The Environmental Protection Agency has unveiled a proposal to reduce greenhouse gas emissions from new electric powerplants.

The proposed regulation, which EPA Administrator Gina McCarthy announced on Sept. 20, drew praise from environmental and public-health advocates. But electric utility companies and other industry groups say the proposal essentially would kill new coal-fired generation plants in the U.S.
If the proposal becomes final, it could force some engineering and construction firms that have relied on coal as part of their portfolio of work to shift their focus, says Block Andrews, strategic environmental solutions director at Burns & McDonnell, Kansas City, Mo. 

But already, utilities have largely shifted to building natural-gas fired powerplants as a result of the abundance of cheap natural gas.

Tom Kuhn, president of the Edison Electric Institute, warns that an over-reliance on natural gas will disrupt the reliability and affordability of the electric grid. “We cannot afford to take generation sources out of the mix, as fuel diversity guards against potential supply disruptions and is key to affordable and reliable electricity,” he said in a statement.

The EPA proposal, a major component of the climate plan that President Obama announced in June, contains some changes from the version EPA released in April 2012.  The new proposal takes into account comments from industry about the feasibility of certain technologies and offers electric utilities more flexibility in meeting the standard, McCarthy said.

Under the revised proposal, new large natural gas-fired turbines would need to meet an emission limit of 1,000 pounds of carbon dioxide per megawatt-hour. New small natural gas-fired turbines would need to meet a limit of 1,100 pounds of CO2 per megawatt-hour.

The CO2 cap for new coal-fired units would be 1,100 pounds per megawatt hour, but operators of such units would have the option to meet a higher limit if they average emissions over multiple years, giving the units additional operational flexibility, McCarthy said.

McCarthy said new coal-fired plants would be encouraged to use “partial” carbon sequestration and storage (CCS) technology as a way to stay within the air pollution limits. She said that CCS “is a technology that has been demonstrated and is actually being constructed on facilities today.”

But industry officials say CCS is not ready for prime time and that EPA’s proposed new pollution limits essentially will prevent new coal-fired plants from being built.

Melissa McHenry, director of external communications for American Electric Power, a large, Columbus, Ohio-based utility, says, “The proposal is disappointing. After receiving millions of comments, the EPA still proposed a rule that effectively eliminates coal as an option for a new powerplant by setting an emissions limit significantly lower than any existing coal-fueled generating technologies can achieve.”

Although a few power companies, including AEP and Southern Co., an Atlanta-based utility, have developed CCS demonstration projects, none sufficiently demonstrates the technology's commercial viability on a national scale, AEP and Southern Co. spokespersons say.

But EPA's McCarthy challenged arguments that the proposal would be a death knell for new coal-fired plants. “I think this proposal, rather than killing coal, sets a path forward for coal to be part of the diverse mix of the energy supply,” she said.

The proposal could face opposition from Republican lawmakers and some Democrats in coal-rich states. Ed Whitfield (R-Ky.), chairman of the House energy and power subcommittee, said in a statement that he would do everything in his power “to prevent this regulation from taking effect.”

The proposed rule will go through a public-comment period, including public hearings. It is expected to become final by fall 2014.

In the meantime, EPA will begin reaching out to states, environmental groups, industry and the public as it starts work on regulatory guidance for air emissions from existing powerplants, due next June.