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Energy Sustainability in a Carbon Constrained World

Energy Sustainability in a Carbon Constrained World. George A. Williams Senior Vice President and Chief Operating Officer. Climate Change Legislation. Since December, little has happened on Capitol Hill regarding climate change and energy policy. .

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Energy Sustainability in a Carbon Constrained World

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  1. Energy Sustainability in a Carbon Constrained World George A. Williams Senior Vice President and Chief Operating Officer

  2. Climate Change Legislation • Since December, little has happened on Capitol Hill regarding climate change and energy policy. • A federal bill to reduce greenhouse gas emissions is unlikely to pass Congress this year (2010). • There is no agreement on the details of a cap-and-trade system. • If Congress doesn't move forward, emission reductions will be forced by federal regulators (EPA), ultimately driving up utility rates.

  3. Climate Change Legislation Cap and Trade is an administrative approach used to control pollution by providing economic incentives for achieving reductions in the emissions of pollutants. A governmental body sets a limit or cap on the amount of a pollutant that can be emitted. Companies are issued emission permits and are required to hold an equivalent number of allowances (or credits) which represent the right to emit a specific amount. The total amount of allowances and credits cannot exceed the cap, limiting total emissions to that level. Companies that need to increase their emission allowance must buy credits from those who pollute less. The transfer of allowances is referred to as a trade.

  4. Climate Change Legislation CHINA 2.8 billion metric tons annual CO2 Emissions; 0.86 tons per MWh WORLDWIDE 10.4 billion metric tons annual CO2 emissions UNITED STATES 2.5 billion metric tons annual CO2 emissions; 0.62 tons per MWh THE REST India, Russia and Germany round out the top 5

  5. Climate Change Legislation UNITED STATES 2.5 billion metric tons annual CO2 emissions EE 2.2 million metric tons annual CO2 Emissions

  6. Climate Change Legislation

  7. Climate Change Legislation

  8. Climate Change Legislation The U.S. can reduce its CO2 emissions by approximately 500 million metric tons per year by moving to an approximate energy mix of: 30% coal (19% decrease from current) 30% nuclear (10% increase) 25% natural gas (4% increase) 10% renewable (7% increase) 5% hydro (no change) This reduction would effectively move the U.S. intensity from 0.62 to 0.45 metric tons per MWh generated (20% reduction).

  9. EE’s Carbon Footprint EE 0.31 APS 0.48 SPS 0.92 PNM 0.94 National average 0.67 Austin Energy 0.49 tons of CO2 per MWh generated (short-tons) 2008 data, Source – Carbon Monitoring for Action - CARMA

  10. EE’s Energy Sales Nuclear 4,693 GWh 42% Natural Gas2,682 24% Coal 671 6% Renewable 1 <1% Purchases 3,152 28% TOTAL 11,175 GWh 100% 2008 data

  11. COST OF ENERGY BY RESOURCE TYPE

  12. Climate Change Legislation Climate change legislation may require building of more Renewable Energy Projects This will increase cost of electricity for El Paso Electric’s customers since renewable energy is more expensive than traditional sources of power

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