be displaced by wind generation vary
significantly among states and regions. Some states and regions rely on coal plants for a majority
of their generation (e.g., West Virginia), whereas other regions and states rely heavily on natural
gas-fired units (e.g., most of New England). The displaced emissions of CO2, NOx, SO2, and
mercury generally will be greater in areas with large amounts of coal-fired generation and lower
in areas where natural gas is the dominant fuel. The emissions level is also influenced by the age
of the fossil fuel-fired units, as well as their relative levels of efficiency and pollution control.
Methodologies for Analysis of Avoided Emissions: There are a variety of recognized methods
to measure the amount of air emission reductions that result when fossil fuel-fired electric
generating plants are displaced by wind power. Different methods may be most appropriate
depending on the analysis goal. Although there are variations in methodologies, the process
involves several major steps: (1) specifying the appropriate geographic areas where the avoided
emissions occur; (2) identifying the fossil fuel-fired electric generation that is displaced when
4
wind plants come online; and (3) determining the emission rates for the fossil fuel-fired
generation that is displaced in the specific time periods that wind generation is occurring. In
addition, analysis of displaced emissions may focus on the effects of avoided emissions from
current units operating at the margin and the effects of avoided emissions from the future
construction of new fossil fuel-fired units.
Wind Energy Can Reduce Overall Emissions Even Under Emissions Trading Programs:
The impact of wind generation on overall emissions is more complicated for pollutants —
including NOx and SO2 — that currently are subject to emissions trading (cap and trade)
programs. In such cases, it is not sufficient to simply analyze the physical operation of the
electric system. Rather, it is also necessary to review the specific rules governing the emissions
trading program to determine if overall emissions will be reduced below the level of the cap.
Moreover, many pollutants that pose serious adverse health and environmental impacts, such as
CO2, fine particulate matter, volatile organic compounds (i.e., dioxins), and trace heavy metals
are not currently subject to emissions trading requirements. Emissions of these pollutants also
may be reduced when fossil fuel generation is backed down by wind generation.
State Air Quality Plans Can Recognize Emission Reductions Resulting from Wind Energy:
In recent years, the U.S. Environmental Protection Agency (EPA) has formally recognized that
wind energy purchases — combined with the retirement of a commensurate amount of emissions
allowances by a wind developer or the state — can qualify for emissions reduction credit in a
state air quality plan under specified circumstances. Since 2005, several states and municipalities
have followed this guidance, and they have relied on wind purchase commitments in their SIPs
in conjunction with the retirement of allowances to demonstrate a reduction in NOx emissions.
Wind Energy Helps to Meet Emission Caps by Reducing Pollution Control Compliance
Costs: Even for projects in which wind energy does not reduce total air emissions below the
level of general emission caps, the increased use of wind energy contributes to efforts to meet
such caps. When wind energy comes online, it generally reduces the amount of energy that must
be generated from fossil fuel-fired generators, thereby reducing emissions from such facilities
and lowering the costs faced by the owners of those facilities in complying with pollution control
requirements. These reduced pollution control costs will facilitate compliance with emission
reduction goals for both greenhouse gases and conventional pollutants.
Misperceptions about Backup Generation: One of the misperceptions about wind power
generation is that the air emission reduction benefits are extremely limited because of the need to
construct significant additional backup fossil fuel generation. With increased experience in
integrating wind generation and balancing various sources of electric power over a large power
control area, utility grid operators have learned how to reduce variability and limit reserve additions
to modest requirements when wind generation is brought online. This operational experience has
been demonstrated most clearly at moderate levels of wind penetration of up to 10% to 20%.
Conclusion: In summary, wind energy can be cited for several important air emission reduction
benefits. It contributes to the reduction of emissions of various harmful air pollutants, has played
a role in improving regional air quality, and has supported efforts to meet emission caps in a
cost-effective manner.
5
Wind Energy and Air Emission Reduction Benefits
Introduction
In recent years, increasing attention has been focused on understanding and quantifying the
impact of wind energy development on various air pollutants. The focus on this issue has
intensified as public concern about global climate change has heightened and the contribution to
greenhouse gas emissions from fossil fuels to this critical problem has been recognized.
For example, wind energy’s air emission reduction benefits have been a source of some
confusion in state proceedings to site wind turbines. As utility commissions, environmental
agencies, and other stakeholders assess the environmental impacts of wind energy, air emission
reductions have become an important part of the evaluation.
