Canary Media reports on the U.S. Environmental Protection Agency's new rules pushing utilities to retrofit fossil-fuel plants with new technologies or swap them out for clean energy alternatives, quoting United's President and CEO Heather O'Neill on the opportunity the rules present for utilities to pivot to advanced energy solutions.
On Thursday, the Biden administration issued rules to dramatically reduce carbon emissions and pollution from U.S. power plants, while top officials weighed in with an important message: Clean energy is more than ready to supplant the fossil-fueled power plants the new regulations are intended to curb.
The long-awaited rules, the result of nearly a year of work at the U.S. Environmental Protection Agency, will require individual states to craft plans for ensuring that coal-fired plants slated to stay open past 2039 control 90 percent of their carbon pollution from 2032 onward. Newly built “baseload” fossil-gas-fired power plants that operate more than 40 percent of the year must do the same.
These mandates would help slash emissions from the power sector, which currently accounts for about one-quarter of the country’s carbon footprint. EPA estimates the rules will avoid nearly 1.4 billion metric tons of carbon pollution through 2047, equivalent to the annual emissions of 328 million gas cars.
“By developing these standards in a clear, transparent, inclusive manner, EPA is cutting pollution while ensuring that power companies can make smart investments and continue to deliver reliable electricity for all Americans,” said EPA Administrator Michael S. Regan.
Power plant operators affected by the rules have essentially two pathways to stay in business: Retrofit their facilities with technologies that can prevent 90 percent of emissions, like carbon capture, or swap out their fossil-fired assets for clean power installations.
Regan and other top Biden administration officials disputed criticisms, claiming that carbon-capture technology supported by federal incentives can meet the needs of power plants on the timeline the rules set out. But they also stressed the appeal of the other path forward for the power sector: clean energy.
Ever-cheaper solar panels, wind turbines, lithium-ion batteries, and other carbon-free technologies, combined with hundreds of billions of dollars of federal backing from the Inflation Reduction Act, have made clean power both the lowest cost and most reliable option for the future, they said.
Supporters of the rules, which were first proposed in May 2023, echoed that message, describing them as a baseline that can speed up the transition for utilities, many of which have already pledged to achieve carbon-free or “net zero” carbon energy between 2040 and 2050.
“The federal standards lay a good floor, and state policy and state regulations help raise the ceiling,” said Heather O’Neill, president and CEO of clean energy industry trade group Advanced Energy United. “As we see increasing energy demand, we have a suite of technologies that can meet that demand, and do so in a way that’s cost-effective, that’s reliable, that provides grid resilience, and that’s clean.”
The rule’s opponents are certain to mount intense legal challenges, throwing the future of the rules into question. A lawsuit could set up another clean power showdown at the U.S. Supreme Court, which in 2022 blocked a previous power plant rule from the Obama administration. But in the meantime, states, utilities, and regulators will need to start planning for the rules to become a reality.
Providing a “backstop” to IRA subsidies
To be clear, the new EPA rules are not “what’s driving the changes in the power sector,” said Frank Sturges, an attorney with the nonprofit group Clean Air Task Force. Instead, “you’ve got Inflation Reduction Act incentives and you’ve got market forces” doing that work, he said.
The climate law’s tax credits have bolstered the already competitive economics of clean energy, making it less costly than newly built gas plants across most of the country, according to analysis from nonprofit groups and industry analysts. Meanwhile, coal-fired power, already struggling against competition from cheap fossil gas, is now uncompetitive against clean energy and energy storage in almost every part of the country, according to analysis by think tank Energy Innovation.
Amid these fundamental shifts in the economics of clean energy, the new EPA rules “work as a backstop for a lot of the incentives that Congress has put in place,” Sturges said.
That backstop is a tool that federal regulators can use to push utilities and state regulators to more rapidly shift away from fossil fuels. Analysis from the Sierra Club has found that a majority of U.S. utilities, including many that have set carbon-cutting goals ahead of state mandates, are moving far too slowly to meet the Biden administration’s goal of a zero-carbon grid by 2035.
EPA’s new carbon emissions rules are accompanied by additional rules on other emissions like mercury and toxic power-plant wastewater discharge that will also force the country’s remaining coal plants to “clean up or make an exit plan,” Julie McNamara, a senior analyst and deputy policy director of the Climate and Energy Program at the Union of Concerned Scientists, said in a statement.
“It’s untenable that coal-fired power plants have gone so long without carbon limits despite their staggering climate toll,” she said.
About 70 percent of the country’s coal fleet has closed over the past decade, pushing coal’s share of electricity generation down to a record low of 16 percent last year. The new rules set hard deadlines to clean up the remainder of the country’s coal plants, including those in coal-friendly states like Wyoming and West Virginia, which have made burning coal a policy priority.
Questions about grid reliability and gas-fired power plants
The rules come as utilities across the country are seeking to build massive fleets of new gas-fired power plants to meet fast-growing demand for electricity. Many utilities and regulators are concerned that a combination of fast-growing power demand and increasing coal retirements raises the risk of grid outages during extreme weather events. They point to new gas plants as the solution.
But O’Neill of Advanced Energy United cited analysis from federal investigations into major grid outages during winter storms in Texas in 2021 and in the U.S. Southeast in 2022 that found they were largely attributable to cold-weather-related problems at fossil-gas power plants’ pipeline networks.
“There’s this outdated view that gas plants have superior reliability to advanced energy solutions,” she said. “When you put clean technology solutions together, they create a more reliable and resilient grid.”
The path to compliance
In the meantime, states are now under pressure to begin crafting plans to comply with the new rules, particularly as they apply to existing coal-fired power plants, Sturges said. The regulation gives states 24 months to develop those plans, and another year for EPA to review and either accept or reject them. The rules for new gas-fired power plants will follow a different course, with EPA developing standards to be applied by states.
The new rules are technology-neutral, but the assumption — both from the EPA and analysts — is that power plant owners will look to carbon capture and sequestration (CCS) technology to comply. They can also attempt to curb emissions by switching power plants to run on hydrogen, ammonia, or other carbon-free fuels.
Utilities have long cited CCS technology as a cornerstone of their low-carbon planning. But it’s far from clear if the technology is capable of reducing power-plant carbon emissions by 90 percent in a cost-effective way. Billions of dollars of Department of Energy funding directed at power plant CCS projects in the 2010s failed to yield a single successful demonstration; the only project that was actually completed shuttered in 2020 after a track record of mechanical problems and financial overruns.
Climate activists and energy analysts skeptical of CCS have pointed to this two-sided stance from utilities as evidence that the best course for combatting power-sector carbon emissions is to avoid costly retrofits altogether and to instead replace fossil-fueled power plants with clean alternatives.
Combining clean energy solutions — scaling up renewable energy and batteries, expanding transmission grids to allow power to be transferred between regions, and investing in energy efficiency and technologies that shift when customers use power to reduce peak grid stresses — are more complicated for utilities, regulators, and grid planners to handle than relying on the century-old system of large central power plants. But they’re also the better solution to the climate, cost, and reliability challenges the country faces, McNamara of the Union of Concerned Scientists argued.
And the new rules, even with legal challenges looming, might just be enough to force utilities to take a clean energy future seriously — many of them for the first time.
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