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Figure A.4. Capacity Price Suppression Avoided Environmental Compliance Costs The AESC Study estimates the cost of complying with regulations governing the emissions of SO2, NOx, and CO2. Each of these pollutants is currently limited by a capand-trade mechanism, which results in market prices for pollution allowances. These market prices are then included in the operating costs of the power plants that produce these emissions. The AESC Study projects the market prices for each of these emissions, and includes these costs as one of the components of avoided costs. (Synapse 2011, p.2-14). These costs are not environmental externalities; they are the cost of complying with current and future environmental regulations. The AESC Study's forecast of CO2 allowance prices is worthy of some discussion here. The projected allowance prices associated with CO2 are presented in Figures A.5 and A.6, in $/short ton and $/MWh, respectively. These figures also present the 20 year levelized cost of each price forecast. The AESC Study assumes that Regional Greenhouse Gas Initiative (RGGI) allowances prices will persist in the short-term, based on recent auction results which have been at the reserve price and are likely to remain so in the future. After 2017, the AESC Study uses prices estimated for expected federal regulations, in which a national cap-and-trade program for greenhouse gas emissions is enacted. From 2026 onward, the AESC Study assumes allowance prices will rise at the rate of inflation. (Synapse 2011, pp. 2-15, 2-19). Best Practices in Energy Efficiency Program Screening | www.nhpci.org | 73
Figure A.5. Forecasted Allowance Price of Carbon Dioxide ($/Short Ton) Figure A.6. Forecasted Allowance Price of Carbon Dioxide ($/MWh) However, the RGGI requirements and the forecasted federal cap-and-trade requirements that result in the CO2 prices presented above will not eliminate the environmental impacts of greenhouse gas emissions. Additional regulations are already in place in some states to limit greenhouse gas emissions to more stringent levels. States that adopt more stringent GHG standards than the RGGI requirements or the forecasted federal requirements will experience higher environmental compliance costs than those presented above. The AESC Study estimates that the long-term cost of reducing CO2 emissions to a sustainability target of 80 percent below 1990 levels by 2050 can be approximated at $80/ton of carbon, based on a review of several studies of global carbon mitigation options (Synapse 2011, pp.1-18, 1-19). States that establish comparable targets for climate mitigation could view the $80/ton long-term abatement cost as a reasonable | 74 Best Practices in Energy Efficiency Program Screening | www.nhpci.org
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Preface In 2011, a group of energy
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Executive Summary Accounting for th
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Unfortunately, OPIs are often not a
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mitigating GHG emissions. In region
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Choosing the most appropriate test
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1. Introduction Background Despite
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Figure 1.1. Levelized Costs by Prog
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The Participant Test. This test inc
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The TRC test is the next most compr
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Screening efficiency programs with
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eing applied. Finally, it is import
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Figure 2.1. Cost-Effectiveness Resu
Page 26 and 27: and compare the difference in prese
Page 28 and 29: not provide an accurate picture of
Page 30 and 31: mobile sources, and air quality sta
Page 32 and 33: or more. Supply-side resources have
Page 34 and 35: consistent comparison purposes. The
Page 36 and 37: 4. Capturing All the Impacts of Ene
Page 38 and 39: Utility related OPIs: just as the u
Page 40 and 41: Among the participant-perspective O
Page 42 and 43: a more qualitative analysis on the
Page 44 and 45: esidential and low-income sector, s
Page 46 and 47: groups; and (3) the likelihood of s
Page 48 and 49: We recommend that program administr
Page 50 and 51: announced the retirement of its coa
Page 52 and 53: Oregon also applies a 10 percent co
Page 54 and 55: used throughout. If the annual cost
Page 56 and 57: widely accepted as representing low
Page 58 and 59: Illustrative Example Figure 5.1 bel
Page 60 and 61: Recommendation Energy efficiency pr
Page 62 and 63: Efficiency program screening should
Page 64 and 65: Checklist of Best Practices Here we
Page 66 and 67: Demand Side Management Program And
Page 68 and 69: NYSERDA 2012. “New York’s Syste
Page 70 and 71: Appendix A - Illustrative Example a
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Page 74 and 75: indicated in Figure A.2, avoided ca
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