This document provides a description of the impact of wind energy development on air
emissions. The core document is intended for use by a variety of parties with an interest in this
issue, such as state energy and environmental agencies, county and municipal officials,
environmental organizations, and the renewable energy community. The appendices provide full
references, as well as detailed information for those seeking a more in-depth discussion of
selected topics.
One of the obvious benefits of wind energy is that producing electricity from wind produces zero
direct emissions of air pollutants. In contrast, fossil fuel-fired electric generation from coal, oil,
or natural gas results in substantial direct emissions of numerous air pollutants that have adverse
impacts on public health and the environment. The generation of wind energy also displaces
generation from individual fossil fuel-fired power plants or units – thereby reducing fuel
consumption and the resulting air emissions that would have otherwise occurred.
It should be noted that all forms of energy development — from coal and nuclear generation to
wind generation — have positive and negative environmental impacts. However, the focus of
this document is limited to air emissions, and it is not designed to provide a comprehensive life-
cycle analysis of the full range of environmental effects of the various forms of electric
generation.
Zero-Emissions Wind Energy Versus Emissions from Fossil Fuel-Fired
Generation
Wind energy produces zero direct air emissions in the generation process. Wind energy nearly
always displaces fossil fuel-fired generation that has direct air emissions of pollutants that
adversely impact public health and the environment. As a result of these environmental
differences, there generally are air quality benefits when wind generation reduces fossil fuel
combustion at existing power plants or reduces the need to build and operate new fossil fueled
power plants.
The principal air emissions from fossil fuel-fired electric power plants and their major health and
environmental effects are described in Table 1.
6
Table 1: Summary of the Health and Environmental Effects of Air Emissions from Fossil Fuel-Fired
Power Plants in the United States*
Air Pollutant Fossil Fuel Health & Environmental Other Considerations
Sources Impacts
Sulfur Dioxide Produced by Exacerbates heart disease and A major contributor to acid
(SO2) combustion of sulfur chronic lung disease, especially rain, particulate matter, and
in coal- and oil-fired in children, older adults, and regional haze
plants asthmatics
Nitrogen Oxides Produced during At high concentrations, can Precursor to ground-level
(NOx) combustion by the cause adverse respiratory effects ozone that is formed by
oxidation of nitrogen in children and adults photochemical reactions with
in coal, oil, and VOCs. Ozone is a lung irritant
natural gas and the that affects people with
oxidation of nitrogen respiratory diseases, including
in the air asthma, especially during
outdoor exercise. Also a
contributor to the formation of
particulate matter
Particulate Produced by Can cause or aggravate heart or Can be transported long
Matter combustion of fossil lung diseases. Causes regional distances and acts as a carrier
(PM10 and fuels and by reactions haze and visibility problems for toxic substances, including
PM2.5) of SO2 and NOx trace heavy metals
Mercury Emitted during coal Primary exposure is from eating Mercury is transferred from the
(Hg) combustion fish high in mercury air to water bodies where it
compounds. Fetal exposure may accumulates in the food chain
lead to neurobehavioral and
learning problems
Volatile Organic Produced during VOCs include polynuclear VOCs react with NOx to form
Compounds combustion from aromatic hydrocarbons, dioxins, ground-level ozone in the
(VOCs) hydrocarbons, furans, formaldehyde, and lower atmosphere ( See NOx
principally in coal- benzene. These are human above )
and oil-fired plants carcinogens and toxins
Trace Heavy Emitted during Trace heavy metals include Trace heavy metals are
Metals combustion in coal- arsenic, cadmium, lead, transferred to water bodies
and oil-fired plants antimony, manganese, nickel, where they accumulate in the
beryllium, cobalt, chromium, food chain
and selenium. These are human
carcinogens and/or toxins
Carbon Dioxide Produced during Carbon dioxide is the principal Combustion of fossil fuels also
(CO2) combustion by the greenhouse gas causing global contributes to emissions of
oxidation of carbon warming other greenhouse gases:
in coal, oil, and methane (CH4) and nitrous
natural gas oxide (N2O)
*
Emissions references are from the U.S. Environmental Protection Agency, Compilation of Air Pollution Emissions
Factors (AP42), Chapter 1.1, updated 2007. The air emission health effects descriptions are based on U.S. EPA, Air
Quality Index: A Guide to Air Quality and Your Health, EPA-454/K-03-002, 2003. The description of the mercury
health impacts is based on U.S. EPA, Clean Air Mercury Rule: Basic Information, 2004.
7
Major Contribution of Electric Power Plant Emissions to Air Pollution and Climate
Change
Electric generation from fossil fuel-fired power plants is one of the major sources of air
emissions that harm human health and the environment and contribute to global climate change.
