Proposed emission mandates from the U.S. Environmental Protection Agency (EPA) would reduce carbon dioxide emissions in Michigan by 32 percent, which could mean significant changes for DTE Energy (NYSE: DTE), according to Skiles Boyd, vice president of environmental management and resources for DTE Energy.
“This is a major transition for the energy sector across the country,” Boyd said. “And this will take a good deal of time and effort to adapt to. Coal generates about twice as much CO2 emission as a natural gas fire unit; it takes a fair amount of time — generally, people say five to six years — to permit and build a new natural gas facility.”
DTE would have to reduce emissions by nearly 40 percent since many of the company’s power plants utilize coal-fired generation, according to The Times Herald.
“A number of our plants are getting older and would have to be transitioned anyway,” he said. “This will probably set the timeline for that. If the rules stay as they’ve been proposed, most of our coal generation, other than the Monroe power plant and maybe Belle River, will be gone in that timeline.”
The EPA regulations are expected to be finalized by June 2015, Boyd added. When finalized, the state will work with energy providers on a plan to meet the mandate.; the state will submit its plan by June 2016 or 2017. The EPA then has a year to approve the plan.
“The way they’re proposed right now, about 70 percent of the reduction you have to have completed by the early 2020s,” Boyd said. “If this sudden cliff in 2020 is still in the regulation, that action will be quick and probably much more disruptive.”
Boyd said the mandate may also force DTE to explore more wind and nuclear generation opportunities.