Abby L. Harvey
GHG Monitor
11/7/2014
A more timely approach should be taken in implementing the Environmental Protection Agency’s proposed carbon regulations for existing coal burning power plants in order to address some potentially significant false assumptions made by EPA in developing the rule concerning infrastructure, time constraints and reliability impacts, according to a report released this week by the North American Electric Reliability Corporation (NERC). “NERC Reliability Standards and Regional Entity criteria must be met at all times to ensure reliable operation and planning of the [Bulk Power Systems]. Based on NERC’s initial review, more time would be needed in certain areas to ensure resource adequacy, reliability requirements, and infrastructure needs are maintained. The EPA, FERC, the DOE, and state utility regulators should consider their regulatory authority to make timing adjustments and to grant extensions to preserve BPS reliability,” according to the report.
Much of NERC’s stated concern boils down to the proposed timeline of the regulations, dubbed the Clean Power Plan, which sets state-specific carbon emission reduction goals and requires the states to develop action plans to meet those goals. “The proposed CPP aims to cut CO2 emissions from existing power plants to 30 percent below 2005 levels by 2030. Under the EPA proposal, substantial CO2 reductions are required under the State Implementation Plans (SIPs) as early as 2020. According to the EPA’s Regulatory Impact Assessment, generation capacity would be reduced by between 108 and 134 GW by 2020,” the report notes. “The number of estimated retirements identified in the EPA’s proposed rule may be conservative if the assumptions prove to be unachievable. Developing suitable replacement generation resources to maintain adequate reserve margin levels may represent a significant reliability challenge, given the constrained time period for implementation.”
Time for Infrastructure Expansion Not Addressed in Plan
The Clean Power Plan calls for significant fuel switching from coal to natural gas and renewables, which emit less, or no, carbon. The problem with this mix-up in the energy system is that much of the infrastructure, in the form of pipelines and transmission lines, to facilitate that transition don’t exist and installing said infrastructure takes a significant amount of time which is not provided for in the plan, the report says. “State and regional plans must be approved by the EPA, which is anticipated to require up to one year, leaving as little as six months to two years to implement the approved plan. Areas that experience a large shift in their resource mix are expected to require transmission enhancements to maintain reliability. Constructing the resource additions, as well as the expected transmission enhancements, may represent a significant reliability challenge given the constrained time period for implementation,” according to the report.
In developing the Clean Power Plan, the report says. The EPA assumed that transmission capacity would “be available to deliver any resources located in, or transferred to the region.” However, given the potential fuel switching needed to reach the EPA goals, new energy generation facilities might need to be constructed, new natural gas pipelines may need to be built to handle an increased demand and lines to remote, rural areas may need to be installed to reach potential renewable energy installations. “A construction timeline for a new high-voltage line can range from 5 to 15 years depending on the voltage class, location, and availability of highly skilled construction crews,” the report explains. “The construction of transmission assets is a very lengthy process starting from planning to the actual physical construction. It is recommended that any policies that could potentially impact the reliable operation of the transmission system also consider the associated timeline for implementing plans.”
Extreme Weather Could Cause Further Reliability Concern
A move away from coal and increased dependence on natural gas could cause significant reliability issues should the nation experience a repeat of last year’s Polar Vortex, according to the report. “Overdependence on a single fuel type increases the risk of common-mode or area-wide conditions and disruptions, especially during extreme weather events,” the report explains. “Disruptions in natural gas transportation to power generators have prompted the gas and electric industries to seek an understanding of the reliability implications associated with increasing gas-fired generation. For example, adverse winter weather, such as that experienced during January 2014, provided signs of natural gas supply and deliverability risks. This can be a local issue in areas where there is already a heavy concentration of natural gas generation.”
NGOs Weigh in On Report
The American Coalition for Clean Coal Electricity, which has opposed the Clean Power Plan since it was proposed in June, pointed to the report as further evidence that the proposed regulations are unworkable, in a press release this week. “EPA is in the dark about its own regulations. Contrary to the agency’s own assertion, EPA’s carbon proposal will most certainly cause ‘the lights to go out’ on American families, businesses and our economy,” said Laura Sheehan, senior vice president for communications at ACCCE. “While the Obama Administration peddles fire-and-brimstone warnings about climate change, the warnings we should be paying attention to are coming from NERC and other groups who are sounding the alarm on EPA’s faulty calculations and the grim consequences of taking affordable, reliable coal-based generation offline.”
David Doniger Policy Director of the Climate & Clean Air Program for the National Recourses Defense Council stated during a press call this week that the NERC report did not pay adequate attention to the flexibility built into the plan, which could address the issues raised. “They need to think outside the blocks. They are taking the four building blocks too literally and there are many, many options that states have,” he said. “We think that the proposal already has adequate flexibility to deal with the reliability issues.”
