EPA’s just-released Clean Power Plan final standards will cut carbon pollution from our nation’s power plants while protecting grid reliability. EPA’s standards give states the time and the flexibility to design customized plans for emissions reduction, such as increasing the use of wind, solar, and energy efficiency; making changes at existing power plants; and even trading emissions reductions with other states.
Coupled with these design flexibilities are backstop reliability protections that will protect the grid in the case of wholly unpredictable emergency events while keeping the states on track to meet their final targets. States also are required to take grid reliability into account in designing their plans. And grid operators, states, and federal agencies will be working together and watching closely to ensure reliability.
In short, the power grid will remain strong as states implement the Clean Power Plan. Here are 10 key facts on how the final standards protect grid reliability:
- States have plenty of time to plan and prepare for compliance. While EPA’s proposal gave states one year to file compliance plans (2016) in advance of compliance in 2020, the final standards allow states more time: final state plans are not due until 2018, and compliance will not begin until 2022. States will have more time to consider their options for reducing emissions. They will also have longer lead times to get any necessary programs or infrastructure in place to support additional resource development.
- Targets are phased in more slowly. EPA changed the way interim targets are set from the proposal, by embracing feedback that changes to the electric power system — such as increases in natural gas use — will be phased in gradually over the entire interim period. This eliminates any claims that the standards will create a “compliance cliff” early in the compliance period.
- States must consider reliability issues in developing compliance plans. EPA is encouraging states to consult with grid planners and operators regularly during design and implementation to ensure there will not be reliability issues from state plans. This is really just common sense, since grid operators already have well-functioning regional grid planning processes in which states can and do participate.
- Flexible, market-based compliance options — including interstate trading — mean that states can design plans around any anticipated reliability issues. The final standards encourage states to adopt flexible implementation tools that include averaging, trading and other market-based mechanisms. These flexibilities account for the power system as a whole, rather than focusing solely on specific plant performance. Using these tools, plants needed for reliability purposes can run whenever needed and cover their carbon emissions using the Clean Power Plan’s many flexible mechanisms.
- A reliability provision — expected to be used rarely — allows states to address situations where individual power plants are needed for reliability. EPA incorporated comments by adding a “reliability safety valve” that lets states obtain short-term deferrals of the emission standards in extraordinary circumstances when a polluting power plant is needed to maintain reliable service. States that build flexibility into their plan design should not need to use this provision. In any event, if fossil fuel-fired plants are needed for the longer term, excess emissions will be counted against the states’ overall goal, and states will need to make up the additional emissions through reductions elsewhere or revise their implementation plans to stay in compliance.
- Grid operators have many tools to protect grid reliability. Existing grid operator reliability practices – including legally binding reliability standards, planning and operations practices, and market design, are a strong foundation on which to address grid reliability issues occurring for any reason. Grid operators also can help states by using the best available modeling tools and practices to evaluate state plans’ impacts on grid reliability and investments.
- Three key federal agencies are working together to analyze and coordinate reliability oversight. EPA will be engaged with the Federal Energy Regulatory Commission and the US Department of Energy to review the status of state implementation plans. EPA will continue to work with these federal agencies, as well as state and regional grid operators, to ensure reliability is preserved as changes to the electric system occur.
- States can modify plans if necessary. States can seek to revise their plans for a number of reasons; EPA will expedite review of requests that are based on reliability concerns.
- States can take advantage of ever-decreasing renewable energy costs. Clean power costs have fallen dramatically and continue to decline. Wind and solar power are much more competitive with coal and natural gas. That’s good news because the grid can reliably handle much higher levels of renewable power than envisioned under the Clean Power Plan.
- Existing state policies and market trends are the foundation for cutting pollution in harmony with the grid. To achieve the Clean Power Plan’s standards, states can rely on a mix of emissions-reducing strategies — expanding the amount of wind, solar, and other renewable energy; starting or expanding energy efficiency programs; improving transmission efficiency; and more. All of these actions already are well underway and the grid is evolving to integrate them, reliably.
All Americans share an interest in reliable electricity. Our country has a 40-plus year track record showing that environmental progress and electric reliability are compatible. The bottom line is that trading, banking, and other market based mechanisms, extended initial compliance, and states’ consideration of reliability needs will assure reliability.
John Moore is a senior attorney with the Natural Resources Defense Council. He works primarily on high power electric grid policy reforms.