EPA’s No-Win Rule for the Electricity Grid
Recently, the Environmental Protection Agency (EPA) issued a 1,020-page rule to control carbon dioxide emissions from existing coal-fired power plants and new natural gas-fired power plants. The rule is part of the administration’s plan to shut down coal-fired power plants in the U.S. and impose its will on the nation’s electricity system. This is the same approach the Obama administration attempted in 2015 with its Clean Power Plan but was stopped by the U.S. Supreme Court. That’s why many refer to this new rule as the Clean Power Plan 2.0 and the reason 27 states have filed suit to stop EPA from implementing the rule until it can be overturned by the courts or disapproved by Congress under the Congressional Review Act.
COMMENTARY
EPA could have issued a rule without jeopardizing the reliability of the electricity grid and driving up electricity costs, which polling shows far outrank a transition to so-called clean electricity as a priority among voters. However, the Clean Power Plan 2.0 does exactly this.
Electric reliability means having a dependable supply of electricity, especially when electricity demand peaks. EPA claims that its analysis shows the rule will not cause reliability problems. However, the model EPA uses to predict the future assumes that new sources of electricity can be easily built to replace retiring coal-fired power plants and that new transmission lines will be added without any problems in order to connect these new electricity sources to the grid. The problem-free future naively predicted by the model is not the way the real world works.
Coal is one of our most dependable sources of electricity. Wind and solar power are the least dependable because there is no guarantee the wind will be blowing or the sun will be shining when electricity is needed. According to the yardstick used by electricity grid operators, coal-fired power plants are three times more dependable than wind facilities and six times more dependable than solar facilities. Coal-fired power plants are also more dependable than battery storage because batteries can produce electricity for only a few hours at a time.
PJM manages the electricity grid in all or parts of 13 mostly eastern states plus the District of Columbia and is responsible for ensuring a reliable supply of electricity for more than 65 million people. According to PJM, power plants targeted by the rule “provide a critical reliability role … [I]n the very years when we are projecting significant increases in the demand for electricity, the [new EPA rule] may work to drive premature retirement of coal units that provide essential reliability services …”
The EPA rule gives coal plants three no-win choices. The first forces utilities to shut down coal plants before 2032 if they don’t want to pick between two even worse options. This forced-closure option eliminates a highly dependable source of electricity even though electricity demand is exploding, as PJM pointed out.
The second choice is to burn a mix of natural gas and coal, but this requires modifying power plants and adding more natural gas pipelines, which can take years to build because of approvals and public opposition. The Federal Energy Regulatory Commission (FERC) would be responsible for approving many of these new pipeline projects, but FERC is taking longer to approve fewer gas pipeline projects than it did several years ago. Hypothetically, if all coal plants chose this option in order to continue operating for an additional seven years, FERC would have to approve more than 30 new gas pipeline projects each year to satisfy the increased demand for natural gas, whereas FERC was able to approve only five projects last year. This option also exposes ratepayers to volatile natural gas prices which can increase four-fold or more during extreme cold weather.
The third choice facing coal plants is to install carbon capture and storage (CCS) technology by 2032, even though no coal plant in the world has shown that it can meet EPA’s 90% emissions reduction requirement, or the deadline set by EPA for building CCS projects. In addition, the cost of CCS is somewhere in the range of $2 billion or more for a single coal plant, depending on its size. Performance and cost are not the only obstacles because utilities must find or build pipelines to transport carbon dioxide to often distant locations where it can be stored deep underground. Plus, there is the possibility, if not likelihood, of local opposition to transporting carbon dioxide and storing it underground.
These no-win choices are even worse than they sound because utilities, utility commissions, electricity grid operators, and state environmental agencies are forced to spend time and money to make multi-billion-dollar decisions within the next two years, as required by the rule, and then incorporate those decisions into federally enforceable plans that must be submitted to EPA for approval.
The Clean Power Plan 2.0 is a no-win plan for the nation’s electricity system, so let’s hope the courts overturn the rule or Congress disapproves it.
—Michelle Bloodworth is president and CEO of America’s Power.