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EPA: Insurance for a Cleaner Future

This piece originally appeared in the National Journal Energy and Environment Experts Blog.

EPA’s newly proposed standards are an important step toward addressing the threat of unmitigated carbon pollution in altering the climate. EPA’s action will ensure that power suppliers consider greenhouse gas emissions before building any future power plants. Moreover, this lays the groundwork for future U.S. policies and action to address climate change.

The proposed standards set an emissions standard of 1,000 pounds of carbon dioxide per Megawatt-hour— slightly more carbon intensive than combined cycle natural gas plants built today. New coal units could comply with the regulations by committing to capture and store a portion of their carbon dioxide emissions or, where feasible, by using waste heat through combined heat and power systems.

These standards would reinforce recent trends in the electricity sector that point towards lower carbon sources. In their latest Annual Energy Outlook, the U.S. Energy Information Administration (EIA) projects few new unplanned, uncontrolled coal plants through 2035. (Unplanned units are new builds projected by the model. Planned units, in contrast, are those that have commenced construction.) This continues the trend we have seen in recent history, where less than 7% of U.S. electric generation capacity built since 1990 has been coal.

However, current trends and projections are not a guarantee for the future. With a rapidly aging fleet of electric generators moving towards retirement (more than a quarter of fossil fuel fired plants are more than 40 years old), these guidelines provide important insurance that the trend toward building lower carbon power plants will continue.

EPA has struck a good balance. The new standards provide businesses with greater certainty about the rules of the game moving forward. As PSEG Chairman and CEO Ralph Izzo said these regulations “provide the industry with much needed regulatory certainty.”

Similarly, in a statement, a group of electric generation and distribution companies, known as the Clean Energy Group, said that “based on our review of recent projections by the U.S. Energy Information Administration and current market dynamics, the proposed GHG performance standards for new sources will not impact the reliability of the electric system.”

Some have suggested that decisions about America’s energy are best left to Congress. But, Congress had an opportunity to set a course for national energy and climate policy in 2010, and they were unable to find common ground. Thus, we need EPA to use its authority under the Clean Air Act, an authority that was affirmed by the Supreme Court.

Ultimately, more needs to be done to reduce emissions from the power sector. WRI’s analysis suggests that there are considerable opportunities here to reduce emissions under existing federal and state authority, including regulation of existing power plants under the Clean Air Act, efficiency standards and investments, and state-level renewables requirements. Additional action at the federal level, through a clean energy standard and other approaches, could drive further reductions. Doing more in the power sector and beyond will be essential if the U.S. is going to meet its commitment of reducing emissions 17% below 2005 levels by 2020.

EPA’s action on new plants is important as it moves the United States farther along a path toward a low-carbon future.

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