The amount of coal-fired power capacity slated to shut down due to federal environmental regulations has more than doubled since 2011, according to a report from the free-market Institute for Energy Research.
New Environmental Protection Agency rules to limit carbon dioxide emissions from power plants, along with past rules requiring power plants to install costly upgrades or shut down, will force 72.7 gigawatts of power capacity to shutter across 37 states in the coming years. This figure includes power capacity already taken offline as a result of the rules.
In 2011, IER predicted EPA rules would only shutter 29 gigawatts of power — meaning EPA rules have put an additional 44.4 gigawatts of electrical generating capacity in jeopardy in just three years. A whopping 94 percent of these retiring plants are coal-fired.
“President Obama’s plan, written by the [Natural Resources Defense Council] and blessed by the Sierra Club’s ‘Beyond Coal’ campaign, will needlessly pick the pockets of hard working Americans in the form of higher electricity prices.” IER President Thomas Pyle said in a statement.
IER’s analysis shows that EPA rules are shuttering enough power generating capacity to 44.7 millions homes, enough to power every home in every state west of the Mississippi except for Texas. Federal and state regulators have worried that so many shutdowns will imperil the electrical grid’s reliability.
“These shutdowns will send electricity prices through the roof—inflicting the most harm on the elderly, the poor, those on fixed incomes, businesses, families, schools, and hospitals,” Pyle said. “These shutdowns also threaten the reliability of our grid and will cost thousands of Americans their jobs.”
The main culprits behind power plant shutdowns are the EPA’s Mercury Air Toxics Standard (MATS), the proposed Cross-State Air Pollution Rule (CSAPR) and its newly unveiled Clean Power Plan which cuts carbon dioxide emissions from power plants.
The EPA originally predicted in 2011 that MATS and CSAPR would only shutter 9.5 gigawatts of power generation, mostly from coal plants. The EPA’s new carbon dioxide rule is predicted to shutter 46 to 49 gigawatts of coal power and increase retail electricity prices 6.5 percent by 2020.
Past Energy Department estimates have shown the EPA’s predictions have lowballed power plant retirements. DOE’s 2012 estimates said that 9 gigawatts of coal power would shutter in 2012 alone and a further 10 gigawatts of coal power would shutter in 2015 due to EPA rules and poor economics.
Now DOE says that 10 gigawatts of power were taken offline in 2012 alone and 60 gigawatts of coal power will be shuttered by 2020. But DOe also notes a more disturbing trend, coal plants that will shut down in the future will be bigger, more efficient plants.
“Units that retired in 2010, 2011 or 2012 were small, with an average size of 97 megawatts … and inefficient,” DOE notes. “In contrast, units scheduled for retirement over the next 10 years are larger and more efficient: at 145 MW, the average size is 50 percent larger than recent retirements.”
IER’s power capacity retirement estimate is more than seven times what the EPA originally predicted. When IER’s estimates are combined with EPA’s Clean Power Plan estimates, a whopping 121.7 gigawatts of power could be shuttered because of environmental regulations.
The Winds Of Winter Are Coming And We’ll Have Less Coal
A major concern about these power plant retirements for utilities and grid operators is reliability. Already, some state and federal officials have voiced concerns that EPA rules will be taking too much coal off the grid too fast, imperiling reliability.
Last winter, colder than normal weather and furious snow storms put parts of the country at risk of losing power and heat as temperatures dropped. As coal plants shut down fewer will be left to pick up the slack when winter weather boosts power demand, a troubling thought for grid regulators.
“We’re closing an enormous amount of coal generation, through a variety of rules, and a good number of those plants are set to retire next April,” Philip Moeller, chairman of the Federal Energy Regulatory Commission, told Platts Energy Week. “But most people would say about 90% of that capacity was running and used and necessary during the polar vortex events.”
“So the question is: Are we going to have mild weather for the next 2 t0 3 years? If so, we can probably get through it,” Moeller said. “But if we have more extreme weather events, like we had this winter, and that power is no longer available, we could be in a real situation that’s not good for consumers.”
But the National Oceanic and Atmospheric Administration (NOAA) predicts this winter will be warmer than last for most of the country, which means people’s energy bills will be lower than last winter. However, NOAA was not able to predict how extreme last winter would be — the Farmer’s Almanac was actually more accurate in last year’s weather prediction.
“Temperatures are forecast to be warmer than last winter and that means less demand for heat,” Adam Sieminski, ahead of the DOE’s Energy Information Administration, said in a statement.
Despite the predicted respite from high energy prices and low temperatures, critics of EPA rules have said the country can’t survive on the hopes winters won’t get colder.
“The Polar Vortex caused 50,000 megawatts of power plant outages,” said Alaska Republican Sen. Lisa Murkowski. “For one key system, 89 percent of the coal capacity that is slated for retirement next year because of an EPA rule was called upon to meet rising demand. Think about that. We had a tough winter and coal facilities were able to step up.”
“The question we should be asking is, what happens when that capacity is gone? Hoping for a mild winter isn’t a viable strategy. We can’t have a-hope-and-a-prayer policy,” she added.
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