This week, President Obama released the widely anticipated Clean Power Plan, calling it “the single most important step America has ever taken in the fight against climate change.”
The plan aims to cut greenhouse gases from power plants, which are the biggest source of carbon dioxide in the U.S. So what will the plan mean for power generation in the U.S. and Pennsylvania?
More renewables. Less coal. That about sums it up.
Power plants account for about one third of all carbon dioxide emissions in the U.S.—by far the nation’s largest source of greenhouse gases, according to the EPA.
Coal plants account for most of these emissions, and the final rule would squeeze coal the most. The EPA projects 14 to 19 percent of coal-fired power “is projected to be uneconomic” by 2030 under the plan. It projects coal to slide from 36 percent of our electric generation this year to 27 percent in 2030. That’s down from about 49 percent in 2008.
Some factors in coal’s decline: Coal-fired power plants have had other pollution restrictions imposed on them to lower the amount of soot, mercury and smog they produce. Competition from cheap natural gas has also hurt coal, and 200 coal plants have closed in recent years.
Under the plan, the EPA estimates Appalachian coal production for power generation could decline by as much as 37 percent by 2020.
For all these reasons, the coal industry is girding for a long fight against the plan.
“It would be virtually impossible to maintain a significant coal-powered generation fleet and still hit the target numbers that the EPA has set,” said John Pippy, CEO of the Pennsylvania Coal Alliance.
There is one silver lining for the coal industry: the EPA relaxed its CO2 limits for new coal-powered plants. New plants would have to be much more efficient than current ones, but they could achieve the new standard by capturing 20 percent of their CO2 emissions. That's neither easy, nor cheap, but it is (maybe) doable.
Renewables, meanwhile, are projected to account for 21 percent of power generation by 2030, an increase from 12 percent in 2012.
Some of that boost will come from the Clean Energy Incentive Program, a new wrinkle the EPA put into the final rule to encourage states to boost the renewable sector. The program will reward states for ramping up wind and solar—and energy efficiency in low-income communities.
The fracking boom has greatly impacted the nation’s supply of natural gas—shale gas now accounts for just over half the nation’s supply. The vast majority of the growth in shale gas—85 percent—is coming from the Marcellus and Utica shales in Pennsylvania, West Virginia and Ohio. All these new sources mean gas is now at very low prices. This is not great for the companies that drill and frack for the gas, but it means that utilities are switching to natural gas and building new natural gas-fired power plants. This ‘fuel-switching’ has lowered our carbon dioxide emissions from power plants in the U.S. by 16 percent in the last decade.
The gas industry took issue with the Clean Power Plan, saying the White House was “in a sense, running away from natural gas.” Obama made little mention of natural gas in announcing the plan. Previously, he has touted natural gas as a way to lower emissions from the power sector.
But under the plan, natural gas would still become the nation’s leading source of electricity, accounting for a third of all electric power generation. And it will be a source of power that will pair well with renewables because it doesn’t shut off when the wind doesn’t blow or the sun doesn’t shine.
The EPA set targets of emissions reductions, but the states will come up with their own plans for how they reduce them.
Pennsylvania’s target is about a 35 percent reduction of CO2 from 2005 levels. But the state may already be halfway to meeting that goal. According to the Energy Information Administration, Pennsylvania has lowered its carbon dioxide emissions 16 percent between 2005 and 2012, mostly because of declines in coal plant emissions.
The state can opt to police carbon emissions at its power plants on its own, or it could choose to join other states in a multi-state cap-and-trade program, like the Regional Greenhouse Gas Initiative. Rob Altenburg of the environmental group PennFuture says the latter plan could be about 30 percent cheaper. However, joining with other states would require some additional legwork on the part of the Wolf administration.
“The DEP believes it would require the legislature acting, so it’s not necessarily the DEP’s choice whether or not that would happen,” Altenburg said.
The legislature, in passing HB 2354 last year, assured itself a role in configuring the state’s plan for meeting its carbon requirements. The law mandates that the DEP submit the plan to the General Assembly; if the assembly objects to the plan, the DEP must address those concerns before submitting to the EPA.
Even if the rule survives an inevitable court challenge from the coal industry, business groups, and some states, the rule will result in only a small decline in global climate emissions.
In total, countries emit 32 billions tons of carbon dioxide a year right now. If the plan is implemented, the U.S. would be cutting 870 million tons, or only 2.5 percent of our global emissions. But this is one of several moves the administration has made to cut down on greenhouse gas emissions from cars and planes, and methane emissions from the oil and gas industry.
President Obama says the plan will help the U.S. in climate negotiations with other countries. He says it is proof that the U.S. is serious about cutting carbon emissions. Also, much of the country’s decline in carbon emissions has been attributed to the recession. So preventing ‘backsliding’ on carbon dioxide emissions during better economic times could be one of the biggest effects of the Clean Power Plan.