Last Wednesday, the Supreme Court declined to halt enforcement of the Environmental Protection Agency (EPA)’s egregious greenhouse gas regulations on coal and gas-fired power plants. This rule will potentially shutter coal and natural gas plants currently supplying 60% of the nation’s electricity.
However, the Court believes “the applicants have shown a strong likelihood of success on the merits.”
The EPA’s rule, issued in April, mandates coal-fired and new gas-fired power plants set to operate past 2039 to capture 90% of their carbon emissions by 2032. Coal plants that agree to shut down by 2032 are exempt from the rules. Coal plants agreeing to retire before 2039 but after 2032 still need to capture some emissions but do not need to capture 90%.
The only plausible way to adhere to this rule is through costly and unproven carbon capture technology. In the U.S., only 15 CCS systems are operating, which capture only 0.4% of U.S. emissions and are almost exclusively used for enhanced recovery efforts in natural gas extraction because “the cost to implement CCS technology exceeds its value in most potential settings.” There is also not enough “time to permit, finance, and build the CCS infrastructure.” The result will be forcing coal plants into a “retrofit or retire” scenario—with forced retirement being the likely outcome if this rule isn’t challenged.The U.S. Court of Appeals for the D.C. Circuit is expected to make its decision early next year and before the compliance deadline of June 2025. It may also be the case that the justices are waiting to determine the outcome of the presidential election. As Utility Dive observes:
If the Harris-Walz ticket prevails, the administration would likely continue defending the rule… But even if the D.C. Circuit upholds the rule, the Supreme Court could have the final word on it, ClearView said.
Under a Trump administration, the EPA could ask the appeals court to remand the rule so the agency could rework it, ClearView said. It could also voluntarily implement an administrative stay of the rule while it reconsidered the regulation, according to the firm.
In simple language: the Court thinks the case brought by the utilities, independent power producers, and others will be successful on “at least some of their challenges,” if it reaches the Court, but it believes harm won’t occur if the rule isn’t paused ahead of November. That’s unfortunate news because utilities and grid operators must plan five to ten years in advance for plant closures—or to begin procuring commercially viable CCS systems that do not yet exist. The rule will ultimately endanger grid reliability in the name of net-zero policies. The proposed replacements for coal and natural gas would be inadequate to meet the growing electricity demand. As IWF CEC Director Gabriella Hoffman noted earlier this year:
The EPA rule would lead to grid instability because operators will be forced to adopt intermittent, unreliable, and costly sources like wind and solar. According to the Department of Energy, wind is only reliable 33.5% of the year while solar is dependable for just 24.9% of the time. Wind energy generation decreased for the first time last year. The federal government reports wind generation hit maturity with slower recorded wind speeds, despite adding 6.2 gigawatts of new wind capacity. Solar energy also had a bad 2023 with over 100 companies going bankrupt and expensive electricity rates. Many planned solar plants, including those receiving Inflation Reduction Act subsidies, are predicted to be canceled this year due to price collapse and waning demand.
The D.C. Circuit has set oral arguments for December 7, 2024. Given the Supreme Court’s view that the Clean Power Plan 2.0 will be successfully challenged on at least some of its merits, it’s likely waiting to see what happens in November.