Existing regulations are expected to drive the shut-down of as much as 20% of America's coal-based fleet, which is the primary source of base-load power generation in the US, Arch senior vice president of strategy and public policy Deck S. Slone said.
“That's an unprecedented change to America's power system in what constitutes the blink of an eye in energy markets – creating enormous potential for market disruptions, supply shortages and rate spikes,” he said.
“Now, before this current round of closures has even run its course, EPA is preparing to step on the regulatory accelerator once again with the proposed Clean Power Plan.
“Such a move threatens to ratchet up the risk still further. The grid is already showing signs of strain, as we saw last winter when large sections of the US were pushed to the brink by bitterly cold weather and surging power demand.”
In addition to increasing the likelihood of "rolling blackouts or cascading outages," in the words of one regional transmission organisation, the Clean Power Plan is expected to drive double-digit increases in electricity rates in most states, according to Slone.
Given the long lead times and high capital costs required when adding capacity, the damage associated with another wave of power plant closures could take years to address and reverse, he concluded.
