OREANDA-NEWS. The Southwest Power Pool says that compliance costs for meeting planned federal carbon restrictions in the 12 states it covers could reach \$2.9bn/yr by 2030.

The coal-reliant grid in an updated analysis of the Environmental Protection Agency's (EPA) Clean Power Plan released yesterday also found that the rule would put up to 13.9GW of generation at risk of retiring. That is about 50pc more generating capacity than EPA projected would retire.

The southwest pool, which will stretch from the Gulf of Mexico to the upper Great Plains by year-end, relied on coal for 58pc of its generation last winter. The analysis found that using a carbon-cost adder of \$45/ton would be the most cost-effective way to hit EPA's target for power plants in the region to emit an average of 1,309 lbs CO2/MWh by 2030.

Compliance could reach \$2.9bn/yr because of increased energy production costs and capital investment to add 5.6GW of wind and 1.2GW of gas-fired generating capacity, the southwest grid said. No transmission expansion costs were included in the analysis.

Despite the higher energy and generation costs, the southwest grid found that regional compliance with the rule by 2030 was possible and likely cheaper than state-by-state compliance. The grid operator also reiterated findings that it would need more time to comply with the EPA proposal.

"It takes time to develop a stable, secure, efficient and effective bulk electric power system necessary to support changes of the magnitude being proposed," the grid's vice president of engineering Lanny Nickell said.

The southwest pool and the adjacent Midcontinent Independent System Operator are the US power regions most reliant on coal for electricity production. The midcontinent grid in a separate analysis has projected 14GW of generating capacity could be at risk of retirement becaues of the rule, with estimated annual compliance costs of \$5bn-\$8bn.