The climate-change action plan laid out by President Obama on June 25 provided a broad outline of how the administration plans to address greenhouse-gas emissions for the remainder of his term. While the plan lacked many specifics, Obama and administration officials already have started filling in the details.
As a first step, the president on the same day signed a memorandum directing the Environmental Protection Agency to quickly move forward with developing revised carbon dioxide (CO2) standards for new powerplants and to develop guidance, standards or regulations for existing plants. On July 2, Energy Secretary Ernest Moniz released the Energy Dept.'s draft solicitation for innovative and advanced fossil-energy projects and facilities that substantially reduce greenhouse-gas and other air pollution. The solicitation will be offered through the department's loan-guarantee program and will provide up to $8 billion in loan-guarantee authority. "This reflects the president's all-of-the-above approach," Moniz told reporters.
All told, the president's plan promises to provide work for the nation's engineering and construction industry, much as the Clean Air Act has done since it was enacted more than 40 years ago.
The most contentious element of the plan—and potentially the most lucrative for designers and builders—is the president's call for the EPA to start regulating greenhouse-gas emissions from existing powerplants. Many utilities with large coal-fired fleets do not believe EPA-directed regulation of CO2 emissions is the way to go.
"Congress is best equipped to develop a national energy policy that meets the needs of all sectors of our nation, striking an appropriate balance to protect the environment and ensure energy security," says Tim Leljedal, spokesman for Southern Co., which owns four regulated utilities in the Southeast. Leljedal says Southern "will review the greenhouse-gas proposals [made by Obama] and provide input through the regulatory process in the best interest of our customers."
Investor-owned utilities (IOUs) will want to ensure, at the very least, that any new policies or regulations to curb CO2 emissions from existing powerplants "contain achievable compliance limits and deadlines, minimize costs to customers and are consistent with the industry's ongoing investments to transition to a cleaner generating fleet and enhanced electric grid," says Tom Kuhn, president of Edison Electric Institute, which represents IOUs. Kuhn adds, "It is also critical that fuel diversity and support for clean-energy technologies be maintained, not hindered."
The engineering and construction firms that built entire divisions of their companies around the requirements of federal environmental laws also are reluctant at this early stage to discuss what EPA regulation of CO2 emissions from existing powerplants may mean for them and for utilities. Privately, however, a few of them agree that a critical question is, what will the regulations actually require plant owners to do?
While there is proven technology to slash emissions of sulfur dioxide, nitrogen dioxide and most other pollutants from the flue gases of fossil-fired plants, there is no comparable technology for CO2 removal that has been employed on a commercial-scale fossil unit. Backed by federal grant money, some coal-plant owners have been working to test what is possible regarding CO2 capture.
For example, NRG Energy and its engineering partner, Chicago-based Sargent & Lundy, are developing a project to install equipment at NRG's W.A. Parish station near Richmond, Texas, that will demonstrate the ability of an amine solvent-based process to strip about 90% of the CO2 from a 250-MW-equivalent portion of flue gases emitted by an existing coal unit, says NRG spokesman David Knox. The captured CO2 then will be compressed and piped 80 miles for use in enhanced oil recovery. The $845-million Parish project, slated for start-up in 2015, is being partially financed by a U.S. Dept. of Energy Clean Coal Power Initiative grant of up to $167 million. Similarly, Southern has been testing a technology developed by Mitsubishi Heavy Industries to remove most of the CO2 from a portion of the flue gases from a coal unit in Alabama.
The current economics of generation from natural gas versus coal suggest the planned EPA regulations on CO2 emission "will lead to a new wave of [coal-unit] retirements" once the new CO2 rules are implemented, says Tom Alley, vice president for generation at the Electric Power Research Institute. Alley says that while some existing technologies are capable of removing substantial amounts of CO2 from flue gases, they are expensive, and running the CO2-stripping equipment is very energy intensive. Good scientific work is under way involving membranes, advanced solvents and other ways to remove CO2 more cost-effectively, but those advances are "several years away" from commercial-scale deployment.
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