Regulations finalized by the Environmental Protection Agency in 2024 could cut emissions from fossil fuel power generators but leave additional cost-effective emissions reductions on the table, according to new Princeton research.
The analysis, published March 12 in One Earth, evaluates the impacts of the EPA power plant regulations on the U.S. electricity system at a time of uncertainty for the rules, which the researchers expect to be rolled back under the current Trump administration. The power plant regulations set carbon dioxide limits for new gas-fired combustion turbines and provide guidelines for existing coal, oil, and gas-fired steam generating units.
The Princeton study demonstrates that the regulations could roughly double emissions reductions from the power sector in 2040, falling 51% from 2022 levels if the rules are maintained, compared to only 26% without the rules.
The vast majority of emissions reductions would come from the accelerated retirement of coal-fired power plants, which would likely choose to retire before 2039 under the regulations rather than install costly equipment to capture and store carbon dioxide emissions.
The researchers also warned that the rules could lead to a less efficient energy system by inadvertently extending the life of existing natural gas plants.
“The current EPA rules apply emissions limits to new gas power plants, but the agency punted on finalizing rules for existing gas generators,” said research leader Jesse Jenkins, an assistant professor of mechanical and aerospace engineering and the Andlinger Center for Energy and the Environment. “This sets up an uneven playing field that encourages greater use of less efficient existing gas plants, which undermines some of the emissions reductions achieved by the rules.”
The research team assessed several options for additional regulations aimed at existing gas plants. They found that applying the same emissions limits to all gas generators, regardless of age, could cut emissions up to 88% below 2022 levels at an even lower average cost than the existing regulations.
The modeling results were also part of a recent study published in Science, which compared analyses from nine different power systems models to quantify the emissions impacts of the EPA regulations.
“Our work moves beyond simply quantifying the uncertainty of these emissions impacts to actually identify which aspects of the regulations are most effective in driving down emissions and where there is room for improvement,” said first author Qian Luo, a postdoctoral researcher at the Andlinger Center for Energy and the Environment.
Coal retirements drive the bulk of emissions reductions
In their analysis, Luo and Jenkins found that the rules’ guidelines regarding coal were the most significant in driving emissions reductions, accounting for nearly 70% of the regulations’ overall cuts.
The guidelines for coal depend on a plant’s scheduled retirement date. If a plant is scheduled to retire after 2039, then beginning in 2032, it must be equipped with a technology that can capture at least 90% of its carbon dioxide emissions. If a plant will retire before 2039, then beginning in 2030, it must demonstrate emissions reductions achievable by co-firing coal with at least 40% natural gas.
In their model, the team found the coal regulations led to large emissions reductions because they spurred the early retirement of coal plants that might otherwise operate well past 2039. In fact, in their model, out of the 28.3 gigawatts of operational coal capacity in 2035, only 0.3 gigawatts were projected to be equipped with carbon capture technology. The remaining 28 gigawatts would instead choose to co-fire with natural gas before retiring by 2039.
“Coal-fired power plants have been steadily retiring for the past decade, but without emissions limits, over a hundred gigawatts of coal-fired capacity could still be running into the 2040s,” Jenkins said. “Eliminating emissions from these highly polluting power plants is a high priority and one of the most cost-effective ways to reduce U.S. greenhouse gas emissions.”
Natural gas rules have unintended consequences
While the regulations for coal plants are largely successful at driving cost-efficient emissions reductions, the researchers warned that the rules for natural gas, in their current form, achieve emissions reductions at higher costs and could even lead to a less efficient energy system.
According to the regulations, if a new natural gas plant serves as a baseload energy source — operating over 40% of the time — then beginning in 2032 it must capture at least 90% of its carbon emissions. Plants that operate less than 40% of the time must meet certain performance standards (below 1,150 pounds of carbon dioxide per megawatt hour) or avoid high-emitting fuels such as diesel, depending on their usage.
However, the finalized regulations only target new natural gas plants — not existing plants. As a result, the researchers found the gas rules achieve modest additional emissions reductions at the expense of overall system efficiency.