Carbon Dioxide 39%
Mercury 40%
Nitrogen Oxides 22%
Sulfur Dioxide 69%
0% 10% 20% 30% 40% 50% 60% 70% 80%
% of Total US Emissions
Figure 1: Contribution of fossil fuel-fired electric power generation to total air emissions in the
1
United States.
Fossil fuel-fired power plants, especially coal-fired electric generation, are the largest source of
sulfur dioxide emissions, and as a result, fossil fuel-fired electricity is the principal cause of acid
precipitation in the Eastern states. In addition, both sulfur dioxide and nitrogen oxide emissions
are major contributors to fine particulate pollution and regional haze.
Combustion from coal-fired power plants also is the largest source of mercury emissions in the
country, and air emissions from coal plants in the United States and other countries are a primary
cause of mercury deposition into water bodies. This mercury pollution accumulates in the food
chain and results in dangerous concentrations of mercury compounds in freshwater fish used for
human consumption. 2
In addition, fossil fuel-fired electricity is a major source of nitrogen oxides. On a national basis,
electric power plants are approximately co-equal as the major source of nitrogen oxides, along
1
Miller, P.J.; Van Atten, C. North American Power Plant Emissions, Commission on Environmental Cooperation in
North America, 2005 (Table 1.1 based on 2002 data).
2
U.S. Environmental Protection Agency, Clean Air Mercury Rule: Basic Information; Letter from Jon Mueller,
Chesapeake Bay Foundation, to Mary Major, Virginia Department of Environmental Quality, Concerning the
Virginia Clean Air Mercury Rule, November 4, 2005.
8
with mobile sources, including cars and trucks. Moreover, in some regions of the country, the
transport of ozone from outside the region 3 contributes to an even greater share of the problem
than do local mobile sources. 4
Air emissions from fossil fuel-fired power plant generation are a major cause of unhealthy air
because NOx and SO2 are major contributors to the formation of two dangerous pollutants:
ground-level ozone (smog) and fine particulate matter (soot). 5 As of August 2007, 368 counties
(or parts of counties) in the United States failed to meet the national air quality standards for
ground-level ozone (8-hour ozone standard) or fine particulate matter (PM 2.5). 6 A map of air
quality nonattainment areas is shown in Figure 2.
7
Figure 2: Air quality nonattainment areas in the United States.
For more detail on air quality nonattainment, see Appendix C.
Wind Energy Displaces Emissions from Fossil Fuel-Fired Power Plants
Wind energy generation results in reductions in air emissions because of the way the electric
power system works. Wind energy is a preferred power source on an economic basis because the
3
This transport of ozone is formed from NOx emissions from outside the region coming from fossil-fuel-fired power
plants and other sources of NOx, as well as VOCs.
4
Maryland Department of Environment, The Basic Science of Air Pollution Transport, July 2005.
5
U.S. Environmental Protection Agency, Preamble to the Clean Air Interstate Rule, 70 Fed. Reg. 25162 et seq.
(May 12, 2005).
6
U.S. Environmental Protection Agency, Green Book, August 2007.
7
U.S. Environmental Protection Agency, Green Book, October 2007.
9
operating costs to run the turbines are very low 8 because there are no fuel costs. Thus, when the
wind turbines produce power, electricity supplies from other sources will be reduced or not
brought online. 9 Almost always, the most expensive power will be “backed down” or avoided. 10
Typically, wind power will displace generation at individual fossil fuel-fired power plants, which
have higher operating costs and substantial fuel costs.
At the same time, wind energy generation almost never displaces nuclear power on the electric
grid. Nuclear power plants are normally operated as baseload generators that run at full capacity
because they have such low operating costs.
In addition, wind energy generally does not reduce hydroelectric energy on the grid because of
its low operating costs and flow constraints. Although hydroelectric generation may be shifted in
time as a result of wind generation, total generation at such hydroelectric plants is generally not
reduced on average. The operating schedule of hydroelectric plants also may be limited by
environmental constraints.
