President Obama announced EPA’s new Clean Power Plan at the White House yesterday, citing the need to reduce carbon pollution from power plants as an historic step in taking real action on climate change.
Natural gas, renewables, nuclear and efficiency are the winners. Coal is the loser.
The President stated that the final Clean Power Plan is fair, flexible and designed to strengthen the fast-growing trend toward cleaner and lower-polluting American energy.
“With strong but achievable standards for power plants, and customized goals for states to cut the carbon pollution that is driving climate change, the Clean Power Plan provides national consistency, accountability and a level playing field while reflecting each state’s energy mix. It also shows the world that the United States is committed to leading global efforts to address climate change.”
EPA’s new Clean Power Plan announced yesterday at the White House focuses on reducing carbon... [+]
Last year, even the United States military, an institution not generally known for its liberal thinking, declared that climate change poses a major threat to our national and global security. So this Plan was bound to be developed with climate in mind.
Critics claim that the Plan is inherently unfair, punishes taxpayers and will destroy our economy, similar to what was claimed for the Clean Air Act, the Clean Water Act, the Endangered Species Act, and a host of other environmental changes that have kept our country reasonably cleaner and safer than most other nations in the world.
Fair to say none of that ever happened. And none of that will happen if this Plan gets enacted. What would happen is the United States would get much cleaner and healthier air, regardless of what you think about climate change.
By 2030, emissions of sulfur dioxide from power plants would be 90% lower compared to 2005 levels. Emissions of nitrogen oxides would be 72% lower. And air-borne coal particulates would drop dramatically. Because these pollutants create dangerous soot and smog, getting to such low levels will mean avoiding thousands of premature deaths and thousands fewer asthma attacks and hospitalizations in the future.
Since coal kills about a million people worldwide each year, more than any other part of our infrastructure, this public health aspect is the real strength of this Plan, even as climate change is used as the political driver.
But this plan will be easier to enact than anyone realizes. Half of our existing coal plants will be pretty old by 2030, it’s just a matter of planning their replacement with a combination of gas, renewables and new nuclear. This is exactly what we have been doing over the last ten years, and why our carbon emissions have fallen as much as they have (Time). The EPA rules only formalize the ongoing transition from coal to gas that is occurring anyway.
The utilities won't be hurt at all. The consumer won’t be hurt either since those states that have been moving forward already, like South Carolina and Kansas, are thriving economically (The Breakthrough Institute; The Energy Collective).
The only big loser in the U.S. from these rules will be coal producers. Of course, coal use worldwide is growing steadily, so many coal producers are trying to get the coal out of the U.S. and to new customers (Tri-City Herald), very much what the tobacco industry has done as the U.S. market declined and China’s smoking market reached a billion people.
There are many details, but the important aspects of this Plan is that EPA sets a goal of 32% reduction in power plant emissions by 2030 relative to 2005 levels, but the states will choose how they meet that goal.
For example, Washington State can actually ignore this Plan since we are already so low-carbon with hydro, nuclear and wind, that we will beat any national emissions goal on our own by the end of this decade (Washington State). On the other hand, Indiana’s emissions are unlikely to decrease much without severe intervention since they are almost completely dependent on coal for their electricity generation.
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Some of the details, however, can be confusing. To give states a choice, EPA is establishing interim and final statewide goals in three forms:
- a rate-based state goal measured in pounds of CO2 per megawatt hour of electricity produced (lb/MWh)
- a mass-based state goal measured in total short tons of CO2 emitted
- a mass-based state goal with a new source complement measured in total short tons of CO2.
Each state will have the flexibility to select the compliance method it prefers. States will also have the ability to shape the way they implement their changes over the period from 2022 to 2029, pretty much giving them free rein.
The 1,560 page official final rule, and thousands of pages of supplements, have still to be read and mulled for a final understanding, but on first look the results appear as expected from last year’s draft, especially what they might mean for nuclear power (Forbes June 2014). EPA has called out what changes occurred (Changes in final EPA CPP) from that draft to the final version announced yesterday (EPA CPP Fact sheet).
What does the nuclear power industry think of this revised Plan?
The review has been mixed (NEI, Breakthrough Institute). New nuclear plant construction, as is occurring in the southeastern United States, can be incorporated into state plans and count towards compliance. As can nuclear plant uprates, that is, increasing actual power output from an existing nuclear plant - something we do frequently.
NuScale Power’s CEOJohn Hopkins, who participated in recent energy discussions at White House clean energy summits, remarked, “We have had numerous opportunities for dialogue and input to the Clean Power Plan, both in direct conversations with the EPA and via the input of a growing list of prospective clients who want Small Modular Reactors to support their future carbon-free baseload electricity generation. As such, we are reviewing the new rule carefully. It is clear that the rule will increase the value of nuclear energy in power generation portfolios.”
However, maintaining existing nuclear plants, and doing the work to extend their lives (renewing licenses), is not rewarded at all in this plan, and is even worse compared to the draft Plan. Since existing nuclear plants contribute over 60% of our carbon-free electricity generation, this is not good. States could decide to replace some of that nuclear energy with higher-emission sources like natural gas coupled with renewables, making it quite difficult, and in some states impossible, to meet these new emission goals.
This can be seen in Vermont where their single nuclear plant was closed prematurely. They have been buying nuclear power and hydropower from out of state just to maintain their existing level of low-carbon power. Since their 2005 levels were based on having so much of their power from nuclear, achieving more carbon reductions under this Clean Power Plan will be difficult, and will include continued purchasing of expensive power from out of state.
On the other hand, this new version of the Clean Power Plan could encourage a national interstate carbon trading system, which could mostly increase the cost of coal-fired generation relative to nuclear and renewables. So low-carbon generators with significant nuclear and renewables, such as Exelon, could be big winners in this Clean Power Plan.
There is a section in the Plan that addresses reliability and that may be used to support existing nuclear plants. States must show they have considered reliability in developing their state plans and can amend their plans in the event that reliability challenges arise.
Since nuclear is the most reliable of all energy sources, this is a good thing.
In the end, this Plan won't hurt the economy or our energy security or our energy reliability. It won't even cause a net loss of jobs, they will shift around through retraining. But the Plan will spur alternative energy development and installation including new nuclear. It will lower our health care costs. It will increase fracking for gas. And it will bring an onslaught of litigation and state legislation aimed at derailing it.
Just in time for the 2016 elections!
