Currents – Energy Industry Insights, V 8, Issue 5, May 2024 | Spilman Thomas and Battle, PLLC

Impact of new EPA limits on greenhouse gas emissions

On April 25, 2024, the Environmental Protection Agency (EPA) published a set of regulations aimed at reducing air, water and soil pollution from fossil fuel power plants. The legislation would require existing coal-fired power plants and new gas-fired power plants to significantly reduce climate pollution, with compliance deadlines starting in 2030. Wastewater from coal-fired power plants.

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“The two new regulations are expected to require cleanup of coal ash at all known sites where the toxic byproduct has been stored.”

Why is it important: A pair of new environmental regulations finalized in April are expected to require massive cleanup of coal ash, the residue left from burning coal for electricity generation, across the country. The Effluent Mitigation Guidelines (ELG) and new coal combustion residue rules aim to clean up active landfills and require the cleanup of nearby landfills that are no longer operational. Under the new rules, operators will no longer be able to claim that ash-contaminated water comes from unregulated landfills. They will need to be cleaned up. Heavy litigation over these costly new regulations is expected. — Mark E. Heath

“A bill has been sent to Governor Glenn Youngkin’s desk to establish a bank that would put the state in a better position to receive federal clean energy loans.”

Why is it important: This article discusses Virginia Senate Majority Leader Scott Surovell’s recent proposal to create a Clean Energy Innovation Bank of Virginia (CEIB) that would initially fund the state with $10 million. The bank’s goal is to use more than $300 million in federal Inflation Reduction Act loans for a variety of clean energy projects in Virginia, such as solar panels, methane capture, electric transmission modernization, offshore wind and hydrogen reuse.

Governor Youngkin amended the bill in March to add a reenactment clause for reconsideration in 2025. Surowell argued that this delay would cause Virginia to lose federal funding because the funds would go to other states.

CEIB, organized as the State Energy Financing Institution, would be governed by a 12-member board that would include representatives from the Senate, House of Representatives, governor and state energy officials.

The proposed bank will support projects that reduce greenhouse gas emissions, increase the use of renewable energy, develop electric vehicle infrastructure and protect water resources. Lawmakers will reconvene to finalize the state budget, including CEIB funding, before the federal loan deadline in 2026. — Schenley N. Kent

“PECO Energy and Duquesne Light have urged the Commission to allow utilities to own energy storage assets while the Solar Energy Industry Association and other organizations seek third-party ownership opportunities.”

Why is it important: As battery storage technology becomes more common and commercially feasible, it is also becoming an important option for electricity distribution networks as a potential protection for system reliability in the modern context of increasing use of renewable energy as opposed to traditional, non-renewable baseload resources . It also raises new questions about how these energy storage assets should be treated (i.e. whether they are generated, distributed, transmitted, or some aspect of all three) and who should be able to own these assets while they are operational in the power system. Particularly in deregulated utility markets such as Pennsylvania, where utilities have divested the generation function, these issues raise important competition considerations where both utilities and third parties may seek to install such technology. The Pennsylvania Public Utility Commission recently issued a non-binding final policy statement after considering numerous comments from interested parties, concluding that energy storage facilities share common characteristics of all three phases of electric utility service and should be classified based on their specific function. Accordingly, the Policy Statement envisages the use and ownership of such resources by utilities as part of the distribution reliability function, but importantly does not limit such ownership to utilities alone, thus leaving third-party ownership as a viable option in the future. — Barry A.Naum

“There are just months left until the UK’s last coal-fired power station closes, almost 60 years after it first opened.”

Why is it important: The last coal-fired power station will close in the UK in September 2024. When the Ratcliffe-on-Soar power station opened in 1968, it was expected that the plant would operate for 25-30 years. It operated for 57 years and at one point supplied power to approximately two million homes. But Britain has focused on cutting greenhouse gas emissions and generated just one percent of its electricity from coal-fired power stations last year. There are plans to transform the plant site into a zero-emission technology center, with the likely addition of wind and solar power. — Mark E. Heath

“Congress approved $3.5 billion for carbon capture and storage projects last year, and some of those projects are in West Virginia.”

Why is it important: The article discusses a new rule proposed by the U.S. Environmental Protection Agency requiring coal and natural gas power plants to significantly reduce or capture almost all of their carbon dioxide emissions by 2038. Congress allocated $3.5 billion last year for carbon capture and storage projects, some of the funds are directed to West Virginia.

West Virginia University (WVU) scientists like Dr. Xingbo Liu are leading efforts in carbon capture technologies that aim to sequester CO2 deep underground or reuse it for new applications, such as creating nanomaterials to treat cancer.

Critics say carbon capture technology extends the use of fossil fuels, potentially hindering the transition to renewable energy sources such as wind and solar. Still, WVU researchers are exploring small-scale applications of carbon capture for everyday use in cars and homes. The main challenge remains the high costs of implementing these technologies and who will ultimately pay for them. — Schenley N. Kent

“The proposed corridors, which total more than 5,500 miles in targeted regions, could unlock federal funding.”

Why is it important: The article discusses the role that the Department of Energy and the federal government have taken on transmission issues, which have been a hot topic recently. Specifically, the article notes that DOE has identified 10 “transmission lines of national interest” and is currently seeking feedback on these lines in order to unlock significant funding from the federal government to modernize some or all of these areas. One such area is the approximately 280-mile PJM area stretching across the Mid-Atlantic: Maryland, Pennsylvania, Virginia and West Virginia.

Although investments in the transmission system are certain, who will ultimately pay for these investments and how much will depend on the decisions of FERC and the political decisions of the federal government. –— Carrie H. Grundmann

“As extreme weather increases in severity and frequency, the United States is looking for other ways to produce reliable forms of clean energy to help secure power grids and provide electricity during natural disasters and extreme weather.”

Why it’s important: The article discusses how Rye Development is converting a former coal mine in Bell County, Kentucky into a pumped storage facility known as the Lewis Ridge Pumped Storage Project. This facility will be the first in the US in over 30 years and the first on mining sites. The Department of Energy is providing $81 million for the $1.3 billion project, which is expected to begin construction in 2027.

The project will act like a giant battery, moving water between two reservoirs at different heights to generate electricity during periods of peak demand and store energy when it is plentiful. This closed loop system is environmentally friendly and can last up to 100 years. The facility will produce 287 megawatts of power, enough to power 67,000 homes and store electricity for up to eight hours. The article stated that the project would take four to five years to build and during that time it would create 1,500 construction jobs. Once construction is completed, there will be 24 permanent workplaces on site. — Schenley N. Kent

● EIA energy statistics

Here is a summary of the latest statistics regarding the energy industry.

ELECTRICITY

PETROLEUM

NATURAL GAS

COAL

RENEWABLE