Key Takeaways
EPA has decided to wait until after the November election to limit carbon dioxide emissions from existing natural gas electric plants.
EPA will finalize its power plant rule for existing coal plants and new gas plants in April.
The new regulations require technologies that are neither commercially nor economically viable.
Opponents point out that the new regulations will hurt grid reliability, which is already weakened by intermittent and weather-driven solar and wind energy along with the “electrification of everything.”
The U.S. Environmental Protection Agency (EPA) is planning to exclude existing natural gas power plants from its proposed carbon regulations that it plans to finalize in April. EPA’s initial proposal required stringent controls on those facilities, as well as new gas and existing and new coal plants. The EPA still plans to finalize standards this spring to cut carbon dioxide emissions from existing coal and new gas-fired power plants, but will re-propose wider-scale regulations targeting the entire fleet of natural gas plants at a later date. The electric industry and others had questioned whether the EPA had authority to force use of technologies such as carbon capture and sequestration and hydrogen adaptation that are not economically or technically feasible for widespread use, and which are required to meet the rule. According to EPA Administrator Michael Regan, “The agency is taking a new, comprehensive approach to cover the entire fleet of natural gas-fired turbines, as well as cover more pollutants including climate, toxic and criteria air pollution.” But, the new approach will be postponed until after the November election.
Last May, the EPA proposed regulations that would force power companies to install carbon capture equipment (CCS) that siphons the carbon dioxide from a plant’s smokestack before it reaches the atmosphere or use hydrogen as a fuel for both existing and new gas-fired power plants. Since neither technology is economically available today, it is expected that there would be massive plant closures that would put the reliability of the U.S. electric grid in further jeopardy. The Edison Electric Institute, a trade group of investor-owned utilities, had identified significant challenges for existing natural gas generation in EPA’s original proposed rule.
The original proposed regulation would mark the first time the federal government restricted carbon dioxide emissions from existing power plants, which produce about 30 percent of U.S. carbon dioxide emissions, second only to the transportation sector, as well as future electric plants. Almost all coal plants — along with large, frequently used gas-fired plants — would have had to cut or capture nearly all their carbon dioxide emissions by 2038. Plants that could not meet the new standards would be forced to shutter. Due to competition from natural gas plants and onerous regulations, no new coal plants have been constructed in the United States in more than a decade and dozens of coal-fired plants have closed in recent years.
The National Mining Association warned of “an onslaught” of government regulation “designed to shut down the coal fleet prematurely″ when the EPA proposal was announced last year. Regan has denied that the power plant rule is aimed at shutting down the coal sector, but acknowledged last year that, “ we will see some coal retirements.”
Coal provided just over 16 percent of U.S. electricity in 2023, down from 45 percent in 2010, and natural gas provided 43 percent of U.S. electricity in 2023. The two generators along with nuclear power are the major U.S. power facilities that keep the electric grid operating reliably with “dispatchable,” or on-demand power. The remainder of electricity generation comes from renewables such as hydropower, wind, and solar. The latter two technologies are intermittent and weather-driven and only produce power when the sun is shining and the wind is blowing. They therefore must be backed up with dispatchable sources that can fill in during times when they are not available.
Much of the EPA plan is expected to be challenged by industry groups and concerned states, who have accused the Biden administration of overreach on environmental regulations and warn of a pending reliability crisis for the electric grid. The power plant rule is one of at least a half-dozen EPA rules limiting power plant emissions and wastewater treatment.
According to Regan, EPA plans to hear from stakeholders in another comment period concerning its new proposal that will include existing gas plants and take a “stronger, more durable approach” and address a range of criteria pollutants and air toxics, in addition to carbon dioxide.
The Industry Warning
According to the electric power industry, there are urgent and complex challenges to electric system reliability. The North American Electric Reliability Corporation, a reliability organization, has described these challenges as a “hyper-complex risk environment.” The new weather-dependent resources that are being built, such as wind and solar, do not provide the same critical reliability attributes as the conventional dispatchable coal and natural gas resources that are being retired. While emerging technologies such as long duration battery storage, small modular reactors and hydrogen systems may someday offer solutions to this issue, they are not yet viable at grid scale. Many dispatchable resources that provide critical reliability attributes are retiring prematurely due to environmental regulations and climate policies, which are all a part of Biden’s promise to end fossil fuels. This regulatory environment, along with prevailing investment criteria for financing new energy projects, increases the challenges to build new dispatchable generation — even if it is critically needed for reliability purposes.
While electricity demand has been flat for many years, it is expected to increase due to the electrification of other sectors of the economy. Electric vehicles are being pushed upon Americans by the Biden climate policies and regulations, and the residential and commercial sectors are increasingly using electricity for heating and cooling as Energy Department standards push competition from natural gas technologies out of the marketplace. These electrification trends will accelerate more due to the tax credits in the 2022 Inflation Reduction Act. The new demands can pose significant reliability risks if their load additions cannot be reliably served with existing or planned resources.
Conclusion
Biden’s EPA is ensuring that no new coal or natural gas plants get built in the United States by its power plant rule to be finalized in April. It is omitting existing natural gas plants currently from the rule, but plans to develop a new rule after the election that will include them and be more comprehensive regarding the control of various types of emissions. These rules will jeopardize the reliability of the U.S. electric power grid as more intermittent and weather-driven wind and solar power units are added to the grid and as more electrification takes place through Biden’s push for electric vehicles and electric heating technologies. Unless the Biden administration changes its policies, Americans can expect brownouts and blackouts and higher electric prices in the future as the back-up to wind and solar power are very expensive batteries.
