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The US Environmental Protection Agency’s (EPA’s) Administrator Scott Pruitt has issued a public notice to repeal former US President Obama’s Clean Power Plan (CPP).
The move is in line with US President Donald Trump’s ‘America First’ energy strategy, with an aim to revitalise the US coal industry through tackling regulation on the development and use of domestic coal resources. The notice does not indicate whether the EPA intends to replace the CPP with a new rule on emissions.
The CPP, if enacted, would require US states to lower their combined carbon dioxide emissions from power plants by 32% on 2005 levels by 2030.
Pruitt says that enforcing the CPP would mean the EPA acting above its statutory authority, and that the Plan is inconsistent with the US’ Clean Air Act. He argues that under the Clean Air Act carbon emissions should be regulated at an individual source level, rather than collectively at a state level, and so any states acting to shut down plants to comply may be acting outside the legislation. The EPA is also reportedly looking to clarify whether it should regulate carbon dioxide at all unless the US Congress asks it to.
The Clean Power Plan has been tied up in the US Supreme Court since February 2016 (see Energy World March 2016) after a collection of business groups and 27 US states acted to block the legislation.
The Trump administration says that the proposed repeal could save up to $33bn in avoided compliance costs in 2030. But its economic methodology has been criticised for only taking into account carbon dioxide impacts within the US and not overseas, and using a high discount rate which minimises the cost of any future climate impacts.
Efforts to repeal the CPP may not amount to much in terms of revitalising coal power in the US, or altering the US’ already downward-falling emissions trajectory. According to the US’ Energy Information Administration (EIA), coal accounted for 30% of US electricity output in 2016, ranking it below gas (at 34%) for the first time, and below renewables (at 36%).
The US National Resources Defence Council’s (NRDC’s) latest annual energy report, America’s Clean Energy Revolution, says that despite the changing federal landscape, clean energy records are continuing to be broken due to improved economics and action at US state level. Solar and wind power have reached record highs in the US. The NRDC says carbon emissions from US power plants have already declined by 25% on 2005 levels, and that wind power is now the largest source of renewable capacity in the US – overtaking hydropower for the first time.
Meanwhile, the US Energy Secretary Rick Perry has proposed that the Federal Energy Regulatory Commission (FERC) acts to provide bolstered prices for wholesale electricity sales from coal, nuclear and hydropower plants – to reward their ‘reliability and resilience attributes’. This is aimed to provide additional income for plants that are currently struggling economically in the US due to cheap gas power and renewables.
The Department of Energy (DOE) doesn’t have the authority to create the rule itself, but FERC is also not obliged to implement it.
Coal and nuclear power plants are shutting early or halting construction in states such as Georgia and South Carolina (see Energy World October 2017). The 1.8 GW Monticello coal power plant in Texas is to close permanently next year in the face of depressed US wholesale power prices.
The proposal follows a DEO Energy Department report on the issue, which said that electricity grid operators were currently handling large plant closures well.
Environmental groups did not respond well to the proposals. ‘Rick Perry is trying to slam through an outrageous bailout of the coal and nuclear industries on the backs of American consumers,’ said Kit Kennedy, Director of the Energy & Transportation Program at NRDC. ‘This radical proposal would lead to higher energy bills for consumers and businesses, as well as dirtier air and increased health problems.’
Kennedy said the DOE proposal ignores the findings of its own report, which did not demonstrate any need to compensate ‘uneconomic’ power plants. Renewable power generators said that the move would give coal and nuclear an unfair advantage over other power sources.