Variations by State, Region, and Fuel Type
The specific types of fossil fuel-fired power units that will be displaced by wind generation vary
significantly among states and regions of the country. Some states and regions rely on coal
plants for a majority of their generation (e.g., West Virginia, Pennsylvania, and other parts of the
PJM power market, and parts of the Midwest and the South), whereas other states and regions
rely more heavily on natural gas-fired units (e.g., most of New England, New York, and
California). 11 For example, according to the chief operating officer of the PJM Regional
Transmission Organization, wind energy displaced coal-fired generation about 70% of the time
in this power market in 2006. 12 This result occurs because coal plants provide not only baseload
power but also intermediate and peakload power during certain hours and seasons of the year. 13
Even in New England, where natural gas is typically the marginal fuel, wind energy backs down
some generating units fired by coal and residual oil at certain times. 14
The displaced emissions of CO2, NOx, SO2, and mercury generally will be greater in areas with
large amounts of coal-fired generation and lower in areas where natural gas is the dominant or
load-following fuel. (See Appendix F for a discussion of emission rates for selected regions).
8
Interview with Karl Pfirrmann, Interim President and CEO of PJM Interconnection, PJM and Wind, E-Cubed
Publication of Penn Future, December 5, 2007.
9
Ibid.
10
Ibid.
11
U.S. Environmental Protection Agency, Emissions & Generation Resource Integrated Database (eGRID), 2005.
12
Interview with Karl Pfirrmann, Interim President and CEO of PJM Interconnection, PJM and Wind, E-Cubed
Publication of Penn Future, December 5, 2007.
13
U.S. Environmental Protection Agency, Emissions & Generation Resource Integrated Database (eGRID), 2005.
Once a coal plant is running, the operator can easily increase the amount of fuel that is fired in the boiler, thereby
increasing the amount of electricity produced. For example, a large coal-fired plant often provides baseload power
in the middle of the night, and then ramps up to intermediate capacity on a summer morning and to peakload power
in the afternoon on a hot summer day. Coal plants provide intermediate and peakload power in the markets where
such plants are available because of the very high cost of natural gas and residual fuel oil.
14
Independent System Operator New England, 2004 New England Marginal Emission Rate Analysis, 2005.
10
The level of emissions reduction is influenced by the age of the fossil fuel-fired units, their
relative levels of energy efficiency, the fuel characteristics (such as sulfur content of the coal),
and their relative levels of pollution controls. For example, a new high-efficiency combined-
cycle natural gas-fired plant with good pollution controls — typical of natural gas plants
constructed in the past 15 years — will have relatively low emission rates for all of the major air
pollutants. The typical NOx emission rate for such plants would be less than 0.1 pounds per
megawatt-hour (lbs/MWh), 15 and the CO2 emission rates are reduced substantially because of the
high electric generation efficiency of such plants. In comparison, older natural gas-fired plants
that are inefficient and have limited pollution controls may have NOx emission rates of 7 to 8
lbs/MWh. 16 (See Appendix B for background on the terminology used in discussing emission
rates.)
In the United States, the fleet of coal plants includes many older coal plants that are inefficient
and have limited pollution controls. 17 Such plants have NOx emissions that may exceed 8
lbs/MWh and also have high levels of CO2 emissions. In comparison, modern coal plants with
state-of-the-art pollution controls will have much lower emission rates for NOx, SO2, and
particulate matter. For example, NOx emission rates for these modern plants are typically less
than 0.1 lbs/MWh.18 However, the CO2 emission rates are not affected by pollution controls for
NOx and SO2. (See Appendix G for additional detailed information on emission rates of fossil
fueled plants).
Methodologies for Analysis of Avoided Emissions
There are a variety of recognized methods to measure the amount of air emission reductions that
result when the output of conventional electric generating plants is reduced by wind power. 19
Expert commentators have stated that different methods may be most appropriate depending on
the goal of the analysis. 20
Some documents providing guidance on calculating avoided emissions have focused on the
analysis of specific pollutants. For example, EPA has issued a specific guidance document
concerning the analysis of avoided NOx emissions, 21 and the World Resources Institute and the
15
Ibid., U.S. Environmental Protection Agency, Compilation of Air Pollution Control Factors (AP42), updated
2007.
16
U.S. Environmental Protection Agency, Emissions & Generation Resource Integrated Database (eGRID), 2005.
This emission rate is for grid-connected plants that are dispatched regularly. It should be noted that small diesel
electric generators (typically used to meet emergencies and extreme peak loads) can have much higher NOx
emission rates than 7 to 8 lbs/MWh.
17
Ibid.
18
Ibid.
19
World Business Council for Sustainable Development and World Resources Institute, The Greenhouse Gas
Protocol - Guidelines for Quantifying GHG Reductions from Grid-Connected Electricity Projects, 2007; Biewald,
B.; Using Electric System Operating Margins and Build Margins in the Quantification of Carbon Emission
Reductions Attributable to Grid Connected CDM Projects, 2005; Schiller, S., National Action Plan for Energy
Efficiency: Model Energy Efficiency Program Impact Evaluation Guide, November 2007. (Although the latter
document focuses on avoided emissions from energy efficiency, the methodology is relevant to the analysis of wind
energy.)
