Power Industry At An Inflection Point Regarding EPA Rules
February 2, 2024 - Speakers at POWERGEN International emphasized uncertainty last week as they discussed regulatory rules and proposals from the U.S. Environmental Protection Agency (EPA) aimed at the power industry.
2023’s Release of New Regulations was the first Mega Session held at POWERGEN. Regulations highlighted in the 90-minute panel included New Source Performance Standards, the Good Neighbor Rule, Effluent Limitation Guidelines, Coal Combustion Residuals and others.
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Panelists speak at "2023's Release of New Regulations" at POWERGEN International on January 23, 2024.
Photo by Clarion Events
But a majority of the time was spent talking about proposed carbon emission standards for coal-fired plants and new and existing natural gas-fired plants. The technology-based standards, proposed by EPA in May 2023, lean on hydrogen co-firing and carbon capture and sequestration (CCUS) as strategies for decarbonizing these plants.
Nick Hutson, Energy Strategies Group Lead at EPA and one of the Mega Session panelists, said the agency has heard from various groups and stakeholders during the comment period leading up to the final rule being issued.
The comment period ended December 20, with a finalized rule expected in the Spring.
As we’ve reported, the power industry is fractured over EPA’s proposal. Some utility trade groups say the proposal should not be finalized, while others say improvements are needed. Still other utilities have thrown their support behind it. Opposition to the rule often comes with concerns that its implementation would jeopardize reliability.
While emissions reduction is EPA’s primary objective, Hutson said the agency always wants to “make sure that we’re not adding to the problem unnecessarily.”
“We always do modeling to evaluate what is the projected outcome of our policies,” he said.
As the rule is currently proposed, any coal-fired power plant intending to operate past 2040 would have to install a CCS system that captures 90% of its CO2 emissions by 2030. Any large, frequently operating natural gas-fired power plant would have to either install a 90% capture CCS system by 2035 or operate nearly entirely on clean hydrogen by 2038.
Generators that can’t meet the new standards would be forced to retire.
Jordan Flanagan spoke on the panel representing the Institute of Clean Air Companies (ICAC), a trade association representing technology, equipment and service providers in the power sector.
She said the proposed EPA rules offer both opportunities and challenges for ICAC members.
“Our members have a lot of proven technologies that are available right now to deploy commercially,” said Flanagan, Policy and Programs Associate for ICAC. “But they’re also seeing lots of opportunities and challenges for some of the newer concepts posed by the greenhouse gas power plant rule. There’s a lot of uncertainty around it.”
David Triplett, Sr. Mgr. Environmental Policy & Sustainability at Entergy, offered a utility’s perspective on the proposed rules.
He said while the rules are only proposed and are subject to change before being finalized, they are “important additional inputs” that utilities need to factor into their generation planning processes.
“Our sector really is at an inflection point in terms of change with how we’re meeting resource adequacy requirements,” said Triplett.
Entergy is already taking an “all of the above” approach to resource planning, with a goal of 50% carbon reductions from its fleet by 2030 and to be completely net-zero by 2050.
Triplett said Entergy has signed memorandums of understanding with “a number of partners” to include all potential technologies.
“We’re investigating every possible path to find the one that’s going to be most cost effective and effective feasible for our fleet to get to [net-zero],” he said.
Triplett was asked about what he expects to be the most significant challenges in complying with the proposed power plant emission rules.
“With the with the hydrogen and CCS aspects, there’s significant infrastructure that needs to be built out to support those technologies at our generating facilities that doesn’t exist today or exist in a limited extent,” he said.
Triplett added the caveat that if it does happen, “it will happen here first,” speaking on the existing pipelines in the Gulf Coast region.
Regarding other potential compliance considerations, Triplett noted the importance of timing. With multiple proposed power sector regulations expected to be finalized in 2024, he said thoughtful alignment of compliance requirements is critical to ensuring effective utility resource planning, integration of new generation and continued reliable operation of existing generation resources.
For example, Entergy plans to exit coal by 2030, yet coal compliance dates from the EPA come both before and after Entergy’s anticipated coal retirements.
“Our hope is as EPA takes action to finalize these rules, these various dates will become into closer alignment,” said Triplett. “From our perspective, we don’t want to have to dedicate additional capital to units that are going to deactivate in the near to medium term that could otherwise be deployed more productively for new generation.”