Extended Stay | EPA Clears the Runway

The Environmental Protection Agency has repealed most of the Biden administration’s 2024 greenhouse gas emissions requirements for coal- and gas-fired power plants and proposed eliminating remaining standards. The revoked provisions would have required certain existing coal plants and new baseload gas plants to capture 90% of their carbon pollution or retire. EPA officials presented the rollback as a trade-off that would reduce compliance costs and support grid reliability as power demand accelerates.

The timing is notable. Over the past two years, capital costs for new combined-cycle gas turbines have roughly doubled or tripled. This has made new projects difficult to finance without long-term power price agreements or unusually high capacity revenues. As a result, utilities have opted for the cheaper alternative of meeting load growth by extending the lives of existing plants. Enverus Intelligence® Research (EIR) data shows coal- and gas-fired plants have increasingly delayed retirements, particularly in regions experiencing high load growth where grid operators cannot afford to take capacity offline.

The 2024 rule was one of the few forces working against that trend. Its partial repeal gives utilities greater latitude to preserve existing capacity, reinforcing what economics and reliability needs were already pushing them to do.

Research Highlights:

• Wired for Growth – The Congestion Premium – This report examines where power prices are diverging most from local gas prices across ERCOT and PJM. It identifies the markets, generation assets and power producers best positioned to benefit from elevated spark spreads driven by low-cost gas, load growth and transmission congestion. The analysis also assesses how plant utilization and hedge exposure could shape the opportunity.
• BP’s Archaea RNG Portfolio – Pricing the Exit – We model the current value of BP’s Archaea renewable natural gas and landfill-gas-to-power portfolio, compare it with the 2022 acquisition price and estimate potential sale proceeds using recent transaction comparables.
• Power Delivery Risk – Time From Approval to In-Service – EIR benchmarks transmission-upgrade delays using 5,901 completed records across ERCOT, MISO, PJM and SPP, paired with constraints at 47,488 interconnection points. ERCOT’s median authorization-to-energization period is longest at 32.7 months versus 23.5 in MISO, with every voltage class slower. Load size drives upgrade dependency, while operator choice matters as much as market choice, with median build times ranging from 12 to 43 months.

Top Three Takeaways:

1: What did the EPA’s power plant rule rollback change?

The EPA repealed most of the Biden administration’s 2024 greenhouse gas emissions requirements for coal- and gas-fired power plants and proposed eliminating the remaining standards. The revoked provisions would have required certain existing coal plants and new baseload gas plants to capture 90% of their carbon pollution or retire. EPA officials framed the move as reducing compliance costs and supporting grid reliability as power demand accelerates.

2: Why are coal and gas plant retirements being extended?

Capital costs for new combined-cycle gas turbines have roughly doubled or tripled over the past two years, making new projects hard to finance without long-term power price agreements or unusually high capacity revenues. As a result, utilities are opting for the cheaper path of extending the lives of existing plants, especially in regions with high load growth where grid operators can’t afford to take capacity offline.

3: How does the EPA rollback affect utilities’ retirement decisions?

The 2024 rule had been one of the few forces pushing plants toward retirement. Its partial repeal gives utilities greater latitude to preserve existing coal and gas capacity, reinforcing a trend that economics and reliability needs were
already driving.