Several independent electricity operators jointly testified to the EPA last week that the agency’s proposed new emissions rules could cause America’s electric grid to become unreliable.
In an Aug. 8 statement, a group of Independent Systems Operators and Regional Transmission Organizations (“Joint ISOs/RTOs”) wrote that the EPA’s proposed emissions regulations “have the potential to materially and adversely impact electric reliability.”
A host of new CO2 emissions regulations—combined with decades of coordinated efforts to reduce fossil fuels by groups like the Net Zero Banking Alliance (NZBA) and the Net Zero Asset Managers initiative (NZAM)—has led to the retirement of gas and coal power plants at a rate faster than wind and solar plants can take their place, the operators wrote.
The U.S. Energy Information Administration (EIA) reports that 15.6 gigawatts of electricity generation will be taken offline in 2023, of which 98 percent is coal or gas-fired, with the remaining 2 percent being petroleum.
This is part of what President Joe Biden calls an “incredible transition” from fossil fuels to wind and solar across the United States.
The EIA states that “23 percent of the 200,568 megawatts of coal-fired capacity currently operating in the United States has reported plans to retire by the end of 2029.”
This follows a period between 2012 and 2021 in which an average of 9,450 megawatts of U.S. coal-fired capacity was retired each year.
The Joint ISOs/RTOs sounded the alarm that their planning reserve margins (PRMs), or the difference between capacity and peak demand, were being steadily depleted. Currently, the PRM is 20.1 percent, which is above the regulatory minimum of 15 percent.
“If the projection were to hold true, it will fall below the requirement in 2027, and it will continue to drop to 9.7 percent by 2028.”
The reserve margin is designed to ensure uninterrupted electricity supply, even during demand spikes, due to for example unusually hot or cold weather, or if there are supply shortages from generation or transmission malfunctions.
Electricity is essential not only for lighting, heating, cooling, refrigeration, appliances, and computers, but also for the operation of hospitals, water and sewage systems, and transportation.
In 2022, U.S. electric utilities generated about 4,243 billion kilowatthours (kWh) of electricity.
Of this, about 60 percent was produced from fossil fuels (coal, natural gas, and petroleum), about 18 percent was from nuclear energy, and about 22 percent was from renewable energy sources.
In addition to government regulations, the environmental, social and governance (ESG) movement is also working to reduce fossil-fuel-generated electricity.
BlackRock, the world’s largest asset manager and a longtime advocate of “sustainable investing,” was granted an exemption by the Federal Energy Regulatory Commission (FERC) in April 2022 to increase its ownership of utility companies to more than 20 percent.
Vanguard, the world’s second-largest asset manager, has also requested an exemption from the 20 percent limit.
In 2020, BlackRock stated that it would disinvest in coal production, introduce funds that ban fossil-fuel stocks and vote against corporate management who aren’t actively fighting climate change.
However, in October 2022, BlackRock reversed itself and told a British parliamentary committee that it would continue to invest in coal, oil and gas, and that its role was not to “engineer a specific decarbonization outcome in the real economy.”
In a January interview with The Epoch Times, John Moura, director of reliability assessment at the North American Electricity Reliability Corporation (NERC), said that fossil fuel plants are being retired at a rate that exceeds the capacity of new wind and solar to fill the gap.
“Running while we’re tying our shoes is the analogy I would give,” he said.
The NERC reported in 2022 that many sections of the North American electric grid were at risk of becoming unstable. Areas deemed “high risk” are shown in red on the map below; areas of “elevated risk” are in yellow.
China, meanwhile, has moved aggressively to build out new coal-fired plants in 2022, with new permits reaching the highest level since 2015. China is now beginning construction on coal-fired electricity generation that is six times as large as that in all of the rest of the world combined.
In addition to taking coal and gas plants offline, the U.S. grid operators said that they “are equally concerned that the rule [and the cumulative effect of all of the recent electric industry-related EPA actions and rulemakings]could have a chilling effect in the near-term on the investment needed to maintain dispatchable generating units until these new technologies develop.”
Dispatchable refers to generation plants that can be turned on or off at will, as opposed to weather-dependent solar and wind energy.
The operators fear that as a result of combined efforts of government and industry against coal and gas-fired plants, owners of these plants will refrain from investing in maintenance and upgrades, thus leaving the plants vulnerable to breakdowns even before their retirement date.
The Joint ISOs/RTOs charged that the EPA was compelling them to rely on what they said were unproven technologies to meet EPA emissions limits. These include hydrogen power generation and carbon capture technologies.
“Without firm proof of the commercial and operational viability of these technologies, proceeding with these requirements could place the reliability of the electric grid in jeopardy,” the authors wrote. “Hope is not an acceptable strategy.”
The issues raised by the Joint ISOs/RTOs speak primarily to possible shortcomings in the supply of electricity.
However, other EPA regulations, such as tightening of emissions standards for cars to compel automakers to shift approximately two-thirds of their production to EVs, will significantly increase the demand for electricity, together with regulations to curtail gas stoves, and gas home-heating, all in favor of electric-powered products.
An EPA spokesperson responded to a request for comment, stating that “the proposed rule would require plants to install proven technology to abate greenhouse gas emissions.
“The proposal provides owners and operators of power plants with ample lead time and substantial compliance flexibilities, allowing power companies and grid operators to make sound long-term planning and investment decisions, and supporting the power sector’s ability to continue delivering reliable and affordable electricity,” the EPA stated.
“The agency looks forward to reviewing comments and constructively engaging with stakeholders as we work to finalize the proposed standards.”