DRAFT 2016 RGGI Program

Review CPP Reference Case and

Model Run #1 Results
April 29, 2016

Disclaimer This presentation, prepared by ICF International under contract with RGGI, Inc., is designed to support ongoing
evaluation of state RGGI programs. The opinions, data and analysis contained in this report do not necessarily reflect those of RGGI,
Inc. or any of the RGGI Participating States.

DRAFT 2016 CPP Reference Case and Model

Run #1 Projections
The following slides present select projections from two cases that RGGI
specified for evaluation:
The CPP Nationally Reference Case, assuming Clean Power Plan in states
outside of RGGI. This CPP assumption is the same for Model Run #1.
The Model Run #1, assuming a reduction in the number of CCR allowances
available to limit available allowances each year in RGGI to the CPP mass
based goals
Projections are based on assumptions in place as of April 15, 2016.

These projections are draft and may change as ICF makes refinements based on
review and input by the States.
Detailed assumptions are summarized in accompanying materials.

Assumptions Updates
The cases rely on some assumptions that have been updated since they were
published and previously reviewed with stakeholders:
Natural gas transportation costs are based on recent historical weathernormalized delivered prices but no longer adjusted over time to reflect cost
trends from the Annual Energy Outlook (AEO) 2015.
Incremental renewable capacity and energy efficiency have been assumed
for New York consistent with the proposed Clean Energy Standard (CES).

Some state-specific changes to economic biomass builds.

CPP Nationally Reference Case and Model

Run #1 Specifications
Assumption
RGGI Cap

RGGI Cost Containment

Reserve (CCR)

CPP Nationally (CPP) Reference

Case

Model Run #1 (MR1)

2020 cap extended through end of modeling horizon

10 million tons available in each
year through end of modeling
horizon

10 million tons available in each

year, limited each year by RGGI CPP
mass based goal. CCR declines from
10 M in 2022 to 1.9 M in 2031.

RGGI CCR Trigger Price

Trigger price rising at 2.5% annually through end of modeling horizon

RGGI Offsets

Offsets allowed for up to 3.3% of compliance through end of modeling

horizon at $25/ton

RGGI Trading

Trading of RGGI allowances among RGGI states

Banking

Unlimited banking across the modeling horizon

Clean Power Plan Goals

Clean Power Plan Trading

States outside of RGGI subject to mass caps covering existing and new
units
Trading among all states outside of RGGI
4

Million Tons CO2

Assumed RGGI CO2 Caps and CCR Availability

100

RGGI Emission Cap

80
60
40
20
0

Million Tons CO2

2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031

20

RGGI Maximum CCR Availability

CCR (CPP Ref)

CCR (MR1)

15
10
5
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031

RGGI Cumulative Capacity Additions

The chart shows the distribution of capacity additions and retirements across firmly
planned (Firm) and model-projected (Economic) types.
30,000
Addition

2023

2031

25,000
20,000

MW

15,000

Economic Renewables
Economic Conventional

10,000

Firm Renewable

5,000

Firm Conventional

Retirements

(5,000)
(10,000)
Retirement

(15,000)
CPP Ref

MR1

CPP Ref

MR1
6

RGGI Cumulative Capacity Additions (2)

The chart shows the distribution of capacity additions and retirements by capacity type.
30,000
Addition

2023

2031

25,000

Renewable: Biomass

20,000

Renewable: Solar

Renewable: Wind

MW

15,000

Renewable: Hydro

10,000

Gas: CT

5,000

Gas: CC
Natural Gas

Other Steam
Coal

(5,000)

Nuclear
(10,000)
Retirement

(15,000)
CPP Ref

MR1

CPP Ref

MR1
7

RGGI Generation Mix

The chart shows generation by type and net imports for the RGGI states.
450,000
2031

2023
400,000

Net Imports
Biomass and Other
Hydro
Solar
Wind
Gas CT
Gas CC
Other Steam
Coal
Nuclear

350,000

GWh

300,000
250,000
200,000
150,000
100,000
50,000
0
CPP Ref

MR1

CPP Ref

MR1
8

RGGI CO2 Emissions

The chart shows projected CO2 emissions from RGGI-affected sources.
Emissions exceed the RGGI Cap when allowances are withdrawn from the bank or
purchased at the CCR trigger price.
120

Historical

Projected

Note: Assumes that any allowance

bank is fully exhausted in 2031.

Million Tons CO2

100
80
60
40

CPP Ref
MR1

20

RGGI Cap

0
2012

2014

2016

2018

2020

2022

2024

2026

2028

2030
9

RGGI Emissions (Million of Tons)

Cumulative Emissions
Case
2016-2021

2022-2031

2022-2029

2030-2031

CPP Nationally
Reference Case

504

822

642

179

Model Run #1

504

807

634

173

2022-2031

2022-2029

2030-2031

850

690

160

CPP Goals
(Aggregate for RGGI States)

10

CO2 Emission Reductions CPP Reference

The chart shows the projected CO2 emissions relative to the cap and the use of banked
allowances and CCR allowances used for compliance.
120

Bank Withdrawal (incl. CCR tons)

Incremental Banking (not incl. CCR tons)

Million Tons CO2

100

RGGI Emissions

80
RGGI Cap
60
RGGI Adjusted Cap
40

20

CCR Purchases = 40 MM
10

10

10

10

0
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031
11

CO2 Emission Reductions MR1

The chart shows the projected CO2 emissions relative to the cap and the use of banked
allowances and CCR allowances used for compliance.
120

Bank Withdrawal (incl. CCR tons)

Incremental Banking (not incl. CCR tons)

100

Million Tons CO2

RGGI Emissions
80
RGGI Cap
60
RGGI Adjusted Cap
40
CCR Purchases = 25.4 MM

20
5

0
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031
12

RGGI Firm Power Prices

The charts show the projected RGGI average annual firm (energy + capacity) prices in
constant 2012 dollars.
60
50

2012$/MWh

40
30
20

CPP Ref
10

MR1
0
2016

2018

2020

2022

2024

2026

2028

2030

2032

13

RGGI Allowance Prices

The charts show the projected RGGI allowance prices in constant 2012 dollars.
12

10

2012$/Ton

Price exceeds CCR trigger price in CPP Ref in

2029 and later, and in 2026 and later in the
MR1 case.

CPP Ref

MR1

CCR Trigger
0
2016

2018

2020

2022

2024

2026

2028

2030

2032
14