PA Environment Digest Blog: PJM Interconnection: Concerns Remain On Grid Reliability With Final EPA Rule Setting Tougher Air Pollution Standards On New Gas, Existing Coal-fired Power Plants

Wednesday, May 8, 2024

PJM Interconnection: Concerns Remain On Grid Reliability With Final EPA Rule Setting Tougher Air Pollution Standards On New Gas, Existing Coal-fired Power Plants

On May 8, the PJM Interconnection issued a statement on the US Environmental Protection Agency's final rule setting New Source Performance Standards for Greenhouse Gas Emissions and its potential impact on electric grid reliability.

PJM said EPA adopted a number of recommendations made for changes in the rule suggested by regional electric grid operators, but said--

“Although we appreciate EPA’s adoption of certain flexibility measures in response to our proposals, areas of concern remain related to ensuring reliability given the impact of the Final EPA Rule:

-- The new rules governing both existing coal and new natural gas are premised on EPA’s finding that carbon capture and sequestration (CCS) technology represents the “best” system of emissions reduction, which will be commercially available at a reasonable cost.

However, the availability of CCS is highly dependent on local topology, such as salt caverns available to sequester carbon and the availability of a pipeline infrastructure to transport carbon emissions from individual generating plants to CCS sites potentially hundreds of miles away.

There is very little evidence, other than some limited CSS projects, that this technology and associated transportation infrastructure would be widely available throughout the country in time to meet the compliance deadlines under the Rule.

-- The Final Rule imposes the most stringent requirements on new gas and existing coal units that operate as baseload units.

Although EPA has focused on these units given that they have greater emissions, these baseload units provide a critical reliability role.

We are seeing vastly increased demand as a result of new data center load, electrification of vehicles and increased electric heating load.

The future demand for electricity cannot be met simply through renewables given their intermittent nature.

Yet in the very years when we are projecting significant increases in the demand for electricity, the Final Rule may work to drive premature retirement of coal units that provide essential reliability services and dissuade new gas resources from coming online.

The EPA has not sufficiently reconciled its compliance dates with the need for generation to meet dramatically increasing load demands on the system.

-- The Final Rule is premised on the availability of increased access to natural gas infrastructure to support the Rule’s “co-firing with gas” compliance option for existing coal units.

The present gas pipeline system is largely fully subscribed. Moreover, given local opposition, it has proven extremely difficult to site new pipelines just to meet today’s needs, let alone a significantly increased need for natural gas in the future.

The Final Rule, which is premised, in part, on the availability of natural gas for co-firing or full conversion, does not sufficiently take into account these limitations on the development of new pipeline infrastructure.

-- EPA has left many issues for development in individual state implementation plans. Although this is appropriate and in keeping with the structure of the Clean Air Act, each of the multi-state RTOs like PJM operate a single dispatch.

As a result, states will need to coordinate and work closely together to ensure that the individual state plans work well on a regional basis.

As a result, the need for regional coordination of individual State Implementation Plans is more important than ever.

PJM values its continued collaboration with the other affected RTOs (MISO, SPP and ERCOT) and looks forward to working with the U.S. EPA, individual states and affected stakeholders as this process continues.”

Click Here for the complete statement.

The PJM Interconnection ensures the reliability of the high-voltage electric power system serving 65 million people in all or parts of Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia and the District of Columbia.

Resource Links:

-- EPA Finalizes Standards To Reduce Pollution From Fossil Fuel-Fired Power Plants

-- Gov. Shapiro Unveils Cap-And-Invest PA Climate Emissions Reduction Initiative To Reduce Carbon Pollution From Power Plants; Update Alternative Energy Portfolio Standards To Diversify Electric Generation, Improve Reliability [PaEN]

-- Gov. Shapiro On Republican Reaction To His Energy Plan: They’ve Done Nothing And Power ‘Plants Have Closed On Their Watch;’ They’re ‘Used To Doing Nothing;’ ‘Doing Nothing Is Not Acceptable’ [PaEN]

-- Senate Republicans Reject Gov. Shapiro’s Offer To Work On Legislation To Make The Electric Grid More Reliable, Diversify Our Energy Sources, Lower Energy Costs For Ratepayers, Reduce Greenhouse Gas Emissions [PaEN]

-- Pennsylvania’s Electric Grid Is Dependent On One Fuel To Generate 59% Of Our Electricity; Market Moving To Renewables + Storage [PaEN]