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Economic change and Biden’s hostility to fossil fuels are setting up an electricity crisis
Most Americans are unaware of a grave danger looming on the horizon: a historic — and entirely self-inflicted — energy-scarcity crisis. The “transition from fossil fuels” presupposes that “clean energy” substitutes will be ready when needed. But while the war on fossil fuels is making real gains, at least in the electricity sector, the effort to deploy renewable substitutes is failing catastrophically. Add soaring demand, and America is facing the worst energy shortfall in its history.
The nation’s grid regulators are already sounding the alarm. “I am extremely concerned about the pace of retirements we are seeing of generators which are needed for reliability on our system,” Willie Phillips, a Biden appointee who chairs the Federal Energy Regulatory Commission (FERC), testified last year. According to fellow FERC commissioner Mark Christie, a Trump appointee, “The red lights are flashing.”
States in the Midwest are likely to be among the hardest hit. In a February report, Midcontinent Independent System Operator (MISO), a high-voltage transmission system that provides power to 15 states in the central U.S., warned of “urgent and complex challenges to electric system reliability,” citing a “hyper-complex risk environment.” NERC, which oversees electricity supply across North America, expects MISO to face a staggering capacity shortfall of 4.7 gigawatts (GW) — equivalent to above five average-size nuclear-power plants — by 2028.
Realistically, the only way that America could make up the shortfall in electrical capacity would be through a massive increase in the number of coal and natural-gas power plants. Alas, those are primary targets of the Environmental Protection Agency’s new power-plant rule, published in May.
The rule is supposed to force large fossil-fuel power plants — chiefly, existing coal plants and new natural-gas plants — to completely eliminate their emissions of carbon dioxide by adopting carbon capture and storage (CCS). This technology is not yet available on a mass scale and entails sophisticated reengineering of plants.
The relevant provision of the Clean Air Act requires that any such emissions standards be “achievable” on the basis of technology that has been “adequately demonstrated.” But in fact, no large fossil-fuel plant in the world has used carbon capture to achieve anywhere near the 90 percent reductions in carbon emissions by 2032 that the rule mandates.
The hurdles to compliance don’t end there. A prominent Princeton study estimates that to achieve “net zero” carbon emissions in the power sector with carbon capture would require 68,000 miles of carbon-transport pipelines. Pipelines are outside the EPA’s jurisdiction and expertise. And using its leverage over power plants to force the rest of society to reorganize itself raises the same “major question” that led the Supreme Court to strike down Obama’s Clean Power Plan in West Virginia v. EPA. The EPA is also supposed to consider costs, but the agency is discounting them by the value of federal subsidies, as if costs disappear when you shift them from ratepayers to taxpayers.
The power-plant rule faces an uphill battle in federal court, but its effects are already visible. Most coal plants — from which Americans get 16 percent of their electricity — are expected to shut down by 2032. Even worse for the long run, the rule has already frozen investment in the large combined-cycle natural-gas plants that provide nearly 40 percent of America’s electricity. Large natural-gas projects with permits that were pending when the rule was originally proposed in May 2023 have been unable to obtain financing.
Making matters worse, federal subsidies for wind and solar are poisoning the economics for “baseload” generators. Those are the large coal, natural-gas, and nuclear plants on which America depends for sufficient and reliable electricity. Such plants are finding it increasingly difficult to recoup operating costs; at various times of the day, many utilities can get electricity free from solar and wind, which forces baseload generators to go offline. So even if the power-plant rule is overturned (or withdrawn by a future President Trump), the renewable subsidies will discourage construction of new coal, natural-gas, and nuclear plants.
Meanwhile, demand for electricity is forecast to soar in the decade ahead. The AI revolution is multiplying the electricity needs of cloud providers just as dozens of new Biden regulations are forcing Americans to switch to electric vehicles and appliances. By 2032, electricity demand will grow by at least 15 percent. According to regulators, Texas alone will need an additional 152 GW of electricity by 2030, adding more than 10 percent to the nation’s existing electricity demand.
Add skyrocketing demand to the expected retirements of coal plants and America is facing a shortfall of 400 GW, or at least 30 percent of electrical-grid capacity, by 2032. Building 400 average-size nuclear plants — four times as many as the U.S. has today — would barely make up the shortfall. And America has hardly been able to build any new nuclear plants since the 1970s because of onerous regulations.
Wind Power in the USA
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