New rules from the U.S. Department of Energy and Environmental Protection Agency will further acclerate the adoption of energy transition technologies — and lay the groundwork for even more onramps for zero-emission energy.
The rules cover both the authority to issue new permits for transmission lines that cross federal lands and emissions from power plants, respectively. Of the two, the rules from the DOE are more likely to withstand any legal challenges, given the bipartisan push for permitting reform in the U.S. The authority of the Environmental Protection Agency to regulate or mandate significant reductions in power plant emissions has already been challenged by the U.S. Supreme Court. And given the court’s current conservative majority, the dramatic cuts called for by the EPA are likely to be reviewed.
First, the Department of Energy announced its final permitting rule for transmission and distribution infrastructure. The new rule, part of a broader effort to modernize America’s electric grids, focuses on expediting the federal permitting process for transmission lines through the establishment of the Coordinated Interagency Transmission Authorizations and Permits (CITAP) Program. This program promises to enhance federal environmental reviews and streamline the permitting timeline to a standard two-year schedule. It reflects the Biden-Harris Administration’s strategy to cut down on bureaucratic delays and foster quicker deployment of crucial infrastructure, which is essential for accommodating increased renewable energy integration and improving grid resilience against extreme weather.
Later this year, the Federal Energy Regulatory Commission, which oversees electricity markets, is expected to finalize a major rule encouraging grid operators and utilities for long-term tranmission planning. According to a New York Times report, the rues may also help resolve disputes between states over who should pay for costly new transmission lines.
As part of the DOE announcement, the agency also threw a spotlight on a $331 million investment aimed at bolstering grid capacity across the Western U.S. This initiative will add over 2,000 megawatts of grid capacity—enough to power approximately 2.5 million homes—and is expected to create more than 300 union jobs in construction.
Potentially more significant, but more likely to be overturned in court, are the EPA’s rules around power plant emissions.
The new regulations, which span the Clean Air Act, Clean Water Act, and Resource Conservation and Recovery Act, target a substantial decrease in climate, air, water, and land pollution across the power sector. EPA Administrator Michael S. Regan emphasized the administration’s commitment to integrating these standards with the power sector’s planning processes, thereby providing power companies with adequate lead time to adapt and align their operations to these new standards without compromising the reliability of electricity delivery.
Key components of the announcement include:
- A groundbreaking rule for existing coal-fired and newly constructed natural gas-fired power plants, mandating the control of 90% of their carbon emissions.
- Enhanced Mercury and Air Toxics Standards (MATS), tightening emissions standards for toxic metals by 67% and mercury emissions from lignite-fired sources by 70%.
- A stringent rule aimed at reducing pollutants in wastewater from coal-fired power plants by over 660 million pounds annually, significantly benefiting communities, particularly those with environmental justice concerns.
- New regulations for the safe management of coal ash, expanding federal oversight to previously unregulated disposal areas to prevent potential contamination of groundwater.
These initiatives are part of EPA’s strategy to provide clear regulatory guidance and support to the power sector as it transitions to a cleaner energy economy. The comprehensive regulatory impact analysis accompanying these rules forecasts hundreds of billions of dollars in net benefits from the anticipated reductions in pollutants, highlighting the economic viability and health benefits of these stricter standards.
Taken together the permitting reform and emissions reduction requirements should drive more adoption for emission-free alternatives in power — and provide a boost for the development of infrastructure to manage new sources of electrons that will need to come online. Carbon capture, utilization, and storage technologies also stand to benefit from the increased scrutiny on power plant emissions.
The Department of Energy has approximately $20 billion to spend on infrastructure upgrades, as The New York Times notes.
And, through the Department of Energy’s Loan Program Office, roughly $400 billion is available for projects across renewable energy, energy infrastructure and zero-emission technologies (and their requisite supply chains).
Contact us to learn how Energy Transition Finance can help navigate the non-dilutive financing opportunities for companies engaged in the energy transition.