Environmental Protection Agency global warming policies won’t harm the reliability of the electrical grid, says a new report, because utilities and state regulators won’t let them.
In June, the EPA is expected to propose rules requiring states to lower their carbon dioxide emissions from power plants as part of President Obama’s Climate Action Plan. There have been rumblings that this could accelerate the retirement of coal-fired power plants, threatening the ability of utilities to meet power demand.
But these fears are overblown, says a new report by the Analysis Group. The report notes that “as long as states and the industry start their planning process soon, there is no reasonable basis for anticipating that EPA’s guidance, the states’ [implementation plans] and the electric industry’s compliance with them will create reliability problems for the power system.”
Electricity producers and coal states have argued that EPA rules to limit carbon dioxide emissions could imperil the electrical grid because the hundreds of coal plants being shut down will not be easily replaced. The Energy Information Administration says that 60 gigawatts of coal power will be retired through 2020, most of it retiring before 2016. The decline in coal power will be met by natural gas power as well as green energy, like wind and solar.
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The Analysis Group report says that states are in the driver seat of the upcoming carbon dioxide rules, as the EPA must work with them to reduce emissions. Thus, states and utilities can take preemptive measures to ensure lost baseload power from coal is met by other sources.
“To date, implementation of new environmental rules has not produced reliability problems, in large part because the industry has proven itself capable of responding effectively,” wrote Susan Tierney, the report’s author and former assistant secretary of Energy for policy for President Obama.
The report was commissioned by the Energy Foundation, a grant-giving organization that supports environmental activism and green energy development. Tierney is the group’s chairman of the board of directors.
Tierney says that “regulatory actions to reduce threats to public health and the environment from power generation cannot occur at the expense of reliable power supply.”
But utilities and some state regulators still worry that the EPA has not properly considered the effects of prematurely retiring coal-fired power plants, which currently produce about 40 percent of the country’s electricity.
“It’s not that simple; I think it’s wishful thinking, a little Pollyanna,” Scott Segal, director of the Electric Reliability Coordinating Council, told E&E News regarding Tierney’s conclusions.
“There’s never been a regulatory initiative of the scope and depth,” Segal added. “The reason I call it wishful thinking is that for this report to be correct, everything has to go exactly as planned.”
Coal supporters pointed to the harshness of last winter as evidence that the EPA should reconsider its climate rule. The so-called “polar vortex” that hit last winter caused massive snow and ice storms that ravaged the country and imperiled the grid by forcing power plants to shut down in the cold. Utilities were forced to run coal plants slated for shutdown next year in order to make up for the lost power generations and keep the lights on.
“This year’s historically cold winter has served as a crystal ball into our future, revealing the energy cost and electric reliability threats posed by the Obama Administration’s overreliance on a more narrow fuel source portfolio that excludes the use of coal,” said Laura Sheehan, spokeswoman for the American Coalition for Clean Coal Electricity.
One of the country’s largest utilities, American Electric Power, was running 89 percent of the coal plants slated for retirement during the winter to keep the lights on in Ohio and the Midwest. These coal plants will be shut down due to compliance costs with a major EPA regulation: the Mercury Air Toxic Standard (MATS).
The energy industry often points to MATS as an example of how the EPA does a poor job of taking grid reliability and energy prices into consideration when issuing rules. When the EPA first proposed MATS, they said it would only result in 4.7 gigawatts of coal power would retire due to the rule.
The industry said this estimate was unrealistically low and they were proven right. The Energy Information Administration estimates that 60 gigawatts of coal power will shut down, primarily due to MATS.
“There is no evidence to date that the agency has taken responsibility seriously. If there has really been a consultative process between FERC, the DOE Office of Reliability and EPA over these rules, then they have done so completely invisibly,” Segal said.
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