CERAWeek 2022: US Environmental Protection Agency forging ahead with plans to limit power plant GHG releases

The US Environmental Protection Agency (EPA) is moving forward with plans to limit power sector GHG emissions to meet President Joe Biden's goal to decarbonize the sector by 2035 even if the US Supreme Court decides to limit its authority.

"We don't have to overly rely on any one policy or rulemaking to achieve our mission to ensure affordable and reliable electricity" and to tackle the full array of threats that power plants pose to clean air, safe water, and healthy land, EPA Administrator Michael Regan said in remarks delivered 10 March at the 2022 CERAWeek conference by S&P Global in Houston.

The US Supreme Court is expected to issue a decision as early as April on whether EPA's authority over power plants is limited to controlling GHGs through improvements to coal-burning boilers and other related equipment, as a West Virginia-led coalition of states and coal mining companies claim. A ruling in EPA's favor would confirm its authority to recommend approaches that allow power plants—aside from seeking efficiency improvements—to average GHG reductions across units, trading, and generation shifting from coal to relatively lower-GHG-emitting natural gas or renewables.

Co-benefits as a backstop

In a press briefing following his remarks, Regan asserted EPA's authority to regulate GHGs, but added that "obviously, we are paying close attention to what the Supreme Court will say on our ability to directly control GHG emissions."

When asked whether the US can reach its decarbonizing goal by 2035 "no matter what the Supreme Court decides," Regan said EPA can always rely on co-benefits of imposing other air quality regulations that could also limit power plant GHGs.

Regan announced a series of federal actions that would involve the use of controls to limit harmful air pollution, including GHGs. These include proposals to consider revising the limits on mercury and other toxic air pollutants, a federal plan to reduce downwind smog-forming pollution from power plants and industrial plants. and revised national air quality standards for particulate matter. Later in the year, EPA also would look at GHG regulations for new and existing power plants based on the guidance it receives from the Supreme Court, he said.

He also said EPA would be releasing a white paper that would summarize the approaches new natural gas fired power plants can take to limit GHG releases.

Regan reminded the assembled audience of electric utility officials, engineers, and policy analysts that the US has witnessed "tremendous progress" in transitioning to clean energy over the past two decades.

Coal-fired generation unable to compete

The aging coal-fired fleet has been unable to compete with cheaper wind and solar that are dominating the current market, and are helping the power sector become cleaner, Regan continued.

"Today, renewable energy is the fastest-growing form of electricity," with a hundred-fold growth in solar generation and a 300% increase in wind generation since 2010, he said.

The US is expected to retire 15 to 16 GW of coal-fired capacity in 2022, according to S&P Global Energy Director Douglas Giuffre, who spoke on a CERAWeek panel about the state of electric power as it transitions to cleaner energy.

In contrast, he said, the US saw record wind, solar, and storage additions in 2020 and 2021, and "2022 looks promising."

This is despite supply chain disruptions that caused installation of 10 GW of wind, solar, and storage to be delayed.

Going forward, Giuffre said the main obstacle to greater deployment is the lack of interconnection, which the US Secretary of Energy Jennifer Granholm also acknowledged is a problem a day earlier when she addressed CERAWeek.

"There's currently 900 GW of wind, solar, storage, and other technologies that are sitting in interconnection queues around the country," Giuffre said. "To put that in perspective, the US currently has 1,200 GW of installed capacity. So that's a lot of supply that's waiting."

The US Federal Energy Regulatory Commission has made it a priority, and issued an advanced notice of proposed rulemaking to address the issue. "It's certainly something we need to tackle if we're going to get anywhere close to our goals and ambition," Giuffre said.

Posted 10 March 2022 by Amena Saiyid, Senior Climate and Energy Research Analyst

This article was published by S&P Global Commodity Insights and not by S&P Global Ratings, which is a separately managed division of S&P Global.