Phto by AP Wideworld
The days may be numbered for coal-fired powerplants, such as the Falkirk plant in Underwood, N.D. Low-cost natural gas and tighter emissions regulations mean future plants will be fired by other fuels.

Tightening federal environmental rules and low natural-gas prices are combining to spur the biggest boom in gas-fired powerplant construction in a decade. Scores of utilities and independent power companies across the U.S. are either building or planning new gas-fired units, most of them combined-cycle facilities that capture waste heat from combustion turbines and use it to generate additional power.

But while the volume of power-generation-related work available to engineering and construction firms is considerable, questions remain as to whether the boom will expand further due to planned regulation of greenhouse-gas emissions from existing coal-fired units or somewhat deflate because of still-weak growth in electricity demand.

Powerplant owners, engineers and contractors agree that a variety of forces are affecting the number of coal units being retired and new gas units being planned. They say the two most important factors, at least in the short term, are the Environmental Protection Agency's 2015-16 implementation of its Mercury and Air Toxics Standards (MATS) and low natural-gas prices, which are tied to the nation's shale revolution.

EPA's MATS rule, aimed at significantly reducing emissions of mercury and other toxic chemicals from coal units, has forced utilities and independent power companies to assess whether it makes economic sense to retrofit their older, smaller units with "scrubbers" and other emission-control equipment to bring them into MATS compliance.

In most cases, the owners have decided that retrofitting makes less sense than retiring the coal units, particularly given how low natural-gas prices have fallen and how low they are likely to remain for the foreseeable future.

Shutdown and Construction

As a result, tens of thousands of megawatts of coal-fired capacity in the U.S. either has been retired already or will be by April 2015, when MATS rules take effect. Many more coal units will be retired by April 2016, after a one-year extension the EPA is granting a number of owners.

"EPA regulations already have resulted in the shutdown of 315 [coal] units, totaling 48,500 MW," or about 15% of the total U.S. coal fleet, says Laura Sheehan, American Council for Clean Coal Electricity spokeswoman. Several thousand MW more will be retired over the next few years for the same reason, she says.

In response, utilities and independent power companies are building new gas-fired units. Dominion Virginia Power, for example, is building a 1,300-MW combined-cycle project in Warren County and another in Brunswick County, says utility spokesman Dan Genest.

The $1.1-billion Warren County project, which is being designed and built by a joint venture of Burns & McDonell and Zachry Industrial, is needed mostly "to meet the growing demand for electricity in northern Virginia," Genest says, noting the facility is "65% complete" and on track to begin operation in late 2014.