• In all the scenarios studied, PJM observes that Maryland Load Serving Entities (LSE) do not achieve the state RPS goal based only upon in-state renewable generation. Between 2020 and 2029, Maryland’s RPS is between 4 and 5 times the level of renewable generation existing in-state and modeled from PJM’s
interconnection queue.
6 EmPOWER Maryland Efficiency Act requires reductions to be met by 2015.
2020
• Absent nuclear retirements and significantly higher gas prices, wholesale energy prices in Maryland will initially be lower under the Clean Power Plan than under the 2014 transmission planning case driven by the assumed level of renewable resources and energy efficiency in the modeled scenarios rather than the Clean Power Plan itself.
• In the modeled state-by-state compliance (OPSI 2c) analysis, Maryland does not exceed its emissions target and, therefore, the state’s resources do not incur a CO2 price, but Maryland does realize an increase in its wholesale energy prices of $0.70/MWh (nearly 2 percent) relative to the regional compliance scenario (OPSI 2a).
• State-by-state compliance leads to Maryland’s coal resources increasing their output by about 9 percent and its natural gas resources increasing their output by approximately 10 percent. The state’s emissions from resources subject to the Clean Power Plan rise by nearly 10 percent compared to the regional compliance scenario (OPSI 2a). Because the output of lower cost resources located in states that exceeded their mass target is limited, resources Maryland must dispatch more coal and gas generation.
• Compared to the 2014 transmission planning case, coal generation increases between multiples of 2 to 5 across all modeled scenarios. Similarly natural gas generation increases between multiples of 1 to 4 times relative to the 2014 transmission planning case. RGGI participation in the 2014 transmission planning case disadvantages Maryland resources relative to other resources in non-RGGI states that don’t have to account for CO2 cost. Within a regional compliance scenario in which all resources face the same CO2 cost Maryland resources appear as lower cost in the PJM regional dispatch.
• With the exception of the High Gas Price scenario, in all other scenarios Maryland has a net positive emissions position that is used in the modeling to offset net negative emissions positions of other states under regional compliance. But in the High Gas price scenario, Maryland’s net negative emissions position is offset by other states with net positive emissions positions.
Table 13: Maryland Scenario Results in 2020
MD in 2020 RTEP OPSI 2a OPSI 2b.1 OPSI 2b.2 OPSI 2b.3 OPSI 2b.4 OPSI 2c State Load Energy Cost
Total Load (MWh) 75,002,935 75,002,935 75,002,935 75,002,935 75,002,935 75,002,935 75,002,935
State LMP ($/MWh) $41.3 $38.0 $38.1 $38.5 $57.3 $52.1 $38.7
PJM Load LMP $38.3 $35.8 $36.0 $36.4 $54.5 $50.5 $36.7
Load Energy Cost ($
Millions) $3,083 $2,729 $2,738 $2,830 $4,116 $3,741 $2,781
Generation Output (MWh), Emissions (Tons) and Net Emissions Value ($)
Total Generation 26,956,340 43,600,068 43,272,105 44,559,692 50,841,383 46,591,866 45,855,885
MD in 2020 RTEP OPSI 2a OPSI 2b.1 OPSI 2b.2 OPSI 2b.3 OPSI 2b.4 OPSI 2c
Renewable Portfolio Standard and Energy Efficiency Credit for Computing Resulting Emissions Rates Energy Efficiency
2025
• By 2025, even with more stringent emissions goals across PJM, and under-achieving the EPA assumed energy efficiency target used in the goal computation by 50 percent (OPSI 2b.2), Maryland’s wholesale energy price decreases by $0.70/MWh relative to the 2014 transmission planning case. This reduction, in spite of Clean Power Plan compliance, is driven by the fact there are still more renewable resources and energy efficiency in this modeled scenario than in the 2014 transmission planning case.
• Although resources in the OPSI 2a and OPSI 2b.1 face a CO2 price for each short ton of emissions produced, wholesale energy prices are still below the 2014 transmission planning case driven by the assumed additional energy efficiency and renewable resources in the modeled scenarios.
• Because the CO2 mass-based targets become more stringent in 2025, the OPSI 2b.3 (High Gas) and OPSI 2b.4 (50 percent nuclear) modeled scenarios have an even greater impact on wholesale energy prices. The CO2 prices more than double in these scenarios compared to their 2020 levels and the wholesale energy prices are approximately 34 and 31 percent higher, respectively, than the 2014 transmission planning case.
• Coal generation in the state declines from 7 and 26 percent in 2025 compared to 2020 in the modeled scenarios. The decline in coal generation is consistent with the relative change in the CO2 price by scenario.
The OPSI 2a case which has the lowest CO2 also has the lowest reduction in coal output. Whereas the OPSI 2b.4 (50 percent nuclear) scenario has both the highest CO2 price and change in coal output relative to 2020.
• Gas generation on average across modeled scenarios increased nearly 18 percent relative to 2020. The average is brought down by the high nuclear retirement scenario in which Maryland’s gas generation only increased 6 percent relative to 2020. This is because natural gas generation in the state was already twice as high in this scenario relative to the other scenarios in 2020.
• As was observed in 2020, generation in Maryland continues to be significantly higher in each of the compliance cases relative to the 2014 transmission planning case.
• Maryland has a net positive emissions position across all scenarios in 2025 except for the High Gas price scenario. The 50 percent nuclear scenario results in the highest net positive position which is driven by coal generation declining more significantly in this scenario than in the other scenarios. Again this net positive position offsets the net negative position in other states to help achieve region-wide compliance.
