New NRDC Analysis Shows that Illinois Can Meet Clean Power Plan Goals and Deliver Huge Benefits to State's Economy
Following NRDC's national analysis of the Clean Power Plan, NRDC released state by state analyses last week showing that Illinois can cut even more carbon pollution than called for in EPA's Clean Power Plan. Under the new state analysis, Illinois can achieve the goals of the Clean Power Plan primarily through state clean energy policies such as the state's Renewable Energy Portfolio Standard (RPS) and Energy Efficiency Portfolio Standard (EEPS), and developing a market to cut carbon pollution, which in combination, would turbocharge the state's growing clean energy economy.
States are given maximum flexibility under the Clean Power Plan, in addition to time, to develop a plan best suited to their unique circumstances and objectives. An initial State Implementation Plan (or a "SIP") must be submitted to U.S. EPA by September 2016. Each state will have to outline in its SIP how it intends to cut carbon pollution from the electric sector to achieve both an interim (2022) and final goal (2030). Illinois must ultimately reduce carbon pollution from the electric sector by 31% by 2030 from 2012 levels.
Fortunately, Illinois has already made progress in cutting its carbon pollution by shutting down or announcing plans to shut down some of the state's dirtiest coal plants and converting some to natural gas (approximately 3,400 megawatts by 2020 will be retired or converted). Additionally, Illinois has state policies that have been on the books since 2007 that require its utilities to invest in renewable energy, like wind and sun, and help consumers save money by reducing their energy usage through energy efficiency, which cuts down on the need for generation from dirty power plants.
NRDC's analysis modeled the factors described above: announced fossil fuel retirements and conversions, the state's existing RPS and EEPS, which was measured against business as usual under existing policies and even a no policy scenario, and took into account increased demand for power over time. It was found that the best way to meet and even exceed the new carbon pollution limit is to implement a market mechanism to disincentivize the use of dirty fuels and to displace those dirty fuels by increasing the production of clean, renewable energy and cutting down on demand through maximizing energy efficiency.
In the analysis, NRDC modeled such a plan that is pending in Illinois's statehouse which continues to gain traction in the media, among lawmakers, and private industry: The Illinois Clean Jobs Bill. The model found that the Land of Lincoln could handily meet and even exceed the Clean Power Plan's goals by taking three simple steps: increase the state's RPS goal to 35 percent clean energy by 2035 (current goal is 25% by 2025); cut electricity consumption by 20 percent by 2025 through energy efficiency; and further cut carbon pollution using proven market-based solutions that place a value on carbon pollution, which will help ensure that the dirty megawatts of power are being replaced with clean energy.
Another benefit of shifting to a cleaner energy mix is that Illinois can continue to export energy to other states in the region. While it's well known that Illinois is one of the country's largest agricultural producers, less known is that Illinois also is a net exporter of the energy it produces, exporting approximately 38% percent of the state's power production into regional power markets.
Illinois could profit by selling carbon allowances, or credits from the excess power to neighboring states and regions. The Clean Power Plan allows and encourages this proven compliance strategy, because there are economies of scale that bring deeper savings and cuts in emissions. Illinois and other states that generate more clean energy credits than they need can sell or trade them with other states, making electricity a commodity like corn or soy that can benefit Illinois's economy.
NRDC will be providing more analysis over the coming weeks on the benefits of a trade-ready approach under the Clean Power Plan. We will outline the best approach for a state or region to implement if it is considering using an auction or market to cut carbon pollution and reinvest market proceeds into clean energy. The bottom line is that the Clean Power Plan gives states new tools that not only make our air cleaner and planet safer, but also opens up big opportunities to change the way we make, use, and even value electricity.