The Biden administration’s Environmental Protection Agency (EPA) issued final regulations to cut power plant greenhouse gas emissions and pollutants Thursday that could raise more questions than answers in a time of rising demand and diminishing reliability on America’s power grid. Assuming it is upheld by the courts, the regulation will require both coal and natural gas power plants to invest millions in carbon capture and storage and other technology between now and 2032, or face being removed from the grid.
Much has been written in recent months about the electricity-gobbling nature of hundreds of new data centers and crypto-mining operations being installed around the country, along with the power needs of government-subsidized renewable energy and electric vehicle industrial plants. The North American Electric Reliability Council (NERC) stated in its current assessment that new demands on the grid during 2023 were more than triple those of 2022, and the pace only seems destined to accelerate in the years to come.
“Impartial experts and officials have warned that policies and regulations, especially the new Clean Power Plan, that are designed to force the premature closure of coal plants could trigger an electric reliability crisis,” Michelle Bloodworth, President of America’s Power, told me in an email. “Regrettably, EPA has chosen to ignore these warnings.”
Is CCS the Right Answer?
The new regulations are written under the Clean Air Act, which requires EPA to utilize the “best system of emission reduction” that has been “adequately demonstrated.” The EPA previously failed to meet this test when it published its Clean Power Plan during President Barack Obama’s second term, and the rule was eventually struck down. With this updated effort, EPA could be running the same risk again, with a requirement that plants meeting certain emissions thresholds abate them using carbon capture and storage (CCS) technology. The catch there is the requirement that the required technology be “adequately demonstrated.”
Jeff Holmstead, the head of President George W. Bush’s air office at EPA said recently that, “There isn’t a single commercial-scale gas-fired power plant anywhere in the U.S. — or as far as I know, anywhere in the world — that uses CCS to control its emissions,” he said. “This fact alone could make it hard for EPA to convince the courts that CCS has been adequately demonstrated.”
Some believe that lack of adequate demonstration of success also applies to coal plants. E&E News, part of Politico, recently documented the fact that CCS has been tried at five US coal plants so far with little success. E&E further finds that “There currently is only one power plant in the world using carbon capture at scale: the Boundary Dam Power Station near Estevan, Canada.” It will certainly be interesting to see how lawyers for the Biden administration argue the rule meets this “adequately demonstrated” test in future court cases.
Then there’s the troubling reality that powering a carbon capture operation is estimated to use 20% to 25% of electricity generated by the power plant. Thus, even if power plant lives can be extended via CCS, less power will be available to maintain grid reliability.
A Rising Grid Reliability Problem
In any event, this effort to rob the US grid of even more 24/7 baseload power generation than the 60 GW of coal Bloodworth says is already scheduled to be retired in the coming years seems risky at best. “We need more sources of dependable and affordable electricity such as coal – fired power plants, not fewer,” Bloodworth says. “New EPA rules will accelerate coal retirements. Taken together, EPA’s new Clean Power Plan and the other rules represent a clear and present danger to our electricity supply and our economy.”
For its own part, the EPA claims the new rules “will avoid 1.38 billion metric tons of carbon pollution through 2047, equivalent to the annual emissions of 328 million gas cars, and together with the other standards will provide hundreds of billions of dollars in climate, environmental justice, and public health benefits, including fewer premature deaths, asthma cases, and lost work and school days. The standards announced today will ensure that power companies use modern, cost-effective technologies to reduce pollution and protect the health and wellbeing of communities, including communities historically overburdened by pollution.” But we’ve learned over the years that estimates like these involve an array of assumptions and estimates that may or may not turn out to be accurate.
What we know to be real is that America’s system of regional power grids increasingly teeters on the brink of crisis and potential disaster. Already in the mild weather month of April, grid managers in Texas at ERCOT were forced to issue a warning on April 15 citing concerns of inadequate generation capacity to meet peak demands. ERCOT issued a similar warning Thursday citing similar concerns for April 29-May 1 that was later rescinded. These warnings involved days when high temperatures across the state were forecast to hover in the mid-80s to high-80s. What will happen this August, when the entire state sees highs well above 100 degrees, a normal, frequent event for that month?
The Bottom Line
The advisability of writing regulations designed to force even more reliable, affordable coal generation off the grid is already questionable. But a regulation designed to now deny grid managers an untold number of gigawatts of natural gas capacity appears to verge on a regulatory death wish.
As with previous Obama and Biden rules related to emissions, the goal with this regulation appears less about enforcing the law and more about an effort to achieve the administration’s GHG climate goals by rendering a high percentage of America’s baseload power generation fleet too expensive to continue operating.
Tim Stewart, President of the US Oil and Gas Association, summarized it bluntly in an email, saying, “What is important [to the White House] is trying to achieve their climate goals regardless of the law. The intent is to force movement away from fossil fuel production by regulation or a protracted legal process. They fully intend to wait the industry out.”