Regional Greenhouse Gas InitiativePresentation to
American Council of Engineering Companies of New HampshireJanuary 15, 2008
New Hampshire Department of Environmental Services Commissioner
Thomas S. Burack
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Climate ChangeImpacts on New Hampshire
• Trends indicate NH is experiencing impacts now
• Extreme storm events
• More rain in winter• Less snow cover
Average Winter Temperature in the Northeast 1899-2000
Time series represent areally weighted average of 56 meteorological stations.
Flooding in NH
October 2005 May 2006April 2007
• Peak flows in many rivers greater than 100 year flood
• Millions of dollars in state and individual losses
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Future Economic Impacts to New HampshireNortheast Climate Impacts Assessment (2007)
By late in the century (without reducing GHG emissions)
• Winter snow season cut in half• Sea-level rise up to nearly three feet• More than 60 days with temperatures over 90°F in
most cities • 4 to 28 days with temperatures over 100°F
(compared with one or two days per year historically).
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What if we don’t act now to reduce green-house gases?
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Global Cost of No Action(Stern Review UK Treasury 2006)
• Extreme weather alone – 0.5-1% world GDP annually• Total cost of taking no action equivalent to reduction
in consumption per head of 5-20% annually• Less costly to take actions now than to delay• Risk to world economy on the order of multi-national
world conflict• Insurance market already reacting
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NH CO2 (equivalent) Emissions by Sector
2004
Electric Utilities
34%
Commercial
8%Industrial
7%
Residential
15%
Transportation
34%
Agriculture,
Forestry and
Waste
2%
Transportation
Residential
Industrial
Commercial
Electric Utilities
Agriculture, Forestry
and Waste
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RGGI Cap & Trade Program
• Regional cap on emissions from fossil fuel-fired power plants >25 megawatts
• Cap (10 state region) 188 million allowances • 1 allowance = 1 ton• NH Budget 8.6 million allowances• Majority of allowances will be sold in regional
auction
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RGGI Cap Levels
• 2-Phase CO2 Caps (gradual, keeps cost low)– stabilization 2009 – 2014 (no absolute
reductions, but reductions from business-as-usual)
• Phase I Regional Cap = 188,076,976 tons• Phase I NH Budget = 8,620,460 tons
– 10% reduction 2015 - 2018 • (2.5% per year for 4 years)
• Built-in Review of Program in 2012
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Compliance
• Power plants must have enough allowances to equal their emissions by the end of the three year period
• Can buy allowances (regional auction) or offset allowances
• Unlimited banking of allowances
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RGGI Offset Projects
• 1st set – methane capture, SF6 (electric insulator), afforestation, end-use efficiency
• Initially limited to 3.3% of each source’s emissions• Offsets may come from RGGI region or from another
US state at 1:1• Safety valves built in to increase use of offsets for
economic relief if necessary
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RGGI impact on NH
• 9 other states going forward with RGGI
• Regional energy prices will be affected by RGGI whether NH participates or not
• Only way to mitigate costs is to participate and use auction revenues
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Regional Leadership
• Driving federal action• Western Climate Initiative includes Arizona, California, Montana,
New Mexico, Oregon, Utah, Washington, British Columbia, and Manitoba and 10 observers including 3 Canadian provinces and Sonora, Mexico
• Midwestern Greenhouse Gas Reduction Accord includes Illinois, Iowa, Kansas, Michigan, Minnesota, Wisconsin, and Manitoba (Indiana, Ohio, and S. Dakota also signed as observers)
• Investment in more efficient energy market is positive for NH regardless of climate change
W CI960 MTons (US) / 13% US Midwest Group
1027 MTons (US) / 14% USRGGI
766 MTons (US) / 10% US
Total Emissions and Percentage of Total U.S.Emissions of Regional Cap-and-Trade Initiatives
Notes:1. B ritish Colum bia and M anitoba Canada are m em bers of W CI.2. M anitoba Canada is a m em ber of the M idwest G roup.3. C ross-hatching indicates observer status (4. Kansas is a m em ber of the M idwest G roup and an O bserver for W C I.5. O ntario , Q uebec, and Saskatchewan Canada, and Sonora M exico are O bservers of W CI.Source: W orld Resources Institu te, Novem ber 2007
RGGI Cap 188 MTons (US) (Electric Sector Only)
- W CI - M idwest G roup).
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Is RGGI Significant?
