According to a recent analysis by the Center of the American Experiment (CAE), the proposed rules by the Environmental Protection Agency (EPA) targeting carbon dioxide emissions for power plants may result in extensive blackouts in a significant portion of the Midwest and might amass costs nearing $250 billion.
The EPA’s proposal mandates that fossil fuel-powered plants adopt nascent technologies, including carbon capture and sequestration (CCS) and hydrogen blending, to drastically reduce their greenhouse gas emissions in the upcoming decades. However, the CAE argues that the EPA overestimates the performance capabilities of wind and solar power. This could jeopardize the reliability of electricity for the 45 million residents within the jurisdiction of the Midcontinent Independent System Operator (MISO) power grid.
In a pointed critique, CAE commented, “The EPA does not appear to have the expertise necessary to enact such a sweeping regulation on the American power sector.”
The projections from CAE suggest potential massive blackouts spanning the 15 states served by MISO. Their stress tests estimate nearly 20 percent of MISO-covered households could be left in the dark. The cost of establishing adequate capacity to prevent such blackouts in the MISO region is projected at a staggering $246 billion by 2055, breaking down to an annual average of $7.7 billion. This annual number overshadows the EPA’s projected nationwide annual benefit of $5.9 billion from these proposals.
Isaac Orr, a policy fellow for the CAE who authored the analysis, explained the EPA’s assumptions: “EPA is required to justify any proposed regulations… Unfortunately, EPA used misleading assumptions in its analysis that don’t accurately reflect their impact on the reliability of the grid or their cost.”
Meanwhile, the Edison Electric Institute, a premier trade group for American energy companies, pointed out the legal insufficiencies in the EPA’s assertions regarding the proven efficacy of hydrogen blending and CCS.
Addressing these concerns, an EPA spokesperson clarified that the rule doesn’t necessitate power plants to shut down. Instead, it focuses on integrating “proven technology to abate greenhouse gas emissions.” They emphasized the ample time provided to power plant operators for compliance, promoting informed planning and investment choices that uphold the sector’s commitment to dependable and affordable electricity.
However, the credibility of two technologies highlighted by the EPA—CCS and hydrogen blending—is under scrutiny. A 2022 report by the Institute for Energy Economics and Financial Analysis revealed that most global CCS projects either underdelivered or failed. Furthermore, the Pipeline Safety Trust’s 2022 report raised safety and effectiveness concerns about hydrogen blending.
The EPA’s proposed regulations align with the Clean Air Act, reflecting the boundaries established by the Supreme Court in West Virginia v. EPA (June 2022). These proposals are in sync with the Biden administration’s broader vision of achieving net-zero carbon emissions for the U.S. power sector by 2035 and the entire American economy by 2050.
The Competitive Enterprise Institute commented that the objectives of these new proposals exceed the ambitions of the Clean Power Plan (CPP), an initiative from the Obama era that sought stringent regulations on fossil fuel power plants. The CPP became a cornerstone of West Virginia’s successful legal challenge against the EPA.
Echoing these concerns, Mark Christie from the Federal Energy Regulatory Commission (FERC) cautioned in June about the severe repercussions awaiting the U.S. if fossil fuel power plants are retired prematurely before green energy replacements are primed for large-scale electricity generation.