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Renewable Energy Vision
Expert analysis on the most pressing issues facing the renewable energy sector in the U.S and abroad from ACORE staff, members and supporters.

What Do New EPA Power Plant Rules Mean For Clean Tech?

Published on 16 Jun 2014  |   Written by    |  

Last week, the U.S. Environmental Protection Agency (EPA) dominated the news with the release of its draft Clean Power Proposal, which mandates carbon reductions from power plants. While there is a federal emissions limit for any new power plant built in the United States, this is the first federal action to regulate emissions of existing plants. The EPA’s proposal mandates an emissions reduction from the power sector by 30 percent below 2005 levels.

Perhaps the most interesting part of EPA’s proposal – which is out for public comment now – is the fact that the agency has promulgated state-specific emissions reduction goals. The plan also affords states flexibility in how they meet the targets. Each state must come up with its own emissions reductions “roadmap” to submit to EPA by June 2016. There are, however, four building blocks that EPA has put forward as the foundation for these plans:

1) Make fossil fuel power plants more efficient
2) Use low-emitting power sources more
3) Use more zero- and low-emitting power sources (renewables and natural gas)
4) Use electricity more efficiently

In other words, a state with a significant coal fleet may develop a plan that centers around making its fleet more efficient through new equipment and technologies, combined with an increase in natural gas powered generation. Other states may look to establish or enhance renewable portfolio standards to increase reliance on renewable energy like wind, solar or geothermal.

In addition to creating opportunities for natural gas suppliers, renewable energy and related technologies; perhaps the greatest market opportunity is for companies specializing in energy efficiency products and services, given its relatively low cost to consumers and widespread availability. Energy efficiency also has the added benefit of a direct consumer impact, as saving energy can translate to lower electric bills, thus increasing disposable income.

California also has a lot to gain from these new rules. EPA Administrator Gina McCarthy has referenced California’s cap and trade system to which other states could potentially link to help cut emissions. These new rules could also be another boon for the fledgling battery storage industry, which got a major jumpstart with California’s recent mandate requiring investor owned utilities to purchase 1.3 gigawatts of energy storage by 2020. The many renewable energy and clean tech companies that call Silicon Valley home are clearly well positioned to sell into other markets across the country.

These draft rules are just the beginning. Now, we are off to the races, as EPA collects input and works to finalize the proposal. Of course, conversations are already ramping up with state regulators and policymakers about what types of energy sources, technologies, products and services should be included in state plans. How these conversations conclude is yet to be seen.

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