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At the direction of President Barack Obama, the U.S. Environmental Protection Agency (EPA) has released its highly anticipated Clean Power Plan proposal to cut carbon pollution from existing power plants, which the agency describes as the single largest source of carbon pollution in the U.S. Many in the renewable energy industry say the plan could create a big opportunity for wind and solar power.

Power plants account for roughly one-third of all domestic greenhouse gas emissions in the U.S., the EPA says. While there are limits in place for the level of arsenic, mercury, sulfur dioxide, nitrogen oxides and particle pollution that power plants can emit, there are currently no national limits on carbon pollution levels.

The Clean Power Plan seeks to do the following by 2030:

- Cut carbon emissions from the power sector by 30% nationwide below 2005 levels;
- Cut particle pollution, nitrogen oxides and sulfur dioxide by more than 25% as a co-benefit;
- Shrink electricity bills roughly 8% by increasing energy efficiency and reducing demand in the electricity system.

The Clean Power Plan will be implemented through a state-federal partnership under which states identify a path forward using either current or new electricity production and pollution control policies to meet the goals of the proposed program. The proposal provides guidelines for states to develop plans to meet state-specific goals to reduce carbon pollution. States can choose the right mix of generation using diverse fuels, energy efficiency and demand-side management to meet the goals and their own needs, the EPA says. Provisions enable states to work together to develop regional plans.

The EPA proposal is a timeline for states to follow for submitting plans to the agency - with plans due in June 2016. There is an option to use a two-step process for submitting final plans if more time is needed. States that have already invested in energy efficiency programs will be able to build on these programs during the compliance period to help make progress toward meeting their goal, the EPA says.

"The EPA is delivering on a vital piece of President Obama's Climate Action Plan by proposing a Clean Power Plan that will cut harmful carbon pollution from our largest source - power plants," says EPA Administrator Gina McCarthy, in a statement. "By leveraging cleaner energy sources and cutting energy waste, this plan will clean the air we breathe while helping slow climate change so we can leave a safe and healthy future for our kids."

The EPA will accept comment on the proposal for 120 days after publication in the Federal Register and will hold four public hearings on the proposed Clean Power Plan during the week of July 28 in the following cities: Denver, Atlanta, Washington, D.C., and Pittsburgh. Based on this input, the EPA will finalize standards in June 2015 following the schedule laid out in the June 2013 presidential memorandum.

For wind industry reactions to the EPA proposal, click here.

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