20
Schiller, S., National Action Plan for Energy Efficiency: Model Energy Efficiency Program Impact Evaluation
Guide, November 2007.
21
U.S. Environmental Protection Agency, Guidance on State Implementation Plan (SIP) Credits for Emission
Reductions from Electric-sector Energy Efficiency and Renewable Energy Measures, August 2004.
11
EPA Climate Leaders Program have recommended alternative methods for quantifying
reductions in greenhouse gas emissions. 22
Although there are variations in methodologies, the process of calculating emissions avoided as a
result of wind generation involves several major steps:
(1) Specifying the appropriate geographic areas (e.g., power market or National Electric
Reliability Council region) where the avoided emissions occur
(2) Identifying the fossil fuel-fired electric generation that is displaced when wind plants
come online
(3) Determining the emission rates for the fossil fuel-fired generation that is displaced in
the specific time periods that wind generation occurs.
In addition, the following elements may be included in the analysis. In situations in which
greater accuracy is required, more detailed analytic approaches can be used to address these
issues:
(1) Incorporating seasonal and daily patterns of wind generation and focusing on the
avoided emissions of fossil fuel-fired generating units that are operating at the margin
(i.e., those units that are the last to be switched online or first to be switched offline)
rather than on the average avoided emissions of all plants on the grid
(2) Analyzing the effects of avoided emissions from current units operating at the margin
(so-called “operating margin”) and the effect of avoided emissions from the future
construction of new fossil fuel-fired units (the “build margin”). The analysis of avoided
fossil fuel emissions resulting from wind plant generation is typically weighted primarily
on the operating margin if the purpose of the analysis is to estimate avoided emissions in
the near term. In comparison, if the analysis is focused on long-term policy effects, such
as the impact of enactment of a Renewable Portfolio Standard over several decades, the
build margin is weighted more heavily. 23 In view of the increasing stringency of air
pollution controls, the average calculated avoided emission rates for most conventional
pollutants typically decline over time.
Wind Energy Can Reduce Overall Emissions, Even Under Emissions Trading
Programs
Although it is clear that wind energy reduces the energy production of fossil fuel-fired generation
at individual power plants or units and reduces actual emissions at those plants, the impact of
wind generation on total overall emissions is more complicated for pollutants that are subject to
regulation under emissions trading programs. These pollutants currently include NOx and SO2.
In addition, some regions are in the process of developing CO2 emissions caps. EPA’s Clean Air
22
World Resources Institute, The Greenhouse Gas Protocol: Guidelines for Quantifying the GHG Reductions from
Grid Connected Electricity Generation, 2007; U.S. Environmental Protection Agency, Climate Leaders Guidance
on Purchases of Green Power and Renewable Energy Certificates, December 2007.
23
World Resources Institute, The Greenhouse Gas Protocol: Guidelines for Quantifying the GHG Reductions from
Grid Connected Electricity Generation, 2007. It should be noted that emission reduction estimates over the longer
term can be calculated as part of detailed wind integration studies, which typically use detailed simulation models
that mimic the unit commitment and economic dispatch decisions of the grid operators. These simulations calculate
the generation mix that will operate during each hour of the year, given a specific wind generation scenario.
12
Mercury Rule, providing cap and trade requirements for mercury emissions from electric
generating units, was recently struck down by the D.C. Circuit Court of Appeals. 24
In cases in which emissions trading programs are in effect, it is not sufficient to simply analyze
the physical operation of the electric system to determine the impact of wind generation on air
emissions. Rather, it also is necessary to review the specific governmental rules regulating the
program to determine if emissions will be reduced on an aggregate or system-wide basis (as
opposed to a power plant or unit basis).
Under some rules, such as the NOx trading rules adopted by many states, emissions can be
reduced in the overall trading market as well as at the individual power plant or unit level.
However, under other legislative and regulatory frameworks, such as the Federal SO2 trading
rules, wind energy generally will not reduce emissions in the overall trading market below the
level set by the emissions cap. The determining factor is not whether the pollutant is subject to an
emissions cap but how the individual cap and trade rules are designed for the particular pollutant.
EMISSIONS TRADING (CAP AND TRADE) BASICS
Emissions trading is a regulatory approach to reduc


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