The Environmental Protection Agency’s proposed greenhouse gas emissions standards for power plants could hurt grid reliability, with the potential for “significant power shortages,” according to major U.S. grid operators.
“The joint [independent system operators/regional transmission organizations] are concerned that the proposed rule could result in material, adverse impacts to the reliability of the power grid,” four of the largest U.S. grid operators said in joint comments to the agency Tuesday.
Their reliability concerns mainly stem from the chance that the EPA is overestimating how quickly technological advances may occur in “green” hydrogen production, transport and generation, as well as in carbon capture and storage, or CCS — the key compliance pathways for meeting the proposed rule, according to the Electric Reliability Council of Texas, the Midcontinent Independent System Operator, the PJM Interconnection and the Southwest Power Pool, organizations that operate the grid in 30 states and the District of Columbia, serving about 154 million people.
“If the technology and associated infrastructure fail to timely materialize, then the future supply of compliant generation — given forced retirements of non-compliant generation — would be far below what is needed to serve power demand, increasing the likelihood of significant power shortages,” the grid operators said.
Also, the proposed rule could speed the retirement of fossil-fueled power plants before they can be replaced with new generation that can supply needed reliability services, the grid operators said.
In a near-term threat to grid reliability, power plant owners may decide to retire their units or skimp on maintenance because of the financial risks related to the proposed rule and other power sector-related EPA regulations, the grid operators said.
In May, the EPA proposed greenhouse gas emissions limits for coal-, gas- and oil-fired power plants, with initial requirements beginning in 2030 for coal-fired generators and 2032 for gas-fired units. The limits can be met by highly efficient operations, carbon capture and sequestration, co-firing natural gas for coal units, and with green hydrogen for gas generators, according to the proposal.
The proposal requires coal-fired power plants that intend to operate past 2039 to install CCS that captures 90% of carbon emissions. Coal plants that plan to retire by 2035 and run at no more than a 20% capacity factor and units that will be shuttered before 2032 don’t face GHG emissions limits.
Gas-fired combustion turbines larger that 300 MW and with at least a 50% capacity factor have two compliance options: CCS with 90% carbon capture by 2035, or co-firing of 30% low-GHG hydrogen beginning in 2032 and co-firing 96% starting in 2038, according to the agency.
The power sector accounts for about a quarter of U.S. carbon emissions, according to the EPA.
Grid operators see inadequate reliability analysis
By solely focusing on resource adequacy — the need for enough energy supplies to meet demand — the EPA failed to adequately assess how its proposal would affect grid reliability, according to the grid operators.
They said the EPA didn’t consider the grid operators’ need for various grid services and attributes needed to maintain reliability, such as inertia, primary frequency response, reactive power support, system stability, system strength, frequency regulation, ramping, flexibility, dispatchability, black start capability, fuel and energy assurance, and extreme weather performance. Currently, those attributes are generally supplied by thermal power plants, according to the grid operators.
The grid operators urged the EPA to assess how its proposal would affect grid reliability using additional metrics around essential reliability services and attributes.
If EPA moves forward with the proposal, the grid operators asked the agency to create a sub-category of existing power plants for units that RTOs and ISOs deem needed for grid reliability. The units would be allowed to run past compliance deadlines until longer-term solutions, such as transmission, demand response or new generation resources are in place, they said.
The EPA should also allow carbon allowance trading on at least a regional scope to allow for greater flexibility and incentivize “over-compliance” by generating units that can exceed the standards, the grid operators said.
ISO-NE warns of unintended consequences
Separately, ISO New England warned the proposal could have unintended consequences.
The proposed rule, for example, would regulate natural gas combined-cycle power plants that are larger than 300 MW and run at a greater than 50% capacity factor, ISO-NE said. As a result, generators may opt to run smaller, less efficient units, increasing carbon emissions, the grid operator said.
Also, New England lacks the geology to make storing carbon dioxide or hydrogen underground feasible, according to ISO-NE.
ISO-NE said it didn’t have enough time to thoroughly assess the effects of the proposal.
The EPA proposed allowing power plants to run without complying with the proposed rule if shuttering them would hurt grid reliability. The California Independent System Operator asked the EPA to establish additional pathways so power plants could run temporarily if needed to support grid reliability.
The New York Independent System Operator and the North American Electric Reliability Corp. didn’t file comments on the proposal, officials from NYISO and NERC said.
The Federal Energy Regulatory Commission plans to review the EPA’s proposal at its annual grid reliability technical conference, set to be held Nov. 9.
