Dive Brief:
- American Electric Power objects so vehemently to the Environmental Protection Agency’s proposed emissions reduction plan that it will publicly “be fairly aggressive that the rules won’t work,” according to COO Robert Powers.
- For utilities that do not want to achieve emissions cuts with increased renewables, more nuclear, or increased demand side efficiency, the EPA will require a 6% increase in coal efficiency or a 70% increase in the capacity factor of natural gas combined-cycle power plants, two advances that are, according to Powers, presently unattainable.
- “If we could improve the efficiency of coal plants 6%, we’d do it now,” he said at the Bank of America Merrill Lynch Power & Gas Leaders Conference, adding that, as is, the EPA's plan is "just not going to happen and something needs to give.”
Dive Insight:
The EPA’s Clean Power Plan, which will be finalized by June 2015, targets an overall cut in U.S. greenhouse gas emissions of 30% from the 2005 level by 2030 through state-by-state standards. That includes a 27.7% reduction for Ohio, where AEP is headquartered.
Existing natural gas plants presently have perhaps half the targeted capacity factor and, according to Powers, if coal plants could be 6% more efficient, market factors would have already driven them to do it.
Powers also expressed concern – based on the failure of adequate natural gas deliveries during the demand spike caused by last winter’s cold spell – that even if plants could double their output, the natural gas pipeline infrastructure is not in place to deliver the needed supply.
A recent federal Government Accountability Office report concluded that growing natural gas infrastructure and increased sources of alternate generation make widespread reliability concerns unlikely though regional shortfalls in natural gas are possible.
Powers added that the supply of renewables is inadequate to meet the emissions reduction targets.
