The EPA Threatens to Turn Out the Lights Its proposed power-plant emission rule would destabilize the energy grid and end reliable electricity. By William S. Scherman
Imagine flipping a light switch and not knowing if the lights will come on. Normally unthinkable. But the Environmental Protection Agency’s proposed power-plant rules would destabilize the energy grid, resulting in less-reliable electric service.
The EPA’s aggressive standards require all coal-fired power plants to use a new and still-tricky technology called carbon capture and storage, or CCS, to reduce greenhouse-gas emissions 90% by 2035, or begin co-firing with natural gas. In addition, natural-gas-fired plants must capture 90% of emissions by 2035 using CCS or switch almost entirely to hydrogen by 2038. The only other option for both: shut down.
These nascent technologies simply won’t get the job done in the next few years. CCS is used at only one commercial power plant in North America. The only U.S. coal plant to implement CCS successfully closed in 2020 for economic reasons.
CCS holds great promise, but there are significant operational and economic hurdles to its widespread deployment. The Biden administration recently acknowledged that building and using CCS faces many of the same permitting and regulatory problems plaguing other energy infrastructure
Likewise, while hydrogen may be a future solution for electricity generation, the science isn’t there. Hydrogen can be made by one of two methods: electrolysis, which is incredibly costly and energy intensive; or steam-methane reforming. Most hydrogen is produced by steam-methane reforming, which produces large amounts of CO2 as a byproduct and doesn’t provide a net reduction in greenhouse gases. The proposed rules all but ignore these obstacles.
Closing the dwindling number of coal-fired plants and most natural-gas-fired plants would drastically affect electric reliability. In the past 10 years, more than 100,000 megawatts of coal generation capacity was retired. In 2022 total U.S. generating capacity was only 1.2 million megawatts. Another 40,000 megawatts of coal generation is scheduled to close in the next six years. As the trend continues, natural-gas-fired generation will need to play an even larger role in keeping the lights on. The Energy Information Administration recently forecast that this summer domestic natural-gas consumption for electricity generation will reach the second-highest level on record.
The numbers don’t lie. Biden administration policies mean that higher consumption will be met with substantially lower supply. In 2022 the U.S. generated 4,243 million megawatt-hours of electricity, including 1,689 million from natural gas and 828 million from coal. If these plants close, that represents a loss of 2,517 million megawatt-hours, or 60% of U.S. electric generation.
In 2022 all U.S. renewable resources generated a mere 913 million megawatt-hours. To replace the plants these new rules would close, the U.S. would need to quadruple its renewable-energy generation in 10 years. That is to maintain present levels. It doesn’t account for rising energy demand, which is projected to triple world-wide by 2050, including for new hydrogen production and an increasingly electrified vehicle fleet. Quadrupling renewables will require hundreds of thousands of miles of new long-distance transmission lines, which are difficult to build. A multiyear backlog for energy-project interconnections means we are still years away from launching transmission projects needed to keep the lights on.
As demonstrated time and again, the EPA doesn’t have electric industry expertise. That is the purview of the Federal Energy Regulatory Commission, which is charged with keeping the nation’s electric grid reliable and functioning. A week before the EPA proposed its rules, all four FERC commissioners, Democrats and Republicans alike, told the Senate Energy and Natural Resources Committee that it isn’t possible in the foreseeable future to maintain a reliable grid without the coal and gas plants targeted by the new rules. If Republicans and Democrats agree the policy is unworkable, you know we’re in trouble.
Alarm bells have been ringing about electric capacity shortfalls that these rules would only exacerbate. The North America Electric Reliability Corp. has identified “capacity shortfalls” that may result “in high risk of energy emergencies during peak summer conditions” in an area of the nation’s midsection that covers parts of 15 states and about 45 million consumers. Part of the West covering California also faces shortfall risks due to “overall variability in both the resource mix and demand profile.” The North America Electric Reliability Corp. has repeatedly flagged winter reliability concerns for New England, in part due to “limited natural gas infrastructure.”
If the EPA’s proposed rules force reliable generating plants to close on Jan. 1, 2032, the unthinkable will happen. Whenever you hit the lights you’ll be crossing your fingers that they actually go on. After the Clean Power Plan was enacted in 2015, the EPA administrator admitted her plan was to force generators to comply—that is, close—before courts could decide if the rules were legal. The Supreme Court took note, stayed the plan in 2016, and struck it down in 2022. Regardless of the legality of the new proposed rules, plants will close if they are finalized, unless the courts act swiftly again.
We all hope for a cleaner energy future. But that will take time and thoughtful planning. It will take bipartisan support, not radical proposals. Whatever lofty goals the EPA has, they won’t keep us warm at night when the heat goes off.
Mr. Scherman is a Washington-based energy lawyer at Vinson & Elkins, LLP. He served as general counsel for FERC, 1990-93.
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