Modernization Opportunities in New EPA Regulations

Long-anticipated, recently issued regulations from the U.S. Environmental Protection Agency (EPA) are exerting new pressure on the energy industry to improve the nation’s fleet of power plants. The EPA’s actions in regulating greenhouse gas emissions have received the most media attention, but it is a different group of regulations that, in the near term, may create an opportunity to modernize the electric system.

The EPA has issued draft air regulations that will primarily affect coal-fired power plants. The Clean Air Transport Rule addresses SO₂ and NO_x emissions, and other regulations address emissions of hazardous air pollutants (such as mercury).

Some worry that the regulations, and resulting operational changes, will be more than the industry can handle while keeping the lights on. However, the sector has a strong track record of taking the steps necessary to ensure reliable service for electricity customers.

The regulations are likely to prompt investments in a range of modern electric-power resources: among them, natural-gas-fired plants that generate power more efficiently, and hardware and software that will make the power grid “smarter” and more resilient. Any initiatives to retrofit existing plants or add new ones will involve considerable engineering and construction talent and equipment – creating jobs, but not stimulus expenditures for the Treasury. ■

Susan F. Tierney, Ph.D., a Senior Advisor in our Boston office, is former Assistant Secretary for Policy at the U.S. Department of Energy.

Paul Hibbard, Ph.D., a Vice President in our Boston office, specializes in energy and environmental technologies, economics, market structures, and policy.