Sunday, May 14, 2023

EPA’s Proposes New CO2 Limit for Power Plants

The U.S. Environmental Protection Agency (EPA) took another shot at regulating the amount of carbon dioxide that can be emitted from fossil fuel power plants with the announcement of the new proposed rule last week. EPA’s proposed rule comes less than a year after the Supreme Court ruled in West Virginia v. EPA that EPA cannot set a greenhouse gas source standard based on generation shifting. However, the opinion was widely interpreted to affirm the EPA’s ability to regulate carbon dioxide emissions at new and existing power plants.

So, that is the approach of the new regulation which lays out a range of proposed requirements for power plants that are fueled by natural gas or coal. This new rule will be challenged in court for its reliance on new and unproven technologies to meet emissions goals that are intended to force the closure of more coal-fired power plants and limit the use of gas-powered electricity. I have a particular interest in this because the expansion of the data center industry in Virginia has taken control of the demand for electricity here. In the next decade it is forecast that data centers will account for more than half the electricity used in Virginia and has made all Virginians dependent on the fossil fuel generated power from West Virginia and Pennsylvania as well as our own fossil fuel plants.

To comply with the new rule large coal-fired power plants that plan to operate beyond 2040 would need to use carbon-capture and sequestration technology (CCS) to reduce their emissions by 90%. “Major” gas-fired plants could either utilize CCS or transition to clean hydrogen  as a fuel source to meet emission reductions. Section 111 of the Clean Air Act under which this rule is being promulgated allows EPA to regulate pollutants from stationary sources through the “best system of emission reduction” that is “adequately demonstrated.” These technologies may not meet that standard in the here and now.

Installation of controls such as CCS for coal and gas plants, and low-GHG hydrogen co-firing for gas plants are reported by the EPA to be more cost-effective for power plants that operate at greater capacity, more frequently, or over longer time periods. The proposed standards and guidelines take this into account by establishing standards for different subcategories of power plants according to characteristics such as their capacity, their intended length of operation, and/or their frequency of operation. This would seemingly allow the existence of emergency peak load generation for weather extremes or other disruptions.

EPA’s argument makes sense, since usually, there are economies of scale; but none of these types of plants exist. These mandated technologies have not yet proven economical at scale.  In addition, the need for pipelines to move the carbon captured for permanent  storage or use is not addressed. These technologies are not yet a proven option. The proposed rule is more than 600 pages long and I have not read it all. I will leave that to the Utilities and Virginia Energy.

EPA will accept comments on these proposals for 60 days after publication in the Federal Register. EPA will also hold a virtual public hearing and will make additional information available on their website. Registration for the public hearing will open after the proposal is published in the Federal Register.

In the legal Challenges that will follow the core questions will be whether CCS is an economically viable technology or has this EPA rule been designed to push electric utilities away from fossil fuels and towards cleaner energy sources. The challenges will be filed soon enough.

It is becoming clear that decarbonization will have an impact on the quality of our lives and grid reliability. We are not yet capable of having unlimited green energy available 24/7. We need to have an honest discussion of costs, sacrifices in quality of life and standard of living and the real benefits to the planet that this will bring. None of this is free and all wealth is limited. We may increase economic disparity for environmental disparity.

EPA states in the rule that “The proposals would also result in cutting tens of thousands of tons of particulate matter (PM2.5), sulfur dioxide, and nitrogen oxide, harmful air pollutants that are known to endanger people’s health, especially in communities that for too long have disproportionally shouldered the burden of high pollution and environmental injustice. In 2030 alone, the proposed standards would prevent:

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