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Biden’s pick to head US EPA vows fresh look at power plant carbon caps

03 February 2021 Amena Saiyid

Michael Regan, President Joe Biden's pick to lead the US Environmental Protection Agency (EPA), pledged to start afresh on tackling carbon dioxide limits for power plants after a federal appeals court overturned the rule on the books in January.

"The reality is that this presents a significant opportunity for the [EPA] to take a clean slate and look at how we best move forward," Regan told Senator Shelley Moore Capito, a Republican from West Virginia who chaired Regan's 3 February Senate Environment and Public Works Committee confirmation hearing.

Capito asked Regan whether Biden intends to draft a newer version of the Obama administration's 2015 Clean Power Plan—which set the first carbon dioxide limits for existing coal-fired power plants. However, she stopped short of mentioning that the 2019 Affordable Clean Energy (ACE) rule, which replaced the Clean Power Plan, was overturned in January by the US Court of Appeals for the District of Columbia Circuit.

The ACE rule, which President Donald Trump's EPA crafted, was based on a list of technologies the agency identified for upgrading plant equipment and improving operations. In contrast, the Clean Power Plan imposed a numerical limit on carbon emissions for coal-fired plants, while offering flexibility to meet this limit through energy efficiency improvements as well as by trading carbon offsets and fuel switching.

Regan said he would follow the science, harness the Clean Air Act's authority, and secure buy-ins from stakeholders and communities affected by any action, whether it be in the form of rulemaking or voluntary, that the agency takes. "It's my understanding that we have to take a look at what was the plan for the Clean Power Plan and what were the plans for the ACE rule," Regan said.

There are numerous examples of success and failures in past attempts, but Regan said: "I am not going to look backwards, but look forward."

Biden has pledged to make the US power sector carbon-free by 2035, as part of the US commitment to meet the global climate treaty, the 2015 Paris Agreement.

Impact on coal communities

Capito was especially concerned about the impact any new carbon regulations would have on West Virginia's coal industry, which has taken a pounding as a result of low natural gas prices and greater penetration by renewables. She was especially concerned about the appointment of former EPA Administrator Gina McCarthy as the White House's domestic "climate czar," a position without congressional scrutiny.

"It still stings," Capito said repeatedly over McCarthy's refusal to visit West Virginia when EPA was crafting the Clean Power Plan.

Regan acknowledged Biden has laid out a very ambitious climate plan that requires an all hands-on approach, but said he would work towards achieving the climate goal. "The president has an aggressive climate agenda that takes a whole of government approach," Regan said. "We have been instructed not to leave any community behind."

Drawing on his experience as North Carolina's top environment regulator, Regan reassured Senator Kevin Cramer, Republican-North Dakota, that he was committed to working with states. He agreed with him that uncertainty and litigation over rules makes states' work harder, not easier.

Senator Sheldon Whitehouse, Democrat-Rhode Island, asked Regan to make sure that EPA includes discussion of carbon capture and sequestration technology in any rule capping greenhouse gas emissions. The prior administration axed carbon capture and storage as an option for new coal-fired plants when it began rewriting Obama-era rules.

Coal's declining share

The share of coal-fired generation in the US power mix has continued to slip despite the prior administration's efforts to shore it up through rulemakings. Under Trump, the Department of Energy ordered a review of energy grid reliability policies by the Federal Energy Regulatory Commission, which came to the conclusion that extra compensation for coal-fired power plants in order to ensure reliability was not necessary.

By the end of 2019, coal-fired generation's share of the US power mix was 21%, or 229 million kilowatts, declining from a high of 42% in 1990, according to the US Energy Information Administration.

According to IHS Markit's North American Power Market Outlook, at least 90 gigawatts (GW) of grid-connected coal-fired capacity in the Lower 48 states has either been retired or is committing to retiring by the end of 2020. And another 65 GW has been committed to or is expected to retire by 2030, the report said.

IHS Markit analysts expect the pace of coal-fired retirements to continue as the Biden administration imposes more stringent carbon caps on power plants to reach its 100% carbon-free power sector goal by 2035.

Posted 03 February 2021 by Amena Saiyid, Senior Climate & Energy Research Analyst, IHS Markit

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