Wind and solar cheer as coal vows legal battle on energy plan
THE WIND and solar industries cheered while coal companies vowed to kill President Barack Obama’s new limits on climatechange pollution as details of the historic regulations emerged on Sunday.
The rules, unveiled at the White House on Monday, include tougher limits on planet-warming carbon emissions and more incentives for renewable energy than originally expected. That may also mean fewer benefits for natural gas or nuclear power than anticipated. The outlook for coal remained bleak as ever.
“The renewable energy sector should be a clear winner while merchant coal-fired generators could end up the big losers,” Paul Patterson, a New York-based utility analyst for Glenrock Associates, said in an e-mail. “Given the rules’ complexity and controversy, those who could likely stand to benefit the most in the end might be the lawyers.”
Dubbed the Clean Power Plan, the package is Obama’s most ambitious effort to tackle industrial pollution that scientists blame for dangerous increases in global temperatures. The Environmental Protection Agency regulations demand deep reductions in carbon emissions by curbing reliance on coal and natural gas. The rules are designed, in part, to put the US on track to meet goals the government has set out in negotiations for a global accord on climate change.
“Without a doubt, EPA’s final Clean Power Plan will be the most comprehensive, far-reaching regulation ever promulgated by the federal government to impact the electric power sector,” said Tom Kuhn, president of the Edison Electric Institute, a Washingtonbased utility trade group. EEI says utilities plan to shut or retrofit about 73 gigawatts of coal plant capacity by 2022, enough to power 36 million households.
The regulations, if they survive legal challenges, are expected to transform the US power market, spurring the retirement of dozens of coal-fired plants and encouraging their replacement with natural gas, renewables and other forms of low- or nocarbon electricity. Monday’s final version is expected to give states two extra years to comply, with the measure taking effect in 2022.
“In today’s marketplace their best compliance option is clearly solar,” Rick Umoff, counsel for the Washington-based Solar Energy Industries Association, said in an e-mailed statement. A more flexible timeline under the plan “will only further encourage states to act early so they can take advantage of the booming solar economy and any compliance incentives that the EPA might offer.”
The view was far different among coal companies, which are already slumping amid challenges from cheap natural gas and tougher pollution standards. Peabody Energy Corp., the biggest US coal producer, last week suspended its dividend and cut its sales forecast. Miner Alpha Natural Resources Inc. is expected to file for bankruptcy protection as soon as Monday.
Whatever the details of Obama’s final plan, “it’s illegal and we will not stop opposing it until it is withdrawn completely,” Laura Sheehan, a senior vice president at the American Coalition for Clean Coal Electricity, said in a statement. “The president’s relentless climate crusade cannot be put ahead of the priorities of hardworking Americans who will pay the ultimate price of staggering electricity bills and lost jobs.”
The impact on utilities will vary depending on each company’s mix of coal, nuclear and other fuels.
The industry has pushed for a longer timeline to comply, arguing a quicker transition would threaten the reliability of the electric grid.
“We are hopeful that the EPA has taken into consideration the feedback they have received from utilities and other stakeholders,” said Paige Sheehan, a spokeswoman for Charlotte, North Carolinabased Duke Energy Corp., the nation’s largest utility owner by market value. “It’s a very dense regulation. We’ll take some time to review it.”
The Tennessee Valley Authority, the governmentowned utility serving nine million people in the southeast, is prepared for the new rules, said Scott Brooks, a spokesman for the Knoxville, Tennessee agency. — WP-Bloomberg