“The issue is that it is expensive to invest in carbon capture technology, while it is very easy to lower the capacity factor of a plant below 40%,” said Luo. “And without similar regulations for existing plants, the most cost-effective solution becomes operating newer, more efficient natural gas at lower capacities while ramping up generation from existing, less efficient plants.”
This projected push toward new natural gas plants that operate less than 40% of the time could result in significant overbuilding of natural gas plants, the study found. More natural gas capacity would be added to the energy system, but this new capacity would be used less frequently, raising the cost of electricity from new natural gas plants and increasing the system’s reliance on existing and less efficient generators.
Highlighting opportunities for greater emissions cuts
After identifying potential shortcomings of the current EPA power plant regulations, Luo and Jenkins provided suggested modifications that could improve the rules for natural gas plants.
A near-term priority, they said, would be to set equal standards for new and existing natural gas plants. By simply extending the current rules for new natural gas plants to existing ones, an updated set of regulations could lower emissions by 62% below 2022 levels as more new gas plants are installed with carbon capture technology and incentives to run older gas plants more intensively are eliminated.
“The most important step for cutting emissions is to retire older and less efficient plants, both coal and natural gas,” Luo said. “Not only do newer natural gas plants generate fewer emissions, but they also have capabilities, such as the ability to co-fire with greater amounts of hydrogen, that could pave the way for future emissions reductions.”
To cut emissions even further, the researchers explored extending carbon capture requirements for both new and existing natural gas plants to any generator operating greater than 20% of the time (compared to 40% in the finalized EPA regulations). The proposed change would see even more natural gas plants being installed with carbon capture, cutting emissions by 81% over 2022 levels.
The researchers went one step further, showing that emissions reductions up to 88% over 2022 levels were possible if there was an additional requirement for natural gas generators operating below 20% of the time to co-fire with at least 30% hydrogen.
According to the analysis, these proposed rules would both achieve lower total emissions and would be more efficient, in terms of dollars per ton of carbon dioxide abated, than the 2024 EPA regulations. However, Jenkins pointed out that while the additional rules may be most cost-effective from a regulatory perspective, they would entail significantly greater investments from power plant developers that could make the rules even more contentious than they are at present.
“The current administration has plans to roll back these EPA power plant regulations and replace them with weaker standards, which makes this independent analysis extremely timely,” Jenkins said. “This work helps identify the likely effects of current regulations, highlights the impact of potential repeal on U.S. emissions, and quantifies the overall efficiency of emissions reductions achieved by the current rules.”
Luo added that the analysis also “points the way for future administrations to improve the efficacy of these regulations to achieve deeper and more cost-effective emissions reductions from the U.S. power sector.”
The paper, “US EPA’s power plant rules reduce CO2 emissions but can achieve more cost-efficient and deeper reduction by regulating existing gas-fired plants,” was published March 12 in One Earth. The work was supported by the Princeton Zero-carbon Technology Consortium, which is funded by unrestricted gifts from Google and Breakthrough Energy.
The paper, “Impacts of EPA’s finalized power plant greenhouse gas standards,” was published January 9, 2025 in Science. The lead author is John Bistline of EPRI. In addition to Luo and Jenkins, co-authors include Aaron Bergman, Dallas Burtraw, Maya Domeshek, Kevin Rennert, Molly Robertson, Nicholas Roy, Ethan Russell, and Daniel Shawhan of RFF; Geoffrey Blanford and Aranya Venkatesh of EPRI; Maxwell Brown of Colorado School of Mines; Allen Fawcett and Gokul Iyer of University of Maryland, College Park; Anne Hamilton and Daniel Steinberg of National Renewable Energy Laboratory; Ben King, Hannah Kolus, and Anna van Brummen of Rhodium Group; Amanda Levin of National Resources Defense Council; Grace Van Horn of the Center for Applied Environmental Law and Policy; John Weyant of Stanford University; Ryan Wider of Lawrence Berkeley National Laboratory, and Alicia Zhao of the Center for Global Sustainability.
