Biden EPA to issue power plant rules that lean on carbon capture

Sources stated President Joe Biden’s administration may mandate natural gas-fired power stations to adopt carbon-capture equipment to decarbonize the electricity industry in 12 years.

Two sources indicated the Environmental Protection Agency will release power plant rules this week, which emit 25% of U.S. greenhouse gases. The guidelines would replace former President Donald Trump’s American Clean Energy mandate and former President Barack Obama’s Clean Power Plan, which courts overturned.

Clean air law experts and business stakeholders in EPA talks say the criteria should be based on a plant’s carbon capture and storage (CCS) capacity.

Utility firms may choose CCS-equipped baseload gas plants or zero-emission renewable energy. States would plan plant compliance.

“These standards could level the playing field between new gas plants and new renewable energy,” said Sierra Club Pennsylvania chapter leader Thomas Schuster. Most new gas plants do not pay for carbon emissions, so the rules could make them less competitive with solar and wind power.

Biden promises to decarbonize power by 2035. The Clean Air Act requires criteria based on the “best system of emission reduction,” economical and technically possible technology.

For legality, the plan will incorporate two important changes. One, a July Supreme Court ruling, prevented EPA from demanding a system-wide electric generating transition but authorized plant-specific requirements.

Second, the Inflation Reduction Act introduced tax subsidies to make carbon capture and hydrogen cheaper and reaffirmed EPA power plant regulation authority. The law provides over $100 billion in clean electricity tax incentives, including a 70% increase in carbon credits per ton caught and sequestered.

“If you’re building a new fossil [plant], it needs to control its emissions,” said Natural Resources Defense Council federal legal group director Lissa Lynch. Lynch said technology can absorb and store 90% of carbon emissions.

Lynch said EPA might impose stricter rules on plants that run constantly and easier ones to “peaker” facilities that run amid heavy power demand.

Cleaner power
In 2022, gas and coal generated 60% and 40% of U.S. electricity, respectively, according to the Energy Information Administration. 21.5% was renewable, while the remainder was nuclear.

The EIA forecasts 54% solar (21GW) and 14% natural gas (7.5GW) additional power this year.

Federal utility TVA has the greatest planned gas capacity at 5GW, followed by investor-owned Duke Energy (DUK.N) at 3GW.

A representative said TVA will use carbon-free sources “and sources like natural gas that complement that diversity without sacrificing rates or reliability” in the next decades.

Duke wants natural gas “operated less as baseload generation and as more of a peaking/ramping resource over time to balance out the variability in renewable resources,” a spokeswoman said.

Last year, the National Mining Association told the EPA that carbon capture and storage is not a “adequately tested technology.” The organization noted the 2020 demise of Petra Nova, a Texas project.

“To safeguard electric needs of the U.S.”, Southern Company (SO.N) recommended additional gas turbines.

Southern, which administers the National Carbon Capture Center with the Department of Energy, said commercial implementation of carbon capture technology “is many years away” notwithstanding the cost-reduction promise of the Inflation Reduction Act.