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Carbon Standard Will Hit Electric Reliability, Critics Charge

September 23, 2013 By Tamar Wilner

Power plants and electricityCritics have charged that the EPA’s carbon standards for new power plants, released on Friday, will reduce electric system reliability.

New coal-fired units would need to meet a limit of 1,100 pounds of CO2 per megawatt-hour under the rules introduced Friday. New large gas-fired power plants would be limited to 1,000 pounds of carbon dioxide emissions per MWh and new small gas-fired turbines to 1,100 pounds of per MWh.

Although the EPA has slightly relaxed the standard for coal, compared to the draft rules it released in April last year, some critics charged that the regulations effectively outlaw the building of new coal-fired plants. “President Obama and his EPA have once again moved forward with an extreme regulation that makes it illegal to build a coal-fired electricity plant in America,” said Rep. Ed Witfield (R-KY), chairman of the energy and power subpanel of the House Energy & Commerce Committee. 

According to Bloomberg, the rules will effectively ban the construction of coal plants that don’t use carbon capture and sequestration. And the expense of this relatively new technology is part of why critics like Rep. John Shimkus (R-IL) say new coal-fired plants are out of the question.

But the Washington Post dismissed the predictions that Friday’s rule, in and of itself, will mean major changes for the US energy mix. “Few coal plants were going to be built anyway and modern natural-gas plants can already meet the standard without needing many changes,” Brad Plumer argued on the newspaper’s WonkBlog.

Instead, he said, the rules are significant because they set the stage for regulations of carbon emissions from 6,500 existing power plants, and also because they could ease or hinder the development of carbon capture technology. The EPA plans to issue proposed standards for existing power plants by June 2014, and finalize them a year later.

That appears to be what most troubles the Electric Reliability Coordinating Council, a coalition of energy companies.

“Coal is the largest source of electric power, representing almost 40 percent of power generation in the first half of this year,” the ERCC said. “So, EPA regulations that hamper or stifle innovation in the coal-powered sector represent a profound threat to the future of energy security, electric reliability, and job creation in the United States.”

The new rules, along with the low price of natural gas, have weakened the outlook for coal and scuppered several auctions by the federal government. A recent auction drew the lowest top bid in 15 years – $35 million, or 21 cents a ton, less than a fifth of what mining companies paid for similar deposits last year, Bloomberg reports. The government cancelled the sale.

“The bottom has just dropped out of the market,” Mark Northam, director of the University of Wyoming School of Energy Resources, told the news service. “This represents a high degree of uncertainty about whether coal will stay robust in the future.”

Picture credit: EPA


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