Dive Brief:
- The Environmental Protection Agency may need to provide more flexibility to generators, states and others in its proposed rule to cut greenhouse gas emissions from power plants, Joseph Goffman, EPA principal deputy assistant administrator for the Office of Air and Radiation, said Thursday during a grid reliability technical conference held by the Federal Energy Regulatory Commission.
- The EPA is continuing to meet with the Department of Energy, FERC, the North American Electric Reliability Corp., regional transmission organizations, power providers and others about the proposal, according to Goffman. “We’re in the fifth inning of the process,” he said. “There’s still a lot of work we must do on the path to finalizing the rule.”
- Two key issues that have emerged from comments on the proposal are its compliance timelines and what happens if carbon capture and hydrogen technologies aren’t available to meet them as well as the need for more details on options states could use to develop plans for meeting the proposal’s requirements, Goffman said.
Dive Insight:
Views ranged among panelists at the conference on how the EPA’s proposal on power plant carbon emissions might affect grid reliability.
“EPA’s proposal is unlawful and unworkable,” Anthony Campbell, East Kentucky Power Cooperative president and CEO, said, also speaking for the National Rural Electric Cooperative Association. The proposal will be “disastrous” for reliability and is not salvageable, he said.
The EPA’s compliance schedule, which begins taking effect in 2030 for some resources, is “way too short,” Campbell said. “We need more time to get to the new technology.”
The proposal, when combined with other environmental regulations, will lead a significant number of coal-fired power plants to retire, partly because of its “unrealistic” deadlines, said Michelle Bloodworth, president and CEO of America’s Power, a trade group for owners of coal-fired power plants.
In the near-term, the rule will have a chilling effect on investments in fossil-fueled power plants, according to Julie Fedorchak, a commissioner on the North Dakota Public Service Commission. The EPA’s assessment that carbon capture and sequestration and low-carbon hydrogen will be available for certain power plants “doesn’t reflect reality,” she said.
On the other end of the spectrum, Susan Tierney, senior advisor at consulting firm Analysis Group, said the EPA’s plan wouldn’t hurt grid reliability, in part because it contains flexible compliance provisions.
“There are reasons to be assured that this new EPA rule will not jeopardize electric system reliability,” Tierney said, pointing to a report she released on Nov. 7 assessing the proposal’s effect on reliability.
Driven by low natural gas prices, the U.S. coal fleet is already moving into usage patterns that underpin some of the proposal’s regulations, according to Tierney.
“The grid can absolutely be reliable under the proposed EPA rule but we will need to plan and take action to ensure grid reliability is maintained,” said Ric O’Connell, executive director for consulting firm GridLab.
The proposal could improve grid reliability by creating regulatory certainty for power plant owners and grid planners, he said. Also, new resources can provide “essential reliability services” that are offered by fossil-fueled power plants, he added, echoing a finding in an Energy Innovation report on EPA’s proposal released this week.
Given its ongoing shift away from coal-fired generation, Colorado doesn’t expect to be affected by the EPA’s proposal, according to Will Toor, executive director of the Colorado Energy Office.
Under a least-cost plan, Colorado expects its generating fleet will mainly consist of wind and solar — in the $20/MWh to $30/MWh range — and energy storage, possibly including long-duration storage, by 2040. The state expects gas-fired generation will account for 2% of its power production by that year, he said, citing a study conducted by Ascend Analytics.
During the conference, FERC Commissioner James Danly said he was concerned the proposed rule could lead to “disorderly” power plant retirements with inadequate power supplies to replace them.
If a final EPA rule includes flexibility and clarity that state air regulators are seeking, and if RTOs, NERC and FERC can supply them with clear signals about the best path for power plant retirements, “there's a good shot that we're going to see something much more orderly than a worst case scenario,” said Miles Keogh, executive director of the National Association of Clean Air Agencies.
