What’s up with the new EPA power plant rules?

Experts say the difficulty and expense of adopting carbon capture and ‘green’ hydrogen technologies may ultimately push utilities to move away from fossil fuels.

Environmental groups have praised the Biden administration’s proposed greenhouse gas standards for power plants, which set carbon dioxide limits on coal plants as well as many new and existing gas plants.

Sierra Club Executive Director Ben Jealous said in a statement that the proposal “marks a significant step forward.” But he added, “The work to confront the climate crisis doesn’t stop at strong carbon pollution standards. The continued use or expansion of fossil power plants is incompatible with a livable future.”

This caveat points to a major sticking point for many environmental justice groups: the inclusion of carbon capture and storage (CCS) and “green hydrogen” in the Environmental Protection Agency’s decarbonization guidelines – technologies that would allow power plants to continue burning fossil fuels.

Theresa Landrum, a community activist living in southwest Detroit’s highly polluted 48217 zip code, worries about what kind of impact CCS and green hydrogen could have on communities that already see high pollution levels from power plants and other sources.

“We may be jumping from the skillet into the fire,” she told Planet Detroit. “We don’t necessarily know… the damage it will do.”

“Carbon capture technology and hydrogen will increase local air pollution, taint clean drinking water, threaten the safety of communities in the path of new pipelines, and raise energy bills for families nationwide,” Juan Jhong-Chung, climate justice director for the Michigan Environmental Justice Coalition, said in a statement.

Some point to a 2020 carbon pipeline rupture in Mississippi as a reminder of the potential dangers posed by CCS.200 people were evacuated and 45 were hospitalized in the incident. Too much CO2 can cause disorientation and heart problems, leading to asphyxiation and death at high concentrations.  

The pipeline in Mississippi was carrying natural CO2, not captured carbon, and the post-incident report noted “a rotten egg smell,” suggesting hydrogen sulfide may have also been present, a hazardous gas that may have caused or contributed to hospitalizations. But CO2 is odorless and colorless, which could make a rupture from a CCS pipeline even more hazardous if residents and emergency responders aren’t given an indication that a leak has occurred.   

The risk, expense and difficulty of adopting these technologies may push utilities to move away from fossil fuels, experts say. And, if the EPA’s proposed rules are adopted, state regulators could use the agency’s emission standards to justify requiring more renewable energy.

The EPA’s plan is partly the result of the Supreme Court’s 2022 decision in West Virginia v. EPA, which ruled that the agency doesn’t have the authority to require power plants to shift their generation to specific technologies like wind and solar. However, the EPA retained the power to regulate emissions from power plants. The proposed rules allow it to demand reductions in carbon pollution without mandating a specific approach.

In 2030, coal plants operating beyond 2040 would have to reduce emissions by 90% using CCS or begin co-firing with 40% gas if they close before 2040.  

Many of these facilities are slated to close before 2035 and would be allowed to operate as usual, albeit with a 20% “capacity factor limit” starting in 2030. The capacity factor is a measure of the output from a power plant over a period of time compared to the theoretical maximum output. Coal plants like DTE’s Monroe Power Plant, which proposes to close before 2032, would not have to make any changes.

“You would not design the system this way,” David Doniger, senior strategic director for climate and clean energy at the Natural Resources Defense Council, said of the EPA’s convoluted path to emission reductions. But he added that it was “an effective way to meet the climate crisis.”

Transitioning to renewables could be up to the state

Doniger said states and utilities would have “tremendous flexibility” in how they meet emission limits under the proposed rules, which “don’t require hydrogen or CCS… if you’ve got another plan including not running the plant or replacing it, that’s up to the company and the state,” he said.

In Michigan, much of the push to decarbonize energy will be in the hands of the Michigan Public Service Commission, which regulates investor-owned utilities. The MPSC may incorporate the EPA’s proposed standards in its review of utilities’ Integrated Resource Plans (IRPs) for generating energy in the coming years, along with the MI Healthy Climate Plan, which calls for a 50% renewable energy standard and a complete phase-out of coal generation by 2030. 

How the MPSC ultimately rules on DTE Energy’s pending IRP for meeting future energy needs may indicate how aggressively it plans to move towards these goals.

Matt Helms, spokesperson for the MPSC, said the commission balances a range of factors when considering integrated resource plans like reliability, diversity of generation, and commodity risks. 

