FM Alert: GA Tech Studies Clean Power Plan Impact On Energy Costs

A new study, “The Clean Power Plan And Beyond,” by Dr. Marilyn Brown and the Georgia Institute of Technology has found that by implementing the Obama Administration’s Clean Power Plan, which was finalized one year ago today, commercial building owners and occupants in the United States could realize an average annual electricity savings of $11.3 billion (6.7%) in 2030, compared to doing nothing at all.Clean Power Plan

“What this study reveals is that cities, and the commercial buildings that comprise them, hold a key to both lower carbon pollution as well as lower bills for commercial electricity consumers if states embrace energy efficiency and clean energy investments associated with state implementation of the Clean Power Plan,” said Dr. Marilyn Brown, the study’s author.

Sustainability officers across the country might attest to these claims. Stephanie Benfield, director of Atlanta’s Sustainability Office has learned from experience that “energy efficiency is the key to low cost integration of cleaner energy that significantly benefits the bottom line of businesses — large and small, while reducing dirty energy sources that cause climate change.”

According the new Georgia Tech study, which was published in June 2016, these same investments would also have the ancillary benefit of reducing natural gas bills by $3.6 billion (10.1%) in 2030. These savings are triggered in part by a new generation of air source heat pumps that replace less efficient units commonly seen on the rooftops of office buildings, schools, restaurants, and big-box stores. These new technologies tackle one of the most rapidly growing energy uses in the United States — air conditioning. Without any changes in the way electricity is produced, the electricity bills of commercial building owners and occupants in the United States would rise by about 21.4% over the next 15 years.

The Georgia Tech study energy bill savings are expected to be greatest for retail and office buildings. In the United States it is estimated that these building space owners would cut their electricity costs by $2.9 billion and $2 billion respectively in 2030, while at the same time cutting CO2 emissions significantly.

“Occupants and owners of other building types, ranging from education to food and lodging, would also save significantly on their energy bills as states meet their Clean Power Plan goals,” said Dr. Brown. “Energy efficiency offers multiple benefits and these results illustrate how commercial building owners and occupants can gain from more efficient and more affordable air conditioning, lighting, electronics, and other equipment, and from improved building shells as well as rooftop solar systems.”

Role Of Clean Power Plan

The abstract of the study, which was also authored by Alexander Smith and Gyungwon Kim, states: Since the release of the Clean Power Plan (CPP), stakeholders across the U.S. have vigorously debated the pros and cons of different options for reducing CO2 emissions from electricity generation. This paper examines an array of CPP strategies, ranging from incremental to transformational, and from the near-term to the longer-term. The goal is to identify least-cost options to help policymakers and other stakeholders make well-informed choices. The Georgia Institute of Technology’s National Energy Modeling System is used to evaluate alternative futures. Our modeling suggests that CPP compliance can be achieved cost effectively by expanding new natural gas and renewable electricity generation to replace higher emitting coal generation and by using energy efficiency to curb demand growth, thereby enabling a more affordable pace of plant replacements. Post-2030 policies requiring further CO2 emission reductions, in combination with perfect foresight today, would motivate less natural gas build-out over the next 15 years. The South’s response to the CPP is distinct, with a larger share of coal retirements and a greater proportionate uptake of natural gas, energy efficiency, and renewable resources. In addition to reducing CO2 emissions, these least-cost compliance scenarios would produce substantial collateral benefits including lower electricity bills across all customer classes and significant reductions in local air pollution.

The study examined the finalized August 2015 Clean Power Plan developed by the U.S. Environmental Protection Agency (EPA) and the Obama Administration. The plan proposed an historic step aimed at reducing carbon pollution by implementing first ever federal limits on carbon pollution from existing power plants. The Clean Power Plan establishes carbon pollution goals for each state, and is projected to achieve a 32% cut in U.S. carbon pollution from power plants by 2030 compared with 2005.

The study can be downloaded here. Fact sheets on the impacts of the Clean Power Plan to commercial energy bills in the following states are also available at the above link: CA, CO, FL, GA, IL, MA, MI, MO, NY, PA, TN, TX, VA.