http://www.eia.gov/analysis/requests/ces_hall/

Full report
Appendix A-Request Letter
Appendix B-Tables
Appendix C - Map of NEMS Electricity Market Module Regions

Analysis of Impacts of a Clean Energy Standard as requested by Chairman Hall

Release date: October 25, 2011

Introduction

This report responds to a request from Chairman Ralph M. Hall for an analysis of the impacts of a Clean Energy Standard (CES). The request, as outlined in the letter included in Appendix A, sets out specific assumptions and scenarios for the study.

Background

A CES is a policy that requires covered electricity retailers to supply a specified share of their electricity sales from qualifying clean energy resources. Under a CES, electric generators would be granted clean energy credits for every megawatt-hour (MWh) of electricity they produce using qualifying clean energy sources. Utilities that serve retail customers would use some combination of credits granted to their own generation or credits acquired from other generators to meet their CES obligations. Generators without retail customers or utilities that generated more clean energy credits than needed to meet their own obligations could sell CES credits to other companies.
The impact of a CES will be sensitive to its design details and to assumptions made regarding the cost of the different fuels and technologies that can be used for electricity generation. Chairman Hall's request asks for an evaluation of a particular CES under a variety of alternative assumptions regarding the costs of generation fuels and technologies.
The CES specified by Chairman Hall, hereinafter referred to as the Hall CES (HCES), has the following characteristics:

• Eligible resources to meet the HCES target include: hydroelectric, wind, solar, geothermal, biomass power, municipal solid waste, landfill gas, nuclear, coal-fired plants with carbon capture and sequestration, and natural gas-fired plants with either carbon capture and sequestration or utilizing combined cycle technology.
• Generators earn 0.5 MWh of compliance credits for every 1 MWh of generation from a combined cycle plant that burns natural gas, and 0.9 MWh of compliance credits for every 1 MWh of generation from coal- or gas-fired generation with carbon capture and sequestration. All other HCES-qualified resources earn one HCES credit for every MWh of generation.
• Generation using qualified resources from either new or existing plants in any economic sector can receive HCES credits.
• The HCES target starts from an initial share of 44.8 percent (qualified generation as a percent of sales) in 2013 and rises linearly to 80 percent in 2035. Beyond 2035, the target remains at 80 percent.
• There is no option to purchase compliance credits from the government. All credits are backed by physical generation.
• All electricity retailers are covered by the requirement, regardless of ownership type or size.
• HCES credits earned in one year cannot be "banked" for use in a subsequent year. All credits must be used for compliance in the year that the underlying generation was produced.
• HCES obligations are based on total electricity sales, regardless of source. There is no provision for excluding any electricity sales from a seller'ss baseline based on resources used to produce the electricity or type of customer purchasing the electricity.
• The HCES operates independent of any State-level policies. The same underlying generation can be used to simultaneously comply with the HCES and any State generation requirements, if otherwise allowed for by both Federal and State law.