• RGGI would represent the seventh highest emitting developed country
• The RGGI cap (188,076,976 tons) is similar to the emissions of Australia, France, or Italy
• There is no “silver bullet” but RGGI is part of the “silver buckshot”
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Benefits of HB 1434• Helps to mitigate long-term energy costs via greater
investment in energy efficiency
• Creates a market signal that encourages development of cleaner and, in many cases, more local energy sources
• Increases our energy independence with more local energy sources: keeping more dollars local
• Starts to mitigate our GHG emissions to avoid the most deleterious projections of climate change impacts
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Downside of not joining RGGI• Roughly half of NH’s supply is purchased from the regional
market
• As a consequence, NH electric prices will be affected by RGGI
• No benefit of sale of NH allowances
• No seat at table – no influence on program
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Estimated Impact to Business Electricity Costs
2006 average monthly bill(UNH estimate from FERC Form 1)
Small $308 (81,000 accounts)
Large $38,000 (350 accounts)
Not joining RGGI Increase to average monthly bill
2009 2012 2015 2018
Small $1.15 $2.38 $3.72 $5.16
Large $142 $292 $458 $636
% Change
0.4% 0.8% 1.2% 1.7%
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Potential Mitigation of Monthly Business Electricity Costs
2009 2012 2013 2015 2018
Small Business
$1.29 $(0.20) $(1.90) $(4.00) $(9.78)
Large Business
$159 $(25) $(234) $(493) $(1,205)
% Change 0.4% -0.07% -0.6% -1.3% -3.2%
Net change from investment in energy efficiency compared to not joining RGGI
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Energy Efficiency – Regional Priority
• Record peak demand in summer >28,000 MW• Peak demand increase twice as fast as average load
growth• Costly new capacity may be needed to meet demand
reached for only a few hours or days our of the year• Reducing electricity use by 5% during peak times
will save consumers $580 million a year (ISO – NE June 2006)
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Major Potential for Energy Efficiency Improvements
• RGGI bill proposing a “fuel-neutral” fund
• Technology continuing to improve
• Recognize opportunities vary
• Increased energy efficiency overall – can avoid costly new capacity – reducing everyone’s energy costs
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Light Bulb Evolution
Incandescent CFL CFL Cold Cathode LEDElectric Demand 100 Watts 25 Watts 18 Watts 8 Watts 2.2 WattsHours Use 4 hrs/day x 365 4 hrs/day x 365 4 hrs/day x 365 4 hrs/day x 365 4 hrs/day x 365Annual kWh Usage 146 37 26 12 3Annual kWh Savings 110 120 134 143Annual Cost (@ $0.149) $21.75 $5.44 $3.92 $1.74 $0.48Annual $ Savings $16.32 $17.84 $20.01 $21.28
Annual CO2 Reduction (lbs) 121 133 149 158
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Fluorescent Light Evolution
34–40 Watts 32 Watts 28 Watts
1950’s – 1980’s late 1980’s – 1990’s Last 5 yrs
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UNH Economic Analysis 2007
• NH participation is lower cost overall to NH than not joining
• Lowest long-term net utility cost is to auction allowances and put revenues into energy efficiency
• Positive impact on employment and the overall NH economy
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Opportunity for Economic Development
• NH tradition of innovation and leadership
• NH needs to foster R&D development of new technologies and related ancillary services
• Current examples – Power Span
– GT Solar
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What’s the Ultimate Source of Greenhouse Gases?
ENERGY DEMANDfor
Electricity, Heating/Cooling and Transportation
• Every megawatt-hour of electricity used produces 1,100 lbs. of CO2
• Every gallon of gasoline burned produces 20 lbs. of CO2
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Solutions
• Make your buildings ENERGY STARS (or Leed certified).
• Light up your life (with Energy Star qualified lighting products).
• Establish “turn off” and “unplug” policies for electronic equipment and lights.
• Reduce, Reuse, and Recycle (use double-sided printing and copying)
• Green your fleet and driving habits!BiodieselBiodiesel
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• Buildings• Lighting• Appliances (dishwashers, furnaces, stoves, washer
machines)• Office Equipment• www.energystar.gov
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Reduce fuel consumption in motor vehicles
Establish fuel economy standards for new purchases
Establish anti-idling policies
Promote carpooling and teleconferencing
Less Greenhouse Gases – Less Dependence on Foreign Oil
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Consider the Hybrid Option
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Contacts
Tom Burack [email protected]
271- 2958
Bob Scott [email protected]
271-1088
Joanne Morin [email protected]
271-5552