CALGARY, Alberta (Oct. 9, 2024) — Enverus Intelligence® Research (EIR), a subsidiary of Enverus, the most trusted energy-dedicated SaaS company that leverages generative AI across its solutions, has released a report that analyzes the potential impact of the Environmental Protection Agency (EPA) greenhouse gas standards and guidelines for fossil-fueled power plants in the U.S. In their current form, the regulations will undoubtedly impact new natural gas plants, operating coal plants and the generation mix for specific markets and states in a negative way.
“The new EPA regulations will mandate coal-fired power plants operating post-2039 to reduce emissions by 90% by 2032 or plan to retire early,” said Kevin Kang, analyst at EIR. “The policy has faced controversy, with some 27 states and several companies and organizations challenging the ruling as coal-fired power plants remain a substantial source of generation in states such as West Virginia and Wyoming. Unless something changes, this policy will have a drastic effect on the power markets.”
“To fill the void that coal will leave, there has been a lot of talk about renewable energy and CCUS as the solution; but with natural gas power plants, the economics are clear and will only benefit projects located near Class VI permit sites,” Kang said. “However, even in those cases, operating at a 40% capacity factor and being exposed to merchant pricing during volatile hours often proves more cost-effective, which we believe companies will prefer.”
Key takeaways from the report:
- New EPA regulations released in April 2024 mandate that coal-fired power plants operating post-2039 reduce emissions by 90% by 2032 or that they plan to retire early.
- Some 27 states and several companies and organizations are challenging the EPA regulation. Regardless of the outcome, EIR predicts all coal-fired generation in the U.S. to be shuttered by 2040.
- EIR’s base case shutdown schedule is on a pace that would see a decrease in reserve margin from about 27% in 2024 to just 12% in 2039. This would drive power, ancillary and capacity prices significantly higher.
- EIR expects the challenging economics of carbon capture from gas-fired power plants to incent most new gas plants in deregulated markets to operate under a 40% capacity factor.
EIR’s analysis pulls from a variety of Enverus products including Enverus Intelligence® Research and P&R FOUNDATIONS®.
EIR is inviting members of the media to attend a live webinar Oct. 16, 2024, at noon CDT, to learn more about gas-fired power generation. Learn more and register here.
You must be an Enverus Intelligence® subscriber to access this report.
About Enverus Intelligence® Research
Enverus Intelligence ® | Research, Inc. (EIR) is a subsidiary of Enverus that publishes energy-sector research focused on the oil, natural gas, power and renewable industries. EIR publishes reports including asset and company valuations, resource assessments, technical evaluations and macro-economic forecasts; and helps make intelligent connections for energy industry participants, service companies and capital providers worldwide. EIR is registered with the U.S. Securities and Exchange Commission as a foreign investment adviser. Enverus is the most trusted, energy-dedicated SaaS company, with a platform built to create value from generative AI, offering real-time access to analytics, insights and benchmark cost and revenue data sourced from our partnerships to 95% of U.S. energy producers, and more than 40,000 suppliers. Learn more at Enverus.com.
