The wind and solar industries cheered while coal companies vowed to kill President Barack Obama’s new limits on climate-change pollution as details of the historic regulations emerged.
The rules, to be unveiled at the White House Monday, include tougher limits on planet-warming carbon emissions and more incentives for renewables than originally expected. That may also mean fewer benefits for natural gas or nuclear power than anticipated. The outlook for coal remained bleak as ever.
“The renewable energy sector should be a clear winner while merchant coal-fired generators could end up the big losers,” Paul Patterson, a New York-based utility analyst for Glenrock Associates LLC, said in an e-mail. “Given the rules’ complexity and controversy, those who could likely stand to benefit the most in the end might be the lawyers.”
Dubbed the Clean Power Plan, the package is Obama’s most ambitious effort to tackle industrial pollution that scientists blame for dangerous increases in global temperatures. The Environmental Protection Agency regulations demand deep reductions in carbon emissions by curbing reliance on coal and natural gas. The rules are designed, in part, to put the U.S. on track to meet goals the government has set out in negotiations for a global accord on climate change.
Shares of wind energy companies in Europe rose, including turbine makers Vestas Wind Systems A/S, Gamesa Corp. Tecnologica SA and Nordex SE.
U.S. power producers that have pushed hard in clean energy gained, including NextEra Energy Inc., the biggest North American producer of wind and solar energy.
“There is no question that today’s announcement is positive for renewables and it will be positive in the long term for the renewable business at NextEra,” Chief Executive Officer Jim Robo said Monday during an earnings conference call.
The final Clean Power Plan “will be the most comprehensive, far-reaching regulation ever promulgated by the federal government to impact the electric power sector,” Tom Kuhn, president of the Edison Electric Institute, a Washington-based utility group, said by e-mail Sunday. EEI says utilities plan to shut or retrofit about 73 gigawatts of coal plant capacity by 2022, enough to power 36 million households.
Brian Deese, an adviser to Obama on energy and climate issues, told reporters on a conference call that the health and economic benefits of lowering carbon pollution under the plan will be four to seven times greater than the estimated $8.4 billion cost of the regulations.
“It’s a simple idea that will change the world: cut carbon pollution today so our kids won’t inherit climate chaos tomorrow,” said Rhea Suh, president of the Natural Resources Defense Council said Monday by e-mail.
The regulations, if they survive legal challenges, are expected to transform the U.S. power market, spurring the retirement of dozens of coal-fired plants and encouraging their replacement with natural gas, renewables and other forms of low-or no-carbon electricity. The final version is expected to give states two extra years to comply, with the measure taking effect in 2022.
“In today’s marketplace their best compliance option is clearly solar,” Rick Umoff, counsel for the Washington-based Solar Energy Industries Association, said in an e-mailed statement. A more flexible timeline under the plan “will only further encourage states to act early so they can take advantage of the booming solar economy and any compliance incentives that the EPA might offer.”
The view was far different among coal companies, which are already slumping amid challenges from cheap natural gas and tougher pollution standards. Peabody Energy Corp., the biggest U.S. coal producer, last week suspended its dividend and cut its sales forecast. Miner Alpha Natural Resources Inc. filed for bankruptcy protection Monday, as expected.
Whatever the details of Obama’s final plan, “it’s illegal and we will not stop opposing it until it is withdrawn completely,” Laura Sheehan, a senior vice president at the American Coalition for Clean Coal Electricity, said in a statement. “The president’s relentless climate crusade cannot be put ahead of the priorities of hard-working Americans who will pay the ultimate price of staggering electricity bills and lost jobs.”
The National Mining Association, a Washington-based group that represents more than 325 companies involved in the coal business, said in statement that it’ll file a stay with the EPA, describing the rule as “the agency’s attempt to commandeer the nation’s electric grid.”
Miner Arch Coal Inc. urged the Obama administration in a statement Sunday to focus its efforts on low-carbon, fossil-fuel technologies instead of “premature and costly regulations.”
The impact on utilities will vary depending on each company’s mix of coal, nuclear and other fuels. The industry has pushed for a longer timeline to comply, arguing a quicker transition would threaten the reliability of the electric grid.
“We are hopeful that the EPA has taken into consideration the feedback they have received from utilities and other stakeholders,” said Paige Sheehan, a spokeswoman for Charlotte, North Carolina-based Duke Energy Corp., the nation’s largest utility owner by market value. “It’s a very dense regulation. We’ll take some time to review it.”
The Tennessee Valley Authority, the government-owned utility serving 9 million people in the Southeast, is prepared for the new rules, said Scott Brooks, a spokesman for the Knoxville, Tennessee-based agency.
“We’re already reducing carbon emissions,” Brooks said in a telephone interview. “We’re in the process of reducing coal units, increasing gas plants. We are bringing on a new nuclear unit sometime near the end of the year. We think we’re in a good position to meet whatever the rule looks like.”
With the apparent tilt away from natural gas and toward renewables, initial reports on the plan are “discouraging,” said Dan Whitten, a spokesman for America’s Natural Gas Alliance, a trade group.
“The White House appears to be making a shift that ignores the market reality that natural gas is ready today to cost-effectively meet our environmental and energy challenges,” he said. He cautioned that the group still hadn’t seen the final regulations.