EPA's New Carbon Emissions Rule Spells The End For New Coal-Fired Power Plants

A blog about business and economics.
March 27 2012 8:28 AM

EPA's New Carbon Emissions Rule Spells The End For New Coal-Fired Power Plants

With congress refusing to create a comprehensive framework for regulating greenhouse gas emissions, the Environmental Protection Agency rule-writing process is trundling forward to promulgate regulations within the existing statutory framework. This week—possibly as early as today—the first step in that process will finally unfold as the Agency sets New Source Performance Standards* for the construction of new power plants that will de facto make it impossible for conventional coal-fired facilities to get off the ground.

The new rules will mandate that all new power plants generate no more than 1,000 pounds of carbon dioxide per megawatt of electricity produced. That's a standard that your basic renewables can of course easily meet as can nuclear plants. It also conveniently draws the line such that natural gas, whose price has plummeted lately amidst the North American Fracking Boom, fits in under the standard as average gas-fired plants emit between 800 and 850 pounds per megawatt. But coal plants on average emit almost 1,800 pounds per megawatt, way outside of the acceptable range. The result is that barring some miraculous new innovation in the creation of cost-effective carbon sequestration technology, there aren't going to be any more coal-fired plants built in the United States. The face of new fossil fuel based electricity will be gas (which is considerably cleaner than coal), and the alternative to gas in the event that the gas boom ends will be renewables.

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This is both a historic event and in many ways not that big a deal. The rollout process for new power plants is very slow, so this won't have any impact on short-term construction of anything. And even before the EPA got in the game, new coal was basically dead in the United States. Cheap gas, the falling price of solar, community activism, and the risk of CO2 regulation had already created the situation where no new post-2012 conventional coal was in the pipeline anyway. And America's large existing fleet of coal-fired plants are unaffected by this new rule. Regulating existing plants will be the subject of a separate rulemaking process and the new rules will be much more generous to pollution than the New Source Performance Standards ones.

* Correction: The original version of this article referred to the new rules as falling under the New Soruce Review process, which is separate and different.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.

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