Table 14: Maryland Scenario Results in 2025
MD in 2025 RTEP OPSI 2a OPSI 2b.1 OPSI 2b.2 OPSI 2b.3 OPSI 2b.4
State Load Energy Cost
Total Load (MWh) 75,962,050 75,962,050 75,962,050 75,962,050 75,962,050 75,962,050
MD in 2025 RTEP OPSI 2a OPSI 2b.1 OPSI 2b.2 OPSI 2b.3 OPSI 2b.4
Renewable Portfolio Standard and Energy Efficiency Credit for Computing Resulting Emissions Rates Energy Efficiency (MWh) 429,050 6,867,426 6,867,426 3,433,713 6,867,426 6,867,426
MD in 2025 RTEP OPSI 2a OPSI 2b.1 OPSI 2b.2 OPSI 2b.3 OPSI 2b.4
111(b) and RPS Goals 615 780 735 771 862 668
2029
• If the PJM states all achieve their RPS but energy efficiency investment results in only 50 percent of the EPA’s (OPSI 2b.2) anticipated energy efficiency levels, wholesale energy prices in Maryland will be higher than the 2014 transmission planning case by $1.47/MWh or just over 2 percent in 2029 under the Clean Power Plan as modeled. Meeting both the state RPS requirements and the energy efficiency levels used by the EPA in setting the CO2 rate targets will lead to Maryland’s wholesale energy prices being lower than the 2014 transmission planning case . These results, in spite of Clean Power Plan compliance, are driven by the fact there are still more renewable resources and energy efficiency in this modeled scenario than in the 2014 transmission planning case.
• With the exception of the 50 percent nuclear scenario, coal generation is lower than its 2025 levels by 6 to 11 percent. This is driven by the declining CO2 mass targets. CO2 prices increase over time in response to both lower mass targets but also due to higher forecasted natural gas prices modeled for 2029.
• Although removing 50 percent of the potential nuclear generation causes coal generation to increase about 1 percent relative to 2025, the total level of coal generation is still nearly 30 percent lower than the other regional compliance scenarios.
• The gas generation observed in each of the modeled compliance scenarios increases between 1.4 and 10.9 percent relative to 2025 levels. The share of gas generation from unregulated new sources falls slightly.
• Except for the High Gas scenario, Maryland has a net positive emissions position. with a range of values between $26 million and $185 million. In the High Gas scenario coal unit generation is significantly higher (on average 55 percent) than the other regional compliance scenarios; which leads to a net negative emissions position.
Table 15: Maryland Scenario Results in 2029
MD in 2029 RTEP OPSI 2a OPSI 2b.1 OPSI 2b.2 OPSI 2b.3 OPSI 2b.4
State Load Energy Cost
Total Load (MWh) 76,685,085 76,685,085 76,685,085 76,685,085 76,685,085 76,685,085
State LMP ($/MWh) $64.6 $58.0 $62.5 $66.1 $91.7 $85.4
PJM Load LMP $61.0 $55.2 $59.7 $62.9 $88.0 $84.0
Load Energy Cost ($ Millions) $4,927 $3,947 $4,249 $4,781 $6,237 $5,811
MD in 2029 RTEP OPSI 2a OPSI 2b.1 OPSI 2b.2 OPSI 2b.3 OPSI 2b.4
Renewable Portfolio Standard and Energy Efficiency Credit for Computing Resulting Emissions Rates Energy Efficiency (MWh) 429,050 8,661,602 8,661,602 4,330,801 8,661,602 8,661,602
Michigan
Michigan is one of six states in PJM whose state load is served by multiple balancing authorities. The portion of load served by PJM represented less than 4 percent of the state’s total 2012 load. There is only one fossil-fired facility in the PJM portion of Michigan and it is a combined-cycle gas resource. Because the resources in Michigan that are operated within PJM are not representative of the state’s portfolio of resources, PJM did not evaluate Michigan for state-by-state compliance, but did determine the contribution of Michigan’s PJM resources to the regional target. In the absence of detailed guidance from EPA on incorporating partial states within a regional compliance plan PJM applied the same methodology to Michigan as any other state whose load and resources were fully within the PJM balancing authority. Given the only eligible resource is a combined-cycle resource located within a state in which coal is the dominant fuel source, the emissions rate/mass targets calculated for Michigan within PJM are much lower than what would be calculated for the whole state. The wholesale energy market impacts discussed below do not account for capital costs associated with renewable resources, energy efficiency, or new combined-cycle gas resources. Such costs may appear in retail electricity rates as determined by state commissions, but such determinations are beyond the scope of this analysis. Moreover, the simulation results discussed below do not attempt to draw any conclusions on wholesale capacity market outcomes.
Observations from the Emissions Rate Calculation
As part of the analysis, PJM calculated the emissions rate target and a corresponding mass target for each state using EPA’s guidance. Below are observations from PJM’s calculation for Michigan:
• The only emissions regulated under the Clean Power Plan in Michigan were from a single combined-cycle facility. Consequently, PJM did not apply the 6 percent heat-rate improvement building block to the baseline emissions, nor did it apply the redispatch building block.
• In addition, the Donald C. Cook (DCC) nuclear plant is also in PJM as a capacity resource. Consequently, PJM assumed 5.8 percent of DCC’s 2012 output would count towards the emissions rate reduction.
• The amount of renewables included in EPA’s calculated emission rate target for Michigan range from 41 percent to 67 percent of the RPS requirement calculated by PJM. The combination of EPA assumed levels of energy efficiency and renewable energy ranges from 86 percent to 179 percent of the state RPS requirement.
• As a state, in 2012 Michigan produced more generation than its total energy consumption. This is also true for the generation that would be operated in PJM relative to the load served by PJM. Because Michigan was a net-exporter in 2012, all of EPA’s assumed levels of energy efficiency were built into the state targets.