Environmentalists and public-health advocates are lauding a plan to reduce greenhouse-gas emissions from new electric powerplants, but electric utilities and other industry groups say the proposal would effectively kill new coal-fired generation plants in the U.S.
"We do not expect to see a whole lot of new coal being proposed, and once this rule goes into effect, it's probably going to be even less, at least in the United States," says Andy Byers, associate vice president of energy business and director of environmental services for Black & Veatch. Because the new rule would require partial carbon capture and sequestration, "the economics of that, in addition to the auxiliary power requirements to run carbon-capture systems, [will] make it more difficult [for coal] to be competitive in the marketplace, assuming that we have continued low or competitive natural-gas prices," he adds.
If the proposal becomes final, it could force some engineering and construction firms that feature coal-based work as part of their portfolio to shift focus, adds Block Andrews, strategic environmental solutions director at Burns & McDonnell.
Environmental Protection Agency Administrator Gina McCarthy unveiled the proposal on Sept. 20 in Washington, D.C. The proposed regulation, a major component of President Obama's climate plan announced in June, contains some changes from the version EPA released in April 2012. According to EPA, powerplants are the largest concentrated source of emissions in the U.S., accounting for approximately a third of all domestic greenhouse-gas emissions.
The new proposal takes into account comments from industry about the feasibility of certain technologies and offers electric utilities flexibility in meeting the standard, McCarthy said.
Under the revised proposal, new large natural-gas-fired turbines would be required to meet an emission limit of 1,000 lb of carbon dioxide per megawatt-hour. New small natural-gas-fired turbines would face a limit of 1,100 lb of CO2 per MW-hour. The CO2 cap for new coal-fired units would be 1,100 lb per MW-hour, but operators would have the option to meet a higher limit by averaging emissions over multiple years, McCarthy said.
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. McCarthy said, "[CCS] is a technology that has been demonstrated and is actually being constructed on facilities today." Partial CCS calls for a 30% to 50% reduction in emissions, compared to 90% to 100%.
Already, utilities have largely shifted to building natural-gas-fired powerplants because 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 both the reliability and affordability of the U.S. electric grid.
Industry officials also say CCS is not ready for widespread commercial use. Although a few power companies—including Columbus, Ohio-based American Electric Power and Atlanta-based Southern Co.—have developed CCS demonstration projects, none sufficiently demonstrates the technology's commercial viability on a national scale, AEP and Southern Co. spokespersons say.