Biden Curbs on Power Plant Pollution Collide With Demand

(Bloomberg) -- The Biden administration is cracking down on planet-warming pollution from the nation’s electricity sector, with mandates likely to encourage the closure of coal plants that advocates argue are vital to meet surging power demand.

The Environmental Protection Agency regulation unveiled Thursday will force the nation’s current fleet of coal plants to capture nearly all of their carbon dioxide emissions — or close — by 2039. And it will compel similar pollution cuts for many of the new gas-fired plants built to replace them.

Overall, the measure could further drive the nation toward emission-free renewable power and hasten coal plant closures at a time when artificial intelligence, data centers and vehicle electrification are driving up demand. Consumption at US data centers alone is poised to triple from 2022 levels, to as much as 390 terawatt hours by the end of the decade, according to the Boston Consulting Group. The dynamic has prompted warnings that electric reliability is at stake.

The measure represents one of President Joe Biden’s biggest initiatives yet to counter climate change, building on earlier regulations that target greenhouse gas releases from passenger cars, heavy-duty trucks and oil infrastructure. Power plants account for about a third of US greenhouse gas emissions, and slashing them is essential to fulfill the country’s carbon-cutting pledge under the Paris Agreement. 

“This is how we win the future,” White House National Climate Advisor Ali Zaidi told reporters, adding that accelerating renewable power deployments show “why we can be ambitious moving forward.”

“The power sector today has more tools than ever before to reduce pollution and to modernize our grid,” he said.

Critics, however, cast the rule as a threat to power reliability. 

“We’re already in a tough spot,” given warnings that 19 states are at risk for blackouts even under normal peak demand conditions, said Jim Matheson, chief executive officer of the National Rural Electric Cooperative Association. “It creates uncertainty about how we’re going to keep the lights on.”

The EPA’s greenhouse gas regulation is actually one of four rules being finalized Thursday that single out coal plant pollution — with the others slapping requirements on hundreds of coal ash ponds across the country and compelling reductions in wastewater, mercury and other toxic air emissions.  

‘Confidently Prepare’

EPA Administrator Michael Regan told environmentalists, students and activists gathered at Howard University Thursday that the approach gives the power sector information it needs to “confidently prepare for the future” without sacrificing “affordable, reliable electricity.” 

Together, the rules make clear the scale of investments required to keep operating coal-fired power plants well into the next decade. Plans have already been announced for about half of the nation’s existing coal-fired generating capacity to shutter by 2039. The new suite of rules is likely to encourage more of those closures.

The policies “rightly force the hand of all coal plants that remain: Clean up or make an exit plan,” said Julie McNamara, a deputy policy director at the Union of Concerned Scientists. 

The measure is almost certain to be challenged in federal court, following previous rulings that narrowed the agency’s legal latitude. And Republicans are preparing to push for repeal on Capitol Hill, with Senator Shelley Moore Capito of West Virginia on Thursday dubbing the plan an illegal bid “to shut down the backbone of America’s electric grid through unachievable regulatory mandates.”

The regulation includes new emergency protections meant to ensure the requirements don’t throttle electricity generation when demand suddenly surges. Gas plants will be allowed to operate under less-stringent emission rates under some emergency circumstances.

The foundation of Biden’s plan is a determination that for many power plants the “best system of emission reduction” is carbon capture systems that have been available for decades but are barely in commercial use at the sites today. 

The agency cited “multimillion dollar engineering evaluations of CCS technology at multiple US coal and natural gas plants” in justifying the approach. Government subsidies under the Inflation Reduction Act also are feeding wider interest in deploying carbon-capture technology. 

But the regulation overestimates the possible pace of carbon capture deployment, said Dan Brouillette, chief executive of the Edison Electric Institute, which represents some of the nation’s largest utilities. “CCS is not yet ready for full-scale, economy-wide deployment, nor is there sufficient time to permit, finance and build the CCS infrastructure needed for compliance by 2032,” he said. 

The EPA requirements are based around expectations that carbon capture systems arrest 90% of emissions at the sites. However, power plant owners have flexibility to use other technologies to meet the new limits. 

Coal plants that intend to keep operating after Jan. 1, 2039 will have to start using carbon capture systems or otherwise pare their emissions 90% by 2032. The EPA’s initial proposal would have set a more lenient closure date — 2040 — but compelled emission cuts two years earlier, in 2030. 

Earlier: Biden Advances Plan to Make US Freight Shipping Carbon-Free

No new emissions control requirements are mandated for coal plants that intend to close before 2032.  

Carbon capture systems — or equivalent pollution reductions — are required for gas power plants that operate at least 40% of the time as of Jan. 1, 2032. But there are effectively no new restrictions on gas plants operating less than 20% of the time, which are often called on to help meet demand spikes.

All told, the requirements will force “better decisions” by grid operators, utility managers and power companies, said Meredith Hankins, a senior attorney with the Natural Resources Defense Council. “It’s trying to shift away from that default explosion of new gas and instead think about ‘Hey, maybe we should be looking at other options to generate electricity.’”

(Michael Bloomberg, the founder and majority owner of Bloomberg LP — the parent company of Bloomberg News — committed $500 million to Beyond Carbon, a campaign aimed at closing the remaining coal-fired power plants in the U.S. by 2030 and halting the development of new natural gas-fired plants. He also started a campaign to close a quarter of the world’s remaining coal plants and cancel all proposed coal plants by 2025.) 

(Updates with comment from EPA administrator and details on repeal threat, from eighth paragraph)

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