The US power industry has slammed proposed regulations that would require natural gas plants to either be fired with a blend of hydrogen or capture CO2 emissions, as neither technology has been sufficiently demonstrated or shown to be reliable or affordable.
In May, the US Environmental Protection Agency (EPA) tabled a suite of new emissions guidelines that would require new gas-fired power plants to either use carbon capture and storage (CCS) with a 90% capture rate by 2035, or opt for 30% co-firing of hydrogen by volume by 2032, ramping up to 96% by 2038.
The guidelines would also apply to existing facilities with a nameplate capacity at or above 300MW and a capacity factor of 50% or higher.
Hydrogen used for this purpose would also have to have a low emissions intensity of up to 0.45kg CO2/kgH2.
However, trade association Edison Electric Institute (EEI), which represents all the country’s investor-owned utilities, argues that the EPA should “repropose” these guidelines due to a lack of evidence that hydrogen and CCS will be the best systems of emissions reduction — or exercise “considerable enforcement discretion” if these technologies fail to perform as expected or are not available on the regulator’s timelines.
“Neither CCS nor hydrogen blending are adequately demonstrated today as they are not deployable, available, or affordable across the entirety of the industry, and the attendant supporting infrastructure will take more time than EPA predicts to deploy,” the association wrote in a letter sent to EPA administrator Michael Regan yesterday.
“This assessment factors in the timelines that EPA proposes for standards that may not be applicable until several years in the future. Accordingly, unit owners and operators have significant concerns about the achievability of the proposed standards,” it added.
The EEI argues in the letter that while individual, constituent elements of hydrogen blending or CCS have been demonstrated, the EPA “does not address that these disparate pieces must function as a whole if the standards are to be achievable”, and therefore “falls short of its statutory obligations” for the best system of emissions reduction to be adequately demonstrated in the present.
Electricity companies are already working to demonstrate hydrogen blending or CCS “and intend to use them when they satisfy customer cost and industry performance requirements”, the EEI adds.
However, in the short term, state utility commissions are unlikely to approve plans allocating capital “and impose risk and cost-recovery burdens on customers” for these nascent technologies, while accessing private finance for technologies that may not meet regulatory standards is “similarly uncertain”.
As such, the EEI expects a mandate to use hydrogen blends or CCS for new gas-fired capacity will result in one of two outcomes.
“First, electric companies either will invest in costly retrofits or conversions to attempt to achieve EPA’s proposed standards, deploying capital in a manner that requires long payback periods; or, second, the large and highly efficient units subject to the proposal will take a capacity factor restriction, effectively exempting themselves from EPA’s requirements (on EPA’s own terms) and limiting their usefulness in responding to larger grid reliability and resilience needs.”
In addition to using smaller, older and less efficient existing turbines that fall outside the EPA’s remit, power companies may choose to extend the life of coal-based units that would have otherwise been retired (although if operating beyond 2039, these will also need CCS installed by 2035), or build out additional renewables and storage.
This could ultimately result in the grid seeing an increase in emissions and/or a decrease in dispatchable power generation, the association suggests.
The EEI notes that if the EPA’s projections of hydrogen or CCS as the best system of emissions reduction are wrong, any legal challenge to the proposed regulation brought when this becomes apparent — ie, in 2030, 2032, 2035 or 2038 when compliance with the rules must be reported — will be “years too late”.
The Clean Air Act, a federal law administered by the EPA, only allows challenges to regulations to be brought within 60 days of finalisation, which could mean the US ends up locked into an ineffective decarbonisation pathway.
