In the case Massachusetts v. EPA in 2007, the U.S. Supreme Court ruled that the Environmental Protection Agency can regulate greenhouse gases because they qualify as air pollutants. And ever since, electric power plants using “thermal” fuels have faced escalating regulatory pressure.

How this has played out for coal fired power plants in the Western United States is summarized in a Los Angeles Times column from 2024 that claims “twenty-one down, 32 to go.” The columnist goes on to state efforts to shut down coal fired power plants “could be boosted when the Biden administration is expected to finalize several rules limiting pollution from coal- and gas-fired power plants.”

With the Trump administration, the momentum to retire electric power plants that rely on coal and natural gas has slowed but not stopped. A February 2025 analysis by the US Energy Information Administration estimated planned nationwide retirements of coal and natural gas-fired electric-generating capacity was going to increase in 2025.

In California, 23 percent of the electricity consumed in 2023 was imported from out of state generators, undoubtedly including from coal and natural gas-fired power plants. But in-state, a symbiosis has developed between the operators of natural gas power plants and the renewables industry. During summer nights, natural gas power plants are activated to send up to 12 gigawatts into the grid, then power down to around 5 gigawatts during the middle of the day when photovoltaic power is peaking.

For natural gas power plant operators, their survival rests on a fragile assumption: battery and other storage assets will not expand enough to keep pace with demand for electricity, i.e., the intermittency of renewable electricity generation will require quick-start natural gas power into the foreseeable future. Meanwhile, they’ll just cash cow their facilities, shutting them down for good if and when a combination of decentralized EV vehicle-to-grid plus utility scale battery farms can capture and sell back to the grid all that surplus renewable power generated from PVs during daylight.

During the Biden administration, natural gas powered electricity generators got another lifeline. Massive subsidies to sequester their flue gas underground. Voila. No more greenhouse gas emissions. Across the country, billions were invested and additional billions were budgeted in anticipation of federal dollars to pay for pipelines and pumping. For skeptics, it was a prodigious waste, but for the operators, it was a pragmatic business decision. And now these subsidies are in jeopardy, if not already gone.

There is another question, however, that bears examination. Would the economic cost of flue gas sequestration be less than the cost of massive expansion of renewables output and electricity storage facilities?

To answer this, an important variable to first recognize is the gap between the capacity of California’s total fleet of natural gas power plants and its actual output. For example, in 2023, California’s natural gas power plants had a total output capacity of 39.6 gigawatts, but with only 94,000 gigawatt-hours of actual power generation, they only operated at 27 percent of their full capacity. These power plants spent nearly three quarters of their time idle.

If, on the other hand, California’s natural gas power plants operated as the baseload power plants they were designed to operate as, with a 90 percent up-time, they would have been able to generate 312,000 gigawatt-hours per year. In 2023, that would have meant Californians could have generated a total of 434,000 gigawatt-hours, which would be more than double in-state production and exceed in-state consumption by 55 percent. It would be a big step toward California’s stated goal to electrify its economy.

The cost to sequester California’s natural gas power plant emissions is mitigated by the fact that the power plants themselves are already built and operating. Therefore, the cost is limited to the modifications needed to capture the flue gas, extract the CO2, and pump it into underground formations.

According to a 2023 DOE analysis that analyzes the energy required as well as the construction retrofit cost to extract CO2 from flue gas, the energy required will consume about 13 percent of a power plant’s total electrical output, and cost an estimated $1.3 million per net megawatt of capacity. What does this portend for California’s fleet of natural gas power plants?

It’s important here to emphasize that basing retrofit costs on general estimates, even though they are credible and recent, is a tricky business. Each plant will have distinct features that may add or subtract costs. But to rely on the DOE figures, it would cost about $50 billion to retrofit every one of California’s natural gas-powered generating plants to extract CO2 from their emissions and pump it underground.

While $50 billion is a lot of money, it can be amortized over the lifetime of a 30 year bond. Even accounting for a 13 percent power drain to pump the CO2 underground, the $50 billion capital cost would be spread over an output of 272 billion kilowatt-hours per year, which means the consumer would spend an additional 1.2 cents per kilowatt-hour to have “carbon neutral” natural gas-generated electricity.

The fact, moreover, that these natural gas power plants would be spreading all of their other fixed costs over a 90 percent utilization instead of a 27 percent utilization would more than make up for the cost of sequestration. Investing in CO2 sequestration in exchange for turning California’s fleet of natural gas power plants back up to baseload mode would lower the cost of electricity to the consumer, without one penny of subsidies.

None of this is to suggest that renewables – decentralized, privately financed PV generation and EV storage in particular – cannot eventually compete with natural gas power without subsidies. But let that happen, instead of shutting down natural gas power plants merely to cater to special interests that favor renewables.

 

Edward Ring is the Director of Water and Energy Policy at the California Policy Center, which he co-founded in 2013. Ring is the author of Fixing California: Abundance, Pragmatism, Optimism (2021) and The Abundance Choice: Our Fight for More Water in California (2022).