“If the Commission ultimately found a different mix of resources would better balance these factors, the Commission can make recommendations to the utility to include in a revised plan,” he said. 

Lawmakers may also compel the MPSC to require more renewables by increasing the state’s renewable energy standard, creating a new statutory requirement for utilities to meet. In June, Michigan lawmakers introduced a bill to set a renewable energy standard of 60% by 2030, with a target of 100% carbon-free energy by 2035. The current draft of this bill explicitly rules out carbon capture and storage and hydrogen as components of a “carbon-free energy system.”

Helms added that Michigan’s Department of Environment, Great Lakes, and Energy (EGLE) files an advisory opinion for each IRP and that the EPA’s new rules would inform this, if they are adopted, and other “environmental considerations.” A recently introduced bill would allow the MPSC to consider climate, affordability, and potential harm to disadvantaged communities when making decisions.

Small gas plants are a big source of concern

Under the EPA’s proposed rule, new and existing gas plants that operate frequently or are larger than 300 megawatts would need to reduce emissions by 90% with carbon capture and storage by 2035 or achieve similar reductions with green hydrogen. 

However, many gas plants smaller than 300 MW or which operate infrequently, i.e., “peaking plants,” would not have to meet these standards. DTE Energy has 11 such plants in the state that are smaller than 300 MW or operate for only short periods of time when demand is high. 

Rules exempting these kinds of plants could present a significant limitation, according to an analysis by the nonprofit World Resources Institute. It shows that less than a quarter of the nation’s gas capacity comes from facilities that produce more than 300 MW. The group calls for the EPA to lower its threshold to 25 MW. 

The report also challenges the notion of regulating primarily “baseload plants,” which produce large portions of a utility’s energy needs, writing that it’s “rapidly becoming outmoded as more and more renewables are added to the system.” In other words, utilities may increasingly rely on smaller gas plants to cover the periods when renewable production is low, potentially making a failure to regulate them an even bigger problem in the future.

Unanswered questions surround CCS and ‘green hydrogen’

If power utilities do push forward with CCS and green hydrogen, a number of environmental complications could follow. 

Critics have called attention to the additional water and energy used to capture carbon from power plants, its potential to increase non-CO2 pollutants, and safety issues with the carbon pipelines needed to transport CO2 from power plants to storage sites, problems that could disproportionately impact low-income areas and communities of color where much of this infrastructure is located. And compressing and storing carbon underground could be challenging, with the potential for C02 to cause earthquakes or leak back into the atmosphere.

Doniger noted that a plant with CCS would have to control sulfur (SO2) pollution to not damage the equipment, although there could still be an increase in harmful emissions of nitrogen oxides, contributing to asthma and other respiratory problems.

Complicating the picture is the relative lack of power plant-scale CCS. Politico reported that the Boundary Dam Power Station, a coal plant in Saskatchewan, Canada, is currently the world’s only power plant using carbon capture. Cost remains a major roadblock – and using this technology with gas is more expensive than coal.

Yet the Inflation Reduction Act may make CCS more viable, offering an $85 per metric ton credit for carbon capture. This would put the technology in the ballpark of the International Energy Agency’s estimated cost for the energy sector of $50-$100 per metric ton.

Meanwhile, green hydrogen, or hydrogen extracted from water with renewable energy, could be even more of a long shot than CCS. Experts have pitched it as a potential solution for hard-to-decarbonize industries like aviation and fertilizer production or as a method for storing excess energy from wind and solar power.

“There may be some small role in truly green hydrogen in a decarbonized future, but this is largely a marketing creation by the oil and gas industry that has been hugely overhyped,” Robert Howarth, professor of ecology and environmental biology at Cornell University, previously told The Guardian.

Landrum in southwest Detroit said the development of these new technologies underscores the need for cumulative impact legislation to protect communities from the combined effects of pollution from different sources.

So far, Michigan’s Democratic majority hasn’t pushed a cumulative impact law, although Rep. Abraham Aiyash D-Hamtramck said he’s working on a bill that would allow regulators to block new industries from setting up operations in an “overburdened community” that already deals with significant pollution.

“If they looked at all the industries and each chemical that industry puts out on a cumulative level and they worked to reduce that holistically,” she said, “it would have a great impact on our air quality.”

The EPA will accept public comments on the proposed rules until August 8.


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