It also underscores the sweeping scale of action required to shift away from fossil fuels, from subsidies to regulation and new infrastructure spending. Administration leaders say they are on course to meet the climate goal Biden set three months after taking office, but completing these power plant regulations — and another one for cars and trucks — is a must.
“This reinforces our trajectory in a critical sector of the economy,” White House national climate adviser Ali Zaidi told reporters in a call on Wednesday. “We are moving even faster and … with greater certainty.”
Power-sector emissions have dropped by more than a third since 2005, but must decline much faster for the country to hit the 2030 target.
The new, tighter limits would prevent more than 600 million metric tons of carbon dioxide from entering the atmosphere between 2028 and 2042, according to the EPA, equal to eliminating the emissions from half of all the cars nationwide. They would push all existing coal-fired plants by 2040 to either close, shift to cleaner fuel or capture their carbon dioxide emissions at the smokestack, the agency said.
The shift would give consumers better access to clean power as more cars, home-heating systems and businesses are switching from fossil fuels to run on electricity. But the plan relies on clean-energy technology with a limited track record, and some fossil-fuel advocates warn the administration’s push may drive coal- and gas-fired plants off the grid, worsen an ongoing wave of power shortages and blackouts, and potentially raise prices.
The announcement comes after years of turmoil at the EPA over how to craft power plant standards that can survive the types of legal challenges that brought down the Obama administration’s Clean Power Plan. The Biden administration is under pressure to finish this work in a little more than a year, to make it harder to reverse should the president lose reelection.
To bolster its chances in court, and ease any risk to reliability or consumers, the rules tighten emissions limits at each individual unit — a long-accepted approach under the Clean Air Act — and phase in gradually, with many of the most aggressive requirements coming only in the 2030s. The standards do not require specific types of technology, but instead set limits so stringent that fossil-fuel-burning plants would probably have to use new carbon-capture systems or switch to other fuels such as hydrogen to comply.
The agency says in its proposal that carbon-capture and hydrogen systems have proven effective and affordable in what so far has been limited use. Any new gas-fired plants and existing gas-fired plants that run most of the time — often called “baseload power” — would effectively have to have carbon-capture systems or burn hydrogen.
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While many environmental groups and the largest utilities are likely to support the plan, fossil-fuel and mining interests, and some smaller power producers, are already fighting it. They question whether the plan exceeds the EPA’s authority and its premise that carbon-capture systems are effective and affordable. And they are likely to get support from several Republican-led states that have threatened to fight the Biden administration in court.
“What is adequately demonstrated and economically viable … is something that’s potentially vulnerable” legally, said Rich Nolan, president and chief executive of the National Mining Association, which represents coal producers among other miners, in a phone interview. “So we and our allies will be looking at this rule specifically when it becomes public on Thursday.”
The EPA’s analysis that power companies can afford this new technology rests partly on recent government subsidies. The bipartisan infrastructure spending package of 2021 included nearly $18 billion combined for carbon-capture and hydrogen systems, and last year’s climate-spending package, the Inflation Reduction Act, is providing billions more in tax credits for electric generators and industrial companies that use or supply them.
The Edison Electric Institute, which represents most of the nation’s biggest power companies, wrote to the EPA in February that these technologies face many challenges in scaling up but should be able to over time because “government and industry are investing.”
“With that investment, there is reason to be optimistic that these challenges will be overcome in this decade,” the group said.
And the proposal does give years for a gradual transition, EPA officials say, to give utilities ample time to plan and build the systems they need. Before 2030, existing gas plants that run frequently only have to deploy more conventional technology to run more efficiently. Plants built after the rules go into effect and that run only intermittently or just when demand peaks — so-called peaker plants — have even more lenient standards. Existing peaker plants face no new standards at all in the proposal, although the agency is asking for public comment on what types of requirements it might consider for those plants.
Some climate advocates have already said they will be pushing for the administration to speed up these deadlines. President Biden has promised to eliminate power-sector emissions by 2035.
The rules allow some plants to keep releasing most of their emissions until 2038 or 2040. Others will still be able to release at least some carbon pollution indefinitely. But Zaidi and EPA Administrator Michael Regan told reporters the proposal doesn’t undermine or conflict with Biden’s clean-electricity pledge.
“This is one proposal in a suite of actions that are being taken by the entire government,” Regan said. “And so when it all adds up, we feel very confident that we’re going to be there by 2035.”
