Sign In or Create an Account.

By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy

Politics

What the EPA Can’t Say About Its New Power Plant Rules

Thanks to the Supreme Court, it is a very difficult proposal to talk about.

A smokestack and scales.
Heatmap Illustration/Getty Images

The Environmental Protection Agency just shoved power plants towards the renewable energy transition. But don’t expect supporters to crow about it.

On Thursday, the EPA took the long-awaited step of proposing greenhouse gas limits for new and existing power plants. If finalized and implemented, the rules would vastly reduce carbon pollution from the power sector by 2040 and mark the first time ever that the nation’s electricity system is subject to federal climate restrictions.

But first the rules must survive the sharply conservative Supreme Court, which has blocked previous attempts at regulating power-plant pollution. And so environmentalists and Biden officials will be forced to walk a rhetorical and legal tightrope: In order to keep the all-important rules alive, they will have to describe them as not very significant at all. And even though the rules will likely increase renewables’ share of U.S. power generation, few green groups will brag about it.

Why? Because they are dancing around a major Supreme Court ruling, West Virginia v. EPA, that came out last year.

In the case, the Court struck down the Clean Power Plan, President Barack Obama’s 2015 attempt at regulating climate pollution from power plants. Obama’s plan treated each state’s power plants as a single system, then let each state choose how to cut carbon pollution from that system. States could shut down plants or create a carbon-trading scheme. They could even link multiple carbon markets together to establish a de facto national cap-and-trade market.

That went too far beyond the EPA’s authority under the Clean Air Act, the Court ruled. Although the Court said that the agency could, in theory, issue rules to cut greenhouse gases from the electricity sector, those rules had to keep “within the fenceline” of each power plant.

The EPA could no longer get fancy when it wanted to regulate climate pollution. It could only use blunter, command-and-control technological mandates to reduce carbon pollution from each type of power plant, the Court said. And any technologies that it required had to be both “cost-reasonable” and “adequately demonstrated,” that is, affordable and feasible to install at scale.

The EPA’s new proposal tries to hew within those guidelines. The agency has determined that the best available technology to reduce emissions directly from fossil-fuel-burning power plants is to install carbon-capture equipment. Carbon-capture-and-storage technology, or CCS, is now affordable and feasible, the agency asserts.

“There’s a 100% chance that this will be challenged in court,” Michael Gerrard, a Columbia Law professor and the director of the Sabin Center for Climate Change Law, told us. “The debate will largely be about if CCS is ‘adequately demonstrated.’”

At stake, too, is the question of whether the rules represent a Trojan horse — that although the proposal appears to comply with the Court’s guidelines, the expense and hassle of installing carbon-capture equipment is meant to force utilities to shift to renewables anyway.

That could in fact be the rules’ practical effect. (Some environmentalists will admit — although not on the record — that they like the rules for this reason.) States and utilities can achieve the new standards any way they want, and in many cases they will find that shutting down a power plant and replacing it with wind, solar, and batteries is cheaper than installing new carbon scrubbers. Even with the Inflation Reduction Act’s new subsidies, carbon capture could prove to be more expensive or complicated than other options. CCS requires a network of pipelines and wells to inject carbon underground; wind, solar, and batteries mostly require open land.

Power plant regulations by the EPA could add 17 to 170 gigawatts of solar and wind to the grid by 2035, compared to the growth that is expected from the Inflation Reduction Act alone, according to Ben King, an analyst at the Rhodium Group, an energy-research firm.

At the absolute high end, renewables would command 5% more market share in the United States than they would otherwise, he said. (These estimates were based on an analysis of a similar, though not identical, version of the EPA’s proposal.)

Any legal challenges will leave the EPA’s lawyers in a difficult position. The agency must show that carbon capture is viable and not cost-prohibitive; and make it clear that the regulations are flexible for states and utilities, giving them a number of ways to meet the standard; and downplay the fact that in many cases the cheapest way to comply will in fact be to transition to renewables and batteries.

The industry, ever-desperate to evade regulations, has already begun to insinuate that carbon capture technology is not yet commercially available — a shift in tone from its typical enthusiasm for the technology — and therefore cannot be the basis for any standard. As we previously reported, Southern Company, a utility that has championed CCS, told EPA that the technology was “many years away” from becoming a reality.

