EPA’s Clean Power Plan: What is it?

U. S. Department of Environmental Protection

Austin, July 2, 2014 – EPA Administrator Gina McCarthy proposed new regulations governing carbon dioxide emissions at all existing fossil fuel electric power plants last month. They are the most far-reaching EPA regulations ever conceived.

It’s called the Clean Power Plan. The sound-bite description of it is: ‘Reduce fossil fuel electric power plant CO2 emissions 30 percent below 2005 levels by 2030′.

It directly affects 3,400 coal, natural gas and petroleum power plants that produced 68 percent of all the electricity in the United States in 2012. 2012 is the base comparison year for the new plan.

Two regulations plus a third one

The Clean Power Plan consists of two newly proposed EPA regulations. The final versions were published in the Federal Register on June 18, 2014:

  1. Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units
  2. Carbon Pollution Standards for Modified and Reconstructed Stationary Sources: Electric Utility Generating Units

The two newest regulations are fundamentally different from each other. The first is a generalized mandate that applies to individual states. The second regulation is precisely defined and applies to individual power plants and electric generating units (EGUs).

The second regulation was slipped into the federal register unannounced but has a profound effect. Any existing EGU modified in any way must meet a much tougher CO2 emission requirement than the states. That requirement for individual coal-fired power plants is to reduce CO2 emissions by 50 percent, 20 percent higher than the general state-based regulation.

No existing fossil fuel plant currently meets the proposed state 30 percent reduction standard. Any that are modified to help meet the state reduction plan will have to be modified to meet the much tougher individual EGU modification standard.

The two newly proposed regulations dovetail with a third very stringent CO2 emissions reduction proposal for new power plant construction that was introduced by EPA just a few months ago on January 8, 2014:

Standards of Performance for Greenhouse Gas Emissions From New Stationary Sources: Electric Utility Generating Units

If someone wants to build a coal-powered plant, they can. It’s just that it will bankrupt them
Candidate Barack Obama, San Francisco, 1/17/2008

According to the EPA proposal, the second Clean Power Plan regulation of June 18th is designed to put modifications to existing plants on par with the stricter new power plant CO2 standard.

Net effect of the three regulations

At present, none of the existing 3,400 fossil-fuel power plants can meet the Clean Power Plan CO2 standards without modifications.

If modified, a coal-fired power plant must reduce CO2 emissions, on average, by 50 percent.

No utility-scale coal-fired power plants operating in the United States today meets the 50 percent new construction or modification standard.

As it stands right now, coal-fired power plants, which produced 1.6 million gigawatthours of useable electricity in 2012, will either have to be closed or remain untouched under curtailed operations. There is no affordable middle ground.

Understanding plan upfront costs

Author: The 1,534Mw Sandow Station coal-fired electric power plant near Rockdale, Texas

Sandow Station, the coal-fired power plant pictured above, produced 8,700 gigawatthours of usable electricity from two units (4 and 5) in 2012.

To comprehend the enormous investment costs needed for the Clean Power Plan undertaking, first consider that wind and solar combined, after tens of billions invested, produced only 3.59 percent of all U.S. electricity in 2012, according to EIA records.

The Topaz Solar Farm near San Luis Obispo, completed this year, is the world’s largest. At a cost of $2.5 billion, it has nine million panels, covers 9.5 square miles and is rated to produce 1,096 gigawatthours of usable electricity per year.

Assume for a moment that Sandow Station, as part of the Texas Clean Power Plan, were to be replaced with renewable, zero-emission Topaz-scale solar farms fueled by abundant west Texas sunshine.

It would take nine Topaz-sized solar farms occupying 85 square miles built at a cost of $22.5 billion dollars upfront to replace Sandow Station. Long-term costs would be much less after it is levelized over the lifetime of the solar farms, but the initial investment must be financed and spend before a single watt of electricity is produced.

$22.5 billion to replace just one coal-fired power plant with renewable solar energy is a lot of money.

Nationally, to meet the state standard using solar power, it would require about 500 Topaz-scale solar farms costing a staggering upfront investment of $1.25 trillion. Someone has to pay for that.

Conclusions

The electric power sector produces about 1/3rd of all CO2 emissions in the United States. Of that, coal-fired power plants emit about 75 percent of it while contributing 37 percent of the electricity.

President Obama’s 2013 Climate Action Plan has centralized around reducing CO2 emissions from the electric power sector. Three new EPA CO2 reduction regulations proposed this year have been carefully crafted to support the President’s climate vision that will be made a campaign issue in the 2014 elections.

Most CO2 reductions will come from closing coal-fired electric plants, but the plan also puts stress on natural gas plants that supply 27 percent of total U.S. electricity.

The first EPA proposal in January is a stringent 50 percent reduction in CO2 emissions from all newly built coal-fired power plants, along with about 10 percent reductions in new natural gas powered plants.

Last month, EPA introduced two more CO2 reduction regulations. Together they are called the Clean Power Plan. One sets a generalized 30 percent reduction requirement for state CO2 emissions. The other, by design, sets the same stricter reduction standards for modifying or reconstructing power plants as for newly built ones.

There isn’t a single utility scale coal-fired power plant in the United States that meets the state 30 percent reduction standard. Billions being invested in “clean coal” technology right now by the Department of Energy prove they can’t be built or modified affordably.

Working in concert with each other, the three regulations insure that no new coal-fired plants will be constructed and all existing ones will be squeezed out of existence economically, fulfilling Barack Obama’s 2008 campaign promise to put the coal electric power industry out of business.

The Sandow Station/Topaz Solar Farm example shows that replacing 37 percent of U.S. electric production generated by coal over the next 20 years or so will not be easy and require staggering upfront investment costs. Ratepayers and taxpayers will shoulder part of the burden for those costs.

 

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About azleader

Learning to see life more clearly... one image at a time!

Posted on Jul 2, 2014, in Clean Power Plan, climate change, economics, Economy, EIA, Energy, energy policy, environment, Global Warming, Government, news, Politics, science. Bookmark the permalink. 2 Comments.

  1. Good article AL, and the numbers are irrefutable.

    It would be useful in all of this to hear from the utilities themselves. They are being required to meet these standards using technology and engineering, as they have been with wind and solar. I would presume that the engineers would have an opinion on how, when and if these new mandates can be met.

    Do you know of any expressed opinions by this, often ignored, subset of players in this unfolding drama?

    • I’m just getting warmed up on the the Clean Power Plan (CCP) and costs rate high on the to-do list.

      I’m preparing an in-depth analysis of levelized costs based on EIA and EPA numbers, and it is a lot higher than the $7.3-$8.8 billion dollars the EPA came up with using their Integrated Planning Model (IPM).

      Whoever invented IPM should be fired and sued for data analysis malpractice.

      I’m unaware of any formal reactions from industry, but I can’t imagine they will just roll over and play dead. A lot is at stake here.

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