EPA is rushing to fulfill Biden’s big climate promises before he faces reelection. Last month the agency announced the strictest restrictions ever on emissions for cars and trucks, the country’s largest source of planet-warming emissions. Other proposals to reduce soot and mercury would also help cut greenhouse gas emissions. Later this year, the agency is supposed to finish new limits on the oil and gas industry’s emissions of methane, which traps 85 times more heat than carbon dioxide in the short term.
Democrats have targeted the electric power industry for decades because power plants are such a concentrated source of emissions. Only a few thousand of these plants are together responsible for a quarter of all the country’s emissions, according to EPA data.
This helps make it the most promising sector to reduce emissions quickly, researchers said. It is faster to replace or clean up a few thousand units than turn over millions of cars. Zero-emissions power from wind, solar and battery units have, along with gas, become the dominant source of new generation. And with emerging technology for capturing carbon and burning carbon-free hydrogen, the power sector has more alternatives than heavy industry or the auto sector, where options like electric vehicles are only just emerging as viable.
“The big, low-cost reductions in the near term, a lot of them are in the power sector,” said Nathan Hultman, the director of the University of Maryland’s Global Center for Sustainability, who also helped draft the administration’s long-term climate targets as a senior adviser. “The power sector is kind of rocking today, so we want to take advantage maximally of those opportunities.”
So far the country is nearly about a third of the way to its 2030 target for reducing emissions. An analysis Hultman’s team released in November concluded that most of the remaining emissions reductions needed would have to come from the power sector.
Other experts from Princeton University and independent research firms have drawn similar conclusions. They have found that last year’s climate spending bill, the Inflation Reduction Act, puts the country on course to reduce emissions by up to 42 percent by the end of the decade. Executive actions on power plants, vehicles and methane would take it most of the rest of the way, another six percentage points of reduction, according to an analysis released in March by the Rhodium Group.
The Clean Air Task Force, an environmental group, ranked EPA greenhouse gas limits the most important executive action. It estimated the move could cut 267 million tons of carbon dioxide emissions by 2030, nearly four times what EPA cars and trucks standards could accomplish.
“The power sector was the biggest opportunity we could find,” said Conrad Schneider, the group’s senior director.
Cleaning up power plants first also helps other sectors to reduce emissions later. As motorists switch to electric vehicles and homeowners buy electric heaters and appliances, for example, they will cut more emissions if they’re tapping carbon-free power.
But with that new type of demand for electricity surging, it will put more stress on a grid that has struggled in recent years. Widespread power outages have surged, especially from snowstorms, hurricanes and wildfires. From 2017 to 2021, electricity customers nationwide spent seven hours a year without power, according to data from the U.S. Energy Information Administration, up from less than four hours a year from 2013 to 2016.
At a Senate oversight hearing last week for the Federal Energy Regulatory Commission, Sen. Joe Manchin III (D-W.Va.) prodded commissioners to say that coal-fired power, at least in the short term, is essential to reliable electricity. Manchin, who chairs the Senate Energy and Natural Resources Committee, called the EPA’s ongoing efforts on power plants a threat to the grid and on Wednesday said he will oppose all of Biden’s EPA nominees unless it backs down.
Mining and rural-power advocates have echoed Manchin’s concerns.
“This proposal will further strain America’s electric grid and undermine decades of work to reliably keep the lights on across the nation,” Jim Matheson, chief executive of the National Rural Electric Cooperative Association, said in a statement. “We’re concerned the proposal could disrupt domestic energy security, force critical always available power plants into early retirement, and make new natural gas plants exceedingly difficult to permit, site, and build.”
The EPA’s analysis says the proposal would cause retail electricity prices to rise by about 2 percent in 2030, and barely at all afterward. Regan called that “negligible,” and Zaidi said trends spurred by the Inflation Reduction Act would help offset some of those price increases.
Matheson’s group and the National Mining Association were among the few holdouts still fighting against the Obama-era Clean Power Plan when it reached the Supreme Court last year. The rural cooperatives are often the most reliant on coal, spurring on their coalition with mining interests even while many large utilities and energy-consuming companies came out in support of the rules, saying they would help get cleaner power more efficiently.
The high court ruled that the EPA then had overstepped by attempting to push power companies to switch fuels across their fleets and replace coal with cleaner options. The Biden administration has tried to counter that with rules that apply within a plant’s fence line, limiting what each plant can emit.