“The irony here is that for many years, the industry talked about clean coal, and clean coal meant coal with CCS. And they were claiming that it worked, that it was available. And now they’ve switched. They say that now, years later, after a lot of technological development and billions of dollars of research, it’s not available,” Gerrard told us.

Supporters argue that the EPA’s new regulations are backed by precedent. The agency has long mandated that coal plants install technology that “scrubs” sulfur-dioxide emissions out of their exhaust streams, Eric Gimon, a senior fellow at the think tank Energy Innovation, told us.

As those rules have started to bite, some companies found that it was cheaper simply to shut coal plants down than install the scrubbers. Two years ago, a power company called Amaren determined it made more sense to shut down its Rush Island coal plant in Missouri 15 years earlier than planned rather than pay for upgrades to comply with the standard.

“Was it illegal for the EPA to build a standard that way? No, it’s perfectly reasonable,” Gimon said. “It’s like, ‘We put in a standard. We know you can comply with this standard at a cost. It's not astronomical, but if you think you can do better by retiring the unit and doing something else, knock yourself out.’ That's how it’s worked.”

Whether the EPA’s rules are upheld or not, the long-term future of the most carbon-intensive power plants on the grid — coal plants — is not in doubt.

“The grid is undergoing its own transformation of increasing renewables and decreasing fossil fuels,” Jay Duffy, litigation director at Clean Air Task Force, told us. In March, the Energy Information Administration projected that coal-fired generation would drop to about 50% of its current levels within eight years.

“No regulation,” he said, “is going to change that transition.”

Blue

You’re out of free articles.

Subscribe today to experience Heatmap’s expert analysis 
of climate change, clean energy, and sustainability.
To continue reading
Create a free account or sign in to unlock more free articles.
or
Please enter an email address
By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy
Energy

On Top of Everything Else, Trump’s Tax Bill Would Break Direct Pay

A little-noticed provision would make the payment option used by tax-exempt groups all but impossible to claim.

Solar panels and wind turbines.
Heatmap Illustration/Getty Images

A little-noticed provision in the Senate tax bill will sabotage the efforts of tribes, rural electric cooperatives, and public power authorities to develop local affordable energy projects by striking a section of the Inflation Reduction Act that enabled tax-exempt groups to claim the clean energy tax credits as direct cash payments from the Treasury.

The IRA included strict domestic sourcing requirements beginning in 2026 for groups utilizing this “direct pay” option on projects larger than 1 megawatt. But the law also created exceptions for cases where domestic components were not available in sufficient quantity or quality, or would increase costs by more than 25%. The Senate bill would get rid of these exceptions.

Keep reading...Show less
Blue
Charlie Day going crazy.
Heatmap Illustration/Getty Images

Senate Republicans tucked a carveout into their reconciliation bill that would allow at least one lucky renewable energy project to qualify for a major Inflation Reduction Act tax credit even after the law is all but repealed.

The only problem is, it’s near impossible to be sure right now who may actually benefit from this giveaway — and the mystery is driving me up the wall. I feel like Charlie Day in that episode of It’s Always Sunny in Philadelphia, stringing documents together and ranting like a lunatic.

Keep reading...Show less
Yellow
Economy

AM Briefing: China Relents on Rare Earths

On resuming rare earth shipments, hurricane tracking, and EV tax credits

The U.S. and China Have Reached a Trade Deal
Heatmap Illustration/Getty Images

Current conditions: The Ohio Valley is still sweltering through the last remnants of this week’s brutal heat wave • The death toll from recent floods in South Africa has risen to 101 • It’s 90 degrees in Venice, Italy, where the world’s rich and famous are gathering for the wedding of Jeff Bezos and Lauren Sanchez.

THE TOP FIVE

1. U.S. and China finalize trade deal

The U.S. and China have hammered out the details of a trade deal, including an agreement that China will resume rare earth shipments to the U.S. Rare earth materials are essential for everything from planes to EVs to wind turbines. China controls most of the world’s rare earth production and halted exports in April in response to President Trump’s tariff hike, and China’s chokehold on rare earths threatened to derail trade talks between the two countries altogether. Commerce Secretary Howard Lutnick said a deal has now been “signed and sealed.” “They’re going to deliver rare earths to us,” Lutnick said, adding that the U.S. will then “take down our countermeasures.” Lutnick also indicated that Trump plans to announce further trade deals with other nations in the coming two weeks.

Keep reading...Show less
Yellow