Rest of world policyEPA sees exciting future for utilities as Clean Power Plan takes effect
This week, the Clean Power Plan passed a significant milestone when it took effect as US law.
It kicks off what will be an “exciting” decade for the utility sector, says Janet McCabe, acting assistant administrator for the Office of Air and Radiation at the US Environmental Protection Agency (EPA) and the senior official with responsibility for the plan’s implementation.
The far-reaching scheme is a central plank of president Obama’s climate strategy, and aims to cut CO2 emissions from the power sector to 32% below 2005 levels, by 2025.
It faces multiple legal challenges and will not substantively impact on the power industry until states draw up their compliance plans by 2018.
When Carbon Brief spoke with McCabe earlier this month, she said EPA is “confident that it will survive legal challenge”. She also says that the utility industry “see it as an opportunity” and that it is in line with changes already underway, in what is set to be an “exciting” 10 years for the sector.
McCabe explains:
It’s for that reason, if for no other, that we’re all confident this whole programme will move forward, because it’s pushing along the activities that the businesses are already involved in…[Solar and wind] are becoming cost competitive with fossil fuels. That’s new and recent and very exciting. So that’s what the businesses are going to do, they’re going to go with the cost effective technologies.
Carbon Brief produced a detailed Q&A on the Clean Power Plan earlier this year. You can read a full transcript of the interview with McCabe below the video.
Carbon Brief: Thanks very much Janet for finding time to talk to us.
Janet McCabe: You bet!
CB: I’d like to go straight in with a question about the Clean Power Plan. I guess within the EPA you’ve been almost wargaming, thinking about potential scenarios for if a Republican enters the White House in 2016. What are your thoughts on how they might try to undermine the CPP and how the EPA might defend against that?
JM: I think it’s important for people to understand the status of the CPP in American law. It’s not an executive order that can be changed out by a new president coming in. It’s a regulation that went through a very elaborate, established process, that our Clean Air Act authorises. So it’s law. In order for it to be changed, any new president, the new EPA, would need to go through a similar, lengthy and public process, with reasoned decision-making and a record, to take a different approach.
So that’s one thing to keep in mind. Another is, I know there’s a lot of talk about the legal challenges that we’ve had. EPA gets legal challenges on almost everything that we do. We have a system that allows people to do that and that’s fine. But the CPP like so many rules the EPA has established over its more than 40-year history is very well-grounded in the principles of the Clean Air Act and in our authorities within the Clean Air Act. It is not an innovative rule in that sense. So we are confident that it’s going to survive legal challenge and that it’s on very sound footing, and we’ll work through that process.
CB: People talk about other ways that it might be possible to undermine the CPP. What impact would it have if funding was taken away from the EPA?
JM: Well, we have a public budget process as well that Congress is involved in and we work through those issues with them. We’re confident that we’ll come out on the other end with the ability to do this work. Increasing numbers of the American people are being clear, through polls and otherwise, that they are very supportive of this programme going forward.
As or more important, the utility industry has been talking about how doable this is and how they want the certainty, they appreciate the signals this rule sends for where the market is already going. It allows them to focus, constructively and positively on investing in the ageing power infrastructure that we have in our country.
They see it as an opportunity, and it’s for that reason if for no other that I think that we’re all confident that this programme will move forward because it’s pushing along the activities that the businesses are already involved in and it’s so consistent with the way corporate thinking is going. Let’s build new infrastructure, let’s invest in an ageing fleet, let’s look at innovative technologies that are becoming more and more cost competitive.
We’ve had solar installations, more than 30 times as much solar power now as there was at the beginning of the Obama administration. More than three times as much wind power. Amazingly, those technologies are becoming cost competitive with fossil fuels. That’s new and recent and very exciting. So that’s what the businesses are going to do, they’re going to go with the cost effective technologies.
CB: Republicans have been trying to undermine confidence in the US’s commitment to following through on its climate pledge. What would be your message to other countries around the world?
JM: I think the United States is showing its clear commitment to this issue by the presence that we have here [at Paris COP21], by the way president Obama and secretary Kerry and our other officials here are making clear that the United States is committed to these activities and that we have many many things underway, that are going full force, that we are going to deliver on. Someone was saying earlier we have a very robust democracy in the United States. We’re not the only country that does by any means, but that’s what your seeing in action, is that robust democracy, exercising itself. What your also seeing is, action after action being taken and being put in process by this administration that we’ll follow through on.
CB: Looking ahead, how would you expect the US power sector to look in say, 10 or 15 years?
JM: That’s a really good question. I think it will look very exciting. I already mentioned the huge increase in the amount of solar and wind energy that’s coming in. We will see transformation happening, and I think the other exciting thing that’s happening is the innovation and technology. So, increases in distributed energy for example. One of the things we made sure in the CPP was we wanted to make sure that the benefits of the clean, low carbon energy system are shared by everybody in the United States and the economic positives that come with that and the jobs that come from that investment are shared broadly across our economy and across the people of the United States.
So we made sure in the CPP to direct the states, who have the job now of actually implementing that at the state level, to make sure they had a process that was inclusive, so that everybody got to weigh in.
We’re already seeing energy efficiency companies bellying up to the bar and saying ‘we have a part to play here and we can be very positive’. Renewable energy companies, innovative technologies of all sorts, because this has far-reaching tentacles. So anything that a manufacturing facility or a business can do, to reduce its energy consumption is going to help that state meet its carbon goal. All kinds of technologies and approaches can come into play there. So there will be a lot of activity.
Think of where we were 10 or 15 years ago, just now, and look at all the things, we wouldn’t have predicted, I don’ think, we’d be where we are now. So it’s almost hard to imagine what we’ll be like but I think there’ll be more windmills, there’ll be more solar panels, there’ll be more sophisticated exchange of clean energy across the broad regions in our country where the grid is interconnected. There will be developments I am sure, in things like battery storage, which will be hugely important to managing energy across time and across the year, so it’ll be exciting to see.
CB: You talked about states now having the job of putting the CPP into action. About half the states are involved in legal action against this. How many would you expect to be preparing a compliance plan?
JM: Virtually all of them, if not all of them. People are taking the actions that they feel they need to take, but at the level of the officials whose job it is to actually implement these plans, we’re having discussions with all of them, and all of them are doing the kinds of work that you would do in order to get started on this. That just makes sense. You hear from some states, well, we’re suing, but we think it’s smart for us to do a plan anyway. You may know that if a state chooses not to do a plan, EPA has the job of putting a plan in place. States very much would prefer to be in charge of their own plans rather than have EPA do it, so even if they’re suing us, even if they’re objecting to the plan, they’re all doing the necessary work and they’re working with their industries and their utilities, who want them to move forward.
CB: Would you expect any of them to take Mitch McConnell’s advice, and just say no [to the CPP]?
JM: I really don’t know, I wouldn’t want to handicap that. I really do think that the vast majority of states will be participating.
CB: We’ve talked about innovation already, solar and storage and windmills. What role do you see for carbon capture and storage in the US power sector?
JM: That’s a really good question and another exciting area. Our Department of Energy is heavily involved in trying to encourage the development of that technology. One of the challenges is to bring the costs down. There are some projects that are going forward. This isn’t just a domestic research area, there’s research going on across the world. In our new power plant standard we did base our standard on some amount of carbon capture and sequestration. We’re confident that those projects will come forward. That may be something that 10 or 15 years from now we see quite a difference.
CB: Do you have a view on the recent UK decision to scrap its £1bn to support CCS?
JM: I don’t know that I have a view on that, I don’t know enough about the specifics of it to comment.
