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Analysis: Qualified approval for Obama's aim to maintain states' renewables mandates

UNITED STATES: The Obama administration's bid to cut power plant emissions in the US aims to provide an impetus for states to preserve and expand their renewable energy mandates, even though critics say its proposed new greenhouse gas rules could have done more to accelerate the deployment of zero-emissions technologies such as wind.

"In general, I think it's a good thing for renewables," said Steve Clemmer, director of energy researchat  the Union of Concerned Scientists (UCS). "It would have been nicer if they would have had a more aggressive target to reduce emissions, because I think it would have pushed renewables even further."

The Environmental Protection Agency (EPA) issued draft regulations in June laying out state-by-state limits on CO2 emissions from existing electricity generation that add up to an overall reduction of 30% from 2005 levels by 2030. The proposal gives individual states broad discretion in how their cuts are achieved, including investment in new renewable generation, increased energy efficiency, improvements to the existing fleet of power plants, interstate emissions trading, and fuel switching from coal to natural gas.

While it remains to be seen how states would choose to comply with the draft rule, Clemmer believes the rapidly declining cost of wind energy makes it a competitive option.

"Certainly in the middle of the country, in the Plains states, we are already seeing projects that are cheaper than gas plants." Encouraging new renewable energy development will be a natural pathway to compliance in many regions, agrees Tom Wood, who practices environmental law at Stoel Rives.

"For many states, it seems unlikely that they could meet their goals without being able to take credit for additional wind generation," Wood adds.

Protective barrier

The EPA is collecting feedback on the draft and plans to finalise it in June 2015, with states required to file their compliance plans a year after that. Although it could be 2017 or 2018 before the rule starts to impact the wind market, Clemmer does expect to see some immediate effect. The wind sector fought back against attempts in 20 states to roll back renewable energy standards last year, and with similar efforts lined up for 2014, the looming EPA requirements should make legislators think twice before making any cuts.

"This will help put counter-pressure on some of these efforts to overturn or weaken state policies. It will also, in a positive way, provide some momentum to increase standards or adopt new ones in states that don't have them," said Clemmer.

The proposed rule will have to overcome some obstacles, including court challenges, opponents in Congress and, potentially, whoever occupies the White House after the 2016 election. Timing could also be an issue, said Wood. When the EPA issued proposed carbon standards for new power plants in 2012, it garnered more than 2.5 million comments.

"This proposal is far more controversial and will likely receive far more comments," said Wood. "If the EPA sticks with the June 2015 rule issuance date, it seems likely that the rule will not be fully vetted when issued and EPA will have to issue subsequent revisions. That will make it very hard for states, energy developers and utilities to plan for the future."

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