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The EPA Carbon Standards for New Power Plants: How They’ll Work and What’s Next

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On September 20, the EPA released re-proposed draft power plant carbon standards for new power plants. These standards can serve as a backstop against future emissions. Together with standards for existing power plants, due next June, this is an opportunity to curtail global warming emissions from the largest single source of these emissions in the U.S. They are also a step forward in delivering on the President’s Climate Action Plan.

What the draft standards for new fossil fuel-fired power plants say

According to these standards, new large natural gas-fired power plants must limit their emissions to 1,000 pounds of carbon dioxide per megawatt-hour (lb CO2/MWh). Smaller natural gas units must meet a standard of 1,100 lb CO2/MWh. New coal-fired power plants must meet a standard of 1,100 lb CO2/MWh.

Coal-fired power plants also have the option of meeting a standard of 1,000-1,050 lb CO2/MWh via a provision that would allow them to average their emissions over a period of seven years. This could potentially allow a plant to start out with high emissions and then install carbon capture and storage (CCS) technology later to reduce their emissions.

Very few new coal plants are being built anyway

Regardless of the EPA’s carbon standards, it’s important to remember that very few new coal plants are projected to be built anyway, according to the EIA’s latest forecast. The reason is simple: multiple market factors are making coal-fired power too expensive relative to other cheaper, less polluting options like natural gas, renewable energy, and energy efficiency.

A future for new coal plants must involve technology to capture carbon

The standard makes clear that any new coal plants built after the standard is implemented must install technology to capture carbon. A standard of 1,050 lb CO2/MWh means roughly a 40 percent capture rate for a new supercritical coal plant. Allowing a plant to average its emissions over seven years gives some flexibility to meet this standard. Research from UCS and MIT shows that, if carbon capture and sequestration (CCS) technology is to be employed, it is most cost-effective and least risky for coal plants to have the technology installed from the outset rather than to retrofit a conventional coal plant after the fact.

There are significant efforts underway to deploy CCS technology more widely, both here in the U.S. and globally. The Department of Energy has also recently announced a draft solicitation for advanced fossil energy projects through its loan guarantee program to help fund these efforts.

Whether utilities will choose to make these expensive investments will, of course, come down to market factors. The EPA has provided the option under the new carbon standards. But, frankly, I would not be surprised if cheaper alternatives, like investments in natural gas, renewable energy, and energy efficiency, prove more attractive to the industry.

Clean coal: fact or fiction?

Some industry voices have been decrying these new standards as the death of coal, which is very ironic considering that these same folks have been touting the benefits of “clean coal” for years. This is the moment for them to put their money where their mouth is.

Renewable energy and energy efficiency are key to lowering global warming emissions

Global warming emissions are at an all-time high. My colleague, Peter Frumhoff, points out that, according to the latest IPCC report, at current rates of CO2 emissions, we will hurtle past the 2° C carbon budget in less than 50 years. We need real solutions to bring down emissions drastically, and we need them fast.

Capture rates for coal need to be 90 percent or higher, which seems unlikely to happen in the near future. An overreliance on natural gas comes with climate risks as well, as a new UCS report shows. The fact remains that the only viable path forward to truly decarbonizing the electric sector is one where we significantly ramp up renewable energy and energy efficiency as quickly as possible.

Strong carbon standards for existing power plants are critical

The EPA’s next step, proposing strong carbon standards for existing power plants, is critical for lowering emissions. These standards can be designed to be flexible and cost-effective, providing incentives for renewable energy and energy efficiency to play a larger role in our energy mix. We’ve also got to implement policies to ensure a just transition for communities that currently depend on coal for their livelihood.

The EPA is organizing listening sessions around the country for the public to weigh in on the design of the standards for existing power plants. Please consider going to one near you to show your support for taking action to lower carbon pollution!

Posted in: Energy, Fossil Fuels, Global Warming Tags: , , , , , ,

About the author: Rachel Cleetus is an expert on the design and economic evaluation of climate and energy policies, as well as the costs of climate change. She holds a Ph.D. in economics. See Rachel's full bio.

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