EPA Short-Circuits the U.S. Power Grid

Author: Rich Nolan
Chart of surging energy demand.

On April 25, the U.S. Environmental Protection Agency (EPA) launched a blitz of regulations targeting the nation’s fossil-fuel power plants. In the center of the EPA’s crosshairs is America’s coal fleet, which remains a workhorse source of power across the country–and the leading source of electricity in more than a dozen states.

Why it matters: EPA’s suite of rules–anchored by a series of unachievable and exorbitantly expensive technology mandates–will force the closure of the nation’s existing coal plants nearly overnight. They’ll also make it all but impossible to build new baseload coal and natural gas power capacity.

While the confetti may be falling at EPA headquarters, the agency’s plan to effectively disassemble the foundation of our power supply has gone over like a lead balloon with the nation’s utilities, electricity grid operators, and grid reliability regulators.

EPA’s blitz of rules couldn’t come at a worse time.

The big picture: The nation’s grid reliability experts have repeatedly warned–with increasing urgency–that the U.S. is in a grid reliability crisis, with much of the nation soon to face potentially crippling power shortfalls. The EPA has now all but ensured it.

  • As we outlined in our recent white paper, EPA’s reckless agenda is colliding with surging power demand from energy-hungry data centers, resurgent manufacturing investment, and the Biden administration’s own push for the rapid uptake of electric vehicles.

The North American Electric Reliability Corporation (NERC), which oversees the reliability of the nation’s grid, warned in December that “key measures of future electricity demand and energy needs are rising faster than at any time in recent years.

  • NERC also warned that rising demand, along with accelerating power plant closures, threaten blackouts for most of the country within a decade.
  • NERC specifically pointed to environmental regulations “that are overly rigid” as jeopardizing “the orderly transition of the resource mix.

EPA has operated as if NERC’s report–and the countless other warnings from the electricity industry and reliability experts–simply doesn’t exist. In fact, EPA didn’t even bother consulting the nation’s grid reliability regulators on the potential impact of its rules.

As far as the EPA is concerned, additions of wind and solar power will fill the gaps opened by the loss of the nation’s coal fleet, and meet soaring new power demand. But that is simply dangerously wishful thinking that doesn’t reflect on-the-ground reality.

Not only are intermittent sources of power ill-suited to replace the on-demand electricity provided by dispatchable coal plants but the Biden administration’s promised renewable energy buildout isn’t materializing at nearly the speed or scale once hoped.

Go deeper: High interest rates, supply chain bottlenecks, and local opposition to industrial-scale wind and solar installations are proving enormous challenges.

  • A lack of progress on building the high-voltage interstate transmission lines needed to move distant wind and solar power to population centers is a case in point.
  • The administration has said the U.S. needs to double or triple the nation’s interregional transmission lines in a decade to enable a renewable-dominated grid.
  • But the pace of transmission additions is actually falling, not speeding up, reaching a decade-low of just 251 miles last year.

The bottom line: What we’re left with is a rapidly widening gulf between the supply of power we need and the supply we’re going to have available. When electricity rationing, soaring power prices, and blackouts come, there shouldn’t be any confusion over who is to blame. The warnings couldn’t have been any clearer. This is a self-made crisis and the buck stops with the Biden EPA.