The EPA’s proposed rules on greenhouse-gas emissions will have a limited effect on coal in the U.S. That’s partly because a lot of coal-fired power plants were already on their way out. Since 2010, coal plants that produced about a sixth of the country’s coal-based electricity were slated for closure. About a third of those are already gone.
That’s partly because other regulations already on the books, like rules about mercury emissions, meant old plants were going to need pricey upgrades.
But even as more plants get pegged to close, the carbon rules won’t necessarily be to blame every time, says Christopher Knittel, an energy economist at MIT. “It’s going to be difficult to know exactly why a power plant shut down,” he says. “It’s going to be a combination of cheap natural gas, mercury rules, carbon rules and all the other environmental policies.”
However, he also thinks the new rule could have been a factor in plant closures that have already happened. “They shut down because of the rule that happened today, but they shut down two years ago, because of the expectation of that rule,” he says.
But the new and existing rules will only touch a minority of coal-fired plants. Travis Miller, a utilities analyst at Morningstar, says not all coal plants score badly on the metric the EPA cares about: carbon intensity. “Some new coal plants are very efficient,” he says, “and can emit relatively little for the amount of electricity they produce.”
Even with some older plants, closure may not the the best strategy for some utilities. “We don’t see a whole lot of coal-plant closures in states where you have the opportunity to lower the carbon-intensity with other sources,” says Miller.
The new rules let states take credit for bringing in more wind and solar— or for increasing energy efficiency. Older plants could keep running as part of that mix.
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