Hear Susan Cowell and Richard Waddington of Chadbourne & Parke discuss President Obama's Clean Power Plan.

Wind and solar appear to be winners under the final Clean Power Plan that the US Environmental Protection Agency released in early August to reduce US carbon dioxide emissions from fossil fuel power plants.

The plan would require a 32% reduction in carbon dioxide emissions from power plants by 2030 compared to 2005 levels.

Each state has been assigned a percentage reduction in emissions, and it is up to each to decide among several options for how best to reach its emissions goal. The options include increasing the efficiency of existing coal-fired plants and shifting away from coal-fired power by investing in natural gas, renewable energy and energy efficiency.

EPA had issued a draft Clean Power Plan in June 2014. That plan was challenged in court by Murray Energy Corporation and the attorneys general in 12 coal-reliant states who question whether the agency has been given legal authority by Congress to regulate CO2 emissions under section 111(d) of the Clean Air Act. A US appeals court dismissed the suits in June as premature. Lengthy litigation is expected, and the fate of the plan will probably have to be decided ultimately by the US Supreme Court.

In the meantime, the states have until September 2016 to draw up their individual emissions reduction plans. EPA has discretion to extend the deadline by two years, until September 2018, if an adequate initial submission is submitted by September 2016. The deadline for commencing implementation of the individual plans is not until 2022. These deadlines will be enforced unless any new Republican administration that takes office in 2017 withdraws the requirements, Congress cuts off funding or a court issues an injunction blocking implementation. Congress is probably not in a position to block funding as long as the Democrats retain the White House. Sixteen states have applied to EPA to stay implementation of the final plan. EPA is expected to deny the petition, after which lawsuits are certain to be filed by the states and coal mining interests.

The final Clean Power Plan sets a goal of 28% electricity generation from renewable energy by 2030. Wind and solar are expected to contribute a substantial percentage of the increase in renewable energy. This is in part due to incentives created by the final plan. Incentives are not provided for other renewable sources of energy such as geothermal and biomass, but demand for such sources will probably increase given the overall increase in demand for renewables.

The draft plan had only a 22% target for renewable energy.  Hear Susan Cowell and Richard Waddington discuss President Obama's Clean Power Plan.

The new higher target is a response to the concern voiced by some stakeholders that the draft plan could shift investment away from wind and solar in a “rush to natural gas.” The draft plan assumed that natural gas would account for a larger share of the energy mix in the first few years than is assumed in the final plan. The final plan assumes that gas capacity will not increase as significantly as projected earlier.

The government is now estimating that coal-fired generation will decline from approximately 39% of the US energy mix to approximately 27% by 2030. Total US generating capacity was 1.06 million megawatts at the end of 2013, the most recent year for which such data is available. The projected reduction is roughly 127,000 megawatts of generating capacity. Some consultants estimate that 100,000 MW of that capacity will be retired over the period 2017 through 2020.

John Marciano