The Environmental Protection Agency (EPA) on Friday issued long-awaited proposed rules for greenhouse gas (GHG) emissions for new power plants, leaving gas-fired plants mostly unaffected but making construction of new coal-fired plants problematic.
Critics have called the rules the “death knell for coal.” Higher priced coal-fired power already has lost load to today’s lower-priced natural gas. Coal also doesn’t fare well in a comparison of the two fuels based on the length of time and the amount of investment required for construction. Carbon capture and storage (CCS) add-ons that would be required under the new rules will add to the cost.
EPA said the proposed Clean Air Act standards would cut carbon pollution from new power plants in order to combat climate change and improve public health. New large natural gas-fired turbines would need to meet a limit of 1,000 pounds of carbon dioxide (CO2) per megawatt-hour (MWh), while new small natural gas-fired turbines would need to meet a limit of 1,100 pounds of CO2/MWh. New coal-fired units would need to meet a limit of 1,100 pounds of CO2/MWh and would have the option to meet a tighter limit if they choose to average emissions over multiple years, giving those units additional operational flexibility.
Power plants are the largest concentrated source of emissions in the United States, accounting for roughly one-third of all domestic GHG emissions, according to EPA.
The proposal would come down hard on coal-burning plants, which currently emit an average 1,768 pounds of CO2/MWh, obligating them to use CCS technology, according to the Institute for Energy Research. Natural gas plants being built today, including combined-cycle plants, would meet the rules’ requirements, an EPA spokesperson said.
The updated emissions rule doesn’t require enough of gas-fired power plants, according to Rachel Cleetus, an economist in the Union of Concerned Scientists’ Climate and Energy Program. “The EPA should seriously consider a stronger standard for new large natural gas plants,” Cleetus said. “New combined-cycle natural gas plants emit an average of 800 pounds of carbon dioxide per megawatt hour, which is well below the proposed standard.”
In June, President Obama issued a presidential directive to the EPA to begin drafting rules governing carbon emissions from power plants as part of a White House climate action plan (see Daily GPI, June 26). That plan came down hard on coal-fired power plants, pledged continued support for the development and use of non-polluting renewable energy and promoted “cleaner-burning natural gas” as a bridge to a clean future.
The other shoe is set to drop June 1, 2014 when EPA is scheduled to issue proposed standards for existing power plants. Depending on how rigorous the GHG limitations are, some older natural gas-fired plants may have trouble meeting them.
The GHG standards proposal comes 18 months after EPA issued its first-ever carbon pollution standard for future power plants (see Daily GPI,March 28, 2012). That proposal, which would have established a limit of 1,000 pounds of carbon/MWh for all future units, prompted more than 2.5 million public comments and a wealth of information submitted by the power sector and environmental groups, leading EPA to update the proposed rules, this time setting up different standards for coal- and gas-fired power plants. The 2012 proposal has been rescinded.
“These carbon pollution standards are flexible and achievable,” said EPA Administrator Gina McCarthy. ” They pave a path forward for the next generation of power plants. The standards are flexible because they set different standards for different types of power plants. The standards are achievable because they’ll secure major public health and environmental protections, and they reflect the demonstrated performance of a variety of efficient, clean, homegrown technologies, technologies that are currently entering the market and being constructed today.”
In response to the release of the proposed New Source Performance Standards (NSPS), some observers said the rules would result in higher electricity prices for consumers. And CCS remains an unproven technology, they said.
“While we are pleased that EPA’s re-proposed NSPS for new power plants sets separate standards for different fuel types, we are concerned that the emission limit for coal combustion technologies is unachievable and will harm energy diversity by effectively ending construction of new coal-fired power plants in the United States,” said the American Chemistry Council. “Even new facilities that employ the most state-of-the-art technology in commercial use today — so-called ‘supercritical’ plants — will be unable to meet the standard.”
CCS “is neither adequately demonstrated nor economically feasible,” according to the Edison Electric Institute. “As proposed, this rule would hinder efforts to develop cost-effective CCS — a critical technology for mitigating greenhouse gas emissions going forward — because it effectively prevents the building of new clean coal plants.”
But, according to EPA’s proposal, utility announcements and Energy Information Administration modeling indicate that “even in the absence of this rule, existing and anticipated economic conditions mean that few, if any, solid fossil-fuel fired EGUs [utility generating units] will be built in the foreseeable future; and electricity generators are expected to choose new generation technologies (primarily natural gas combined-cycle) that would meet the proposed standards.”
A comment period on the proposed rules will be open for 60 days following publication in the Federal Register. In addition, EPA said it has initiated outreach to a variety of stakeholders to help inform the development of emission guidelines for existing power plants.
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