Dive Brief:
- Coal-fired power plants may have to close, according to American Electric Power Co., If the Environmental Protection Agency (EPA) pushes ahead with a 25% CO2 emissions cut for existing power plants by 2030 compared to 2012 levels, American Electric Power (AEP) may be forced to retire some of its coal-fired power plants.
- If such a "very aggressive" EPA rule were proposed, AEP "would see that as a particular challenge," CEO Nick Akins told Bloomberg.
- Because AEP has already reduced CO2 emissions by 21% since 2005 by converting coal plants to natural gas, meeting a 25% emissions reduction target based on 2005 levels would be nearly impossible, according to Akins.
Dive Insight:
Early reports suggest the EPA is planning a 30% by 2030 CO2 emission reduction based on 2005 levels, which would likely alleviate many of AEP's concerns.
The new emissions standards could cost the economy billions and force more than a third of all coal-fired plants to close down, according to a report by the U.S. Chamber of Commerce. However, a report by the Natural Resources Defense Council found that the changes can save consumers $37.4 billion in bills by 2020, and create nearly 300,000 jobs from energy efficiency investments.
AEP, and many other coal-burning utilities, will be watching closely on Monday as the EPA unveils its long-awaited draft rule.
