Will power plant rules cause blackouts?
The head of the Environmental Protection Agency told Congress her agency’s proposed rules governing carbon dioxide emissions from power plants will not affect the reliability of electricity service. That’s debatable.
Various analyses have arrived at differing conclusions on this issue, and some electricity grid operators say there is a potential for service disruption under the Clean Power Plan.
The EPA unveiled the Clean Power Plan in June 2014, with hopes it will be implemented beginning in the summer of 2015. It is designed to cut carbon dioxide emissions from the power sector by 30 percent from 2005 levels by 2030. The agency says that this will improve public health while also significantly cutting the country’s contribution to global warming.
In an exchange during the House Energy and Commerce Committee hearing on the EPA budget (at the 1:33:11 mark), Rep. Bob Latta, a Republican from Ohio, asked EPA administrator Gina McCarthy whether states might be able to receive waivers or another exemption if reliability of electricity delivery is a concern. McCarthy responded:
McCarthy, Feb. 25: EPA does not see the rule as it has currently been proposed to have an impact on reliability.
Reliability refers to the electricity grid’s ability to avoid disruptions to electricity supply — in short, a reliable grid is one that doesn’t have a lot of power outages. This depends on a number of factors, and the concerns regarding reliability and the Clean Power Plan stem primarily from the fact that certain power plants will likely be forced to close earlier than otherwise planned.
There is no one simple answer as to whether the Clean Power Plan will negatively impact reliability of electricity delivery, in part because the plan does not prescribe exactly how the cuts in emissions should be achieved. Each state can decide how to arrive at the goals, through energy efficiency improvements, cutting pollution from existing power generation facilities, and through installing new cleaner facilities including renewable energy as well as natural gas power plants.
There is nothing in the plan specifically forbidding coal-fired power generation, but the EPA estimates that “[t]he use of coal by the power sector will decrease by roughly 30 to 32 percent by 2030.” Coal plants emit more carbon dioxide than natural gas plants, and other sources including hydroelectric, solar, wind and nuclear emit no carbon dioxide. In 2013, coal accounted for 39 percent of U.S. power production, followed by natural gas (27 percent) and nuclear power (19 percent).
Because there are varying paths available to achieve the Clean Power Plan’s targets, the grid’s resulting reliability is hard to predict. An EPA spokeswoman pointed us toward several documents containing EPA analyses of reliability, all of which found little cause for concern. For example, EPA estimates a reduction in total “operational capacity” — how much electricity generation is available — of 3.5 percent in 2020, mostly due to coal plant retirements. The details and the amount of that reduction, EPA says, means the rule will “have little overall impact.”
Still, several of the organizations responsible for moving electricity around the country and maintaining the grid (known as ISOs — independent system operators — and RTOs — regional transmission organizations) have expressed concerns. These groups are nonprofit organizations that do not take policy positions.
For example, the Midcontinent ISO, which covers parts of 15 states from North Dakota down to Louisiana, released its preliminary findings on reliability in November 2014, and noted some “reliability concerns” regarding the timing of the Clean Power Plan rules. Because the rules would lead to retirement of power plants before otherwise planned, MISO’s CEO said that “building new generation, natural gas infrastructure and transmission facilities necessary to support electric system reliability will take more time than the interim performance period allows.” If the rule goes into effect largely as proposed, states would be expected to start “to make meaningful progress toward reductions by 2020.”
Similarly, in comments filed with the EPA, the New York ISO wrote that “the Clean Power Plan presents potentially serious reliability implications for New York.”
The Southwest Power Pool, which covers Nebraska, Kansas, Oklahoma and parts of several other states, has expressed similar concerns: “Unless the proposed CPP is modified, the SPP region faces serious, detrimental impacts on reliable operation of the bulk electric system — introducing the very real possibility of rolling blackouts or cascading outages that will have significant impacts on human health, public safety, and economic activity.”
Again, this is due to the retirement of power generating facilities. SPP estimated that its “reserve margin,” essentially how much electricity is available to meet periods of high demand, would drop well below its required minimum of 13.6 percent down to 4.7 percent in 2020 and below zero in 2024. Though building new generation could change these numbers, SPP says there won’t be enough time to complete such construction.
Some other ISOs and RTOs continue to study the issue but have not issued specific findings. PJM Interconnection, for example, which coordinates electricity in parts of 13 states and Washington D.C., told us in an email that a full analysis will be completed this spring.
“Our preliminary review suggests that power plant retirements that would result from CPP likely would occur over time, potentially making the retirements more manageable … assuming that transmission upgrades are made in a timely manner,” said PJM’s Ray Dotter.
A collective group of the grid operators called the ISO/RTO Council has suggested that the Clean Power Plan would benefit from a “reliability safety valve.” This would essentially build in reviews of grid reliability to the final rule, and allow for some “enforcement flexibility” to help lessen any damaging impacts.
Outside of the grid operators, there are conflicting studies on how the Clean Power Plan and the related retirement of power plants might affect reliability. A report from the nonprofit North American Electric Reliability Corp. (which is overseen by the Federal Energy Regulatory Commission) from November 2014 expressed concern about the plan, noting that “Essential Reliability Services may be strained by the proposed CPP” and that more time for the plan’s implementation might be necessary in order to ensure grid reliability.
Two studies funded by advocates for clean energy found otherwise. One was a report from the Analysis Group, an economic consulting firm: “These two responsibilities — assuring electric system reliability while taking the actions required under law to reduce CO2 emissions from existing power plants — are compatible, and need not be in tension with each other as long as parties act in timely ways.” This analysis was supported by the Energy Foundation, which works to promote energy efficiency and renewable energy.
Another consulting firm, the Brattle Group, also found that “compliance with the CPP is unlikely to materially affect reliability.” This report was commissioned by the Advanced Energy Economy Institute, a nonprofit that promotes “advanced” energy and describes the proposed EPA rule as “an opportunity to be embraced.”
The array of seemingly opposite conclusions has much to do with the fact that the Clean Power Plan is not yet in its final form, and that parties disagree about how quickly new generation facilities might be constructed. According to the Brattle Group report, North American Electric Reliability Corp. did not consider a wide variety of solutions to reliability concerns, including increasing uptake of energy storage technology and market incentives to improve performance. It is clear, though, that McCarthy’s statement is an oversimplification of a complicated topic.