CCS COSTS BILLIONS, EFFICIENCY & WIND SAVE

Grid operator says CO2 controls will cost billions
Scott DiSavino (w/ David Gregorio), January 28, 2009 (Reuters)

"PJM, the largest U.S. electricity grid operator, said…a study it commissioned indicates that Congressional proposals to reduce carbon dioxide emissions from power plants could boost power prices…[PJM] said the study also showed energy efficiency programs and additional wind power would cut that price hike by billions of dollars and reduce CO2 emissions by millions of tons.

"The study, by PJM Senior Economist Dr. Paul Sotkiewicz and the market simulation department, concluded wholesale power prices would climb from $7.50 per megawatt hour to $45/MWh in 2013.

"Reducing electric consumption by 2 percent to 10 percent could lower prices between $3/MWh and $13/MWh, or between $3 billion and $17 billion per year, and lower CO2 emissions between 12 million and 60 million tons in 2013."

And the cheapest megawatt is the one that isn't used, the NEGAwatt. (click to enlarge)

"Installing 15,000 megawatts (MW) of wind power by 2013, about a third of the grid's proposed wind projects, would cut CO2 emissions by nearly 35 million tons and reduce wholesale prices by $3.55 billion to $4.74 billion…

"The study used models to simulate the impact of cap-and-trade or carbon tax policies. It based its calculations on projected carbon prices within ranges identified by government agencies from $10 to $60 per ton…

"The study said CO2 prices would have to reach $40/ton before natural gas combined cycle power plants would be run in place of coal-fired units on a large scale…Coal, which is much cheaper than other fossil fuels such as natural gas, generates about half the electricity used in the United States. But a coal plant produces about twice as much CO2 as a natural gas-fired plant…"