Abby L. Harvey
GHG Monitor
5/29/2015
Implementation of the Environmental Protection Agency’s proposed carbon emissions standards for existing coal-fired power plants could more than double the number of coal-fired power plant retirements expected by 2040, according to a report released by the Energy Information Agency late last week. The report was requested by the House Science, Space and Technology Committee to analyze the potential effects of the proposed regulation, which would require states to develop action plans to meet federally set emission reduction goals. According to the report’s base case, an expected 40 GW of coal plant retirements is projected by 2040. If the Clean Power Plan were to be implemented as proposed that amount would jump to 90 GW. “Retirements of inefficient units fueled by natural gas or oil, generally involving primary steam cycles, are also projected to rise,” the report says.
The increase in retirements can be explained by a reliance on fuel switching to reach initial compliance goals. “Switching from coal-fired generation to natural gas-fired generation is the predominant compliance strategy as implementation begins, with renewables playing a growing role in the mid-2020s and beyond. Demand-side energy efficiency plays a moderate role in compliance, relative to the early role of natural gas and the eventual role of renewables,” according to the report.
Electricity Prices Set to Rise
The report also finds that electricity prices would increase under the proposed regulation, mostly in the early 2020s due to initial compliance efforts. “Increased investment in new generating capacity as well as increased use of natural gas for generation lead to electricity prices that are 3 [percent] to 7 [percent] higher on average from 2020-25 in the Clean Power Plan cases, versus the respective baseline cases,” the report says. Prices in most regions are projected to stabilize by 2030 but some areas of the country will continue to have increased prices for some time. “In Florida and the Southeast, the Southern Plains, and the Southwest regions the projected electricity prices in 2030 are roughly 10 [percent] above baseline in the Base Policy case,” according to the report.
