Report: EPA to rescind Obama-era carbon rules for new coal plants

Dive Brief:

The Environmental Protection Agency on Thursday will rescind emissions rules set by the Obama administration that require new coal plants to install costly technology that captures carbon pollution, according to multiple media reports Tuesday.
EPA's current New Source Performance Standards (NSPS) for coal plants require that new generators emit no more than 1,400 pounds of carbon dioxide per megawatt-hour of power, but the New York Times reports the agency will raise that limit to 1,900 pounds.
The rule change is not likely to spur investment in new U.S. coal plants, which are challenged by cheaper natural gas and renewables, but it reflects the Trump administration's push to boost the domestic coal sector and weaken climate regulations across the economy.

Dive Insight:

While there are no new coal plants under construction in the U.S. today, the EPA's decision to lift emissions caps for new generators is the latest installment in the Trump administration's efforts to spark a comeback for the sector.

The EPA has already moved to rescind Obama-era rules on carbon and mercury emissions from existing and modified generators, as well as regulations on coal ash, a toxic byproduct of burning coal.

Alongside those efforts, the Department of Energy has boosted research into coal technologies, including a new initiative for small, modular coal plants.

Rolling back the Obama administration's New Source rules would remove another regulatory hurdle for new generators. The standards, finalized in 2015, set emissions limits for large coal generators at a level that could not be achieved without carbon capture and storage (CCS) technology.

Those limits were a frequent point of contention for coal generators and conservative states, who argued in a legal challenge that CCS technologies are costly and not commercially available. Last April, the D.C. Circuit Court of Appeals suspended the case against the NSPS after EPA said it was revising the rule.

Even with the regulatory rollbacks, utility leaders say they are unlikely to invest in new coal generation because it is still more expensive than natural gas and renewables.

"The forward curve for natural gas looks exceedingly attractive," Tom Fanning, CEO of Southern Co., a major coal plant operator, told Utility Dive in August after the EPA moved to rescind the Clean Power Plan — an Obama-era rule for existing coal plants. He said that despite deregulatory efforts, Southern would stick to its goal of being "low to no carbon” by 2050.

Southern's transition away from coal represents a trend across the U.S. utility sector. Analysts expect 2018 to be a record year for U.S. coal plant retirements and the lowest year for coal consumption by the power sector since 1979.