Thursday, April 19, 2012

Live blogging the new EPA coal plant rule - this'll be exciting

The rule discussed by Eli will require new coal plants in the US to emit no more CO2 than natural gas plants do.  Thought I'd take a closer look at it, so here it is.  Below are a few topline comments, then after the jump are specific callouts and leg-shivering quotes from the doc.

  • If you want to see our existing coal plants required to either install carbon capture and storage, do offsets that hopefully work, or get shut down, then you should hope that this proposed rule results in new coal/coke plants get constructed and use CCS.  Given the economics favoring natural gas over coal for new plants after the next few years finish coal plants that are already in the pipeline for construction, then the only way this will happen is through subsidies for CCS.
  • This is a regulated utility market we’re talking about, not a regulated free market.  Don't expect classic economic principles to work here.
  • This proposal is meant to help get carbon capture and storage going. The way it does that is that it requires CCS for new coal plants, and because CCS is required, utilities can add it and then pass on the costs/risks to customers. Absent the requirement, then the utility might not be allowed by regulators to pass on the costs. Consider this proposed rule to be a “permission slip” to do carbon sequestration.
  • Big implication: if CCS gets off the ground for new plants and proves to be not too expensive, then it may be required for old plants.  See for example, discussion of plant modifications on p. 42-44.
  • Treating new coal plants as having to meet natural gas emission standards, rather than establish special standards for coal, is important precedent for future attempts to regulate existing coal plants.
  • I think I may submit actual comments to the EPA, see discussion of pages 48 and 62.  Anyone want to join in?

Specific comments/excerpts after the jump.




BTW, the page numbers link to the temporary placeholder link above.  I just realized they might go away when this gets officially published.  Oh well.

page 1:
remember, just a proposed rule, this puppy could change

applies to all new fossil fuel plants.  Comment: In practice that might just mean coal and petroleum coke, but just in case something weird happens, it's ready for the kerosene plants.

p. 2:
"In its base case analysis, the EPA does not project any new coal-fired EGUs without CCS to be built in the absence of this proposal through 2030."

Comment:  A Dept of Energy doc from January anticipates new coal plants up to 2017 at least (slide 8).  I guess they don't have to agree with each other.

Coal/coke plants can achieve compliance by using CCS for 50% of all emissions, or 100% of second half of lifetime emissions.

They expressly rule out regulating new plants that begin construction within a year of rule finalization.  On p 15 they rule out regulating increased capacity at existing plants         

p. 14:
"we expect the difference  [between coal with CCS v natural gas without] to decrease over time as CCS becomes more mature and less expensive."

Comment:  I'm probably friendlier to CCS than many other climate hawks, but I have trouble buying this statement.

`New coal plants putting off compliance into the future will still have some immediate compliance requirements, so that's good.

p. 16-17:
Comment:  Fifteen proposed plants - no regulation if they start construction within a year - this might explain what DOE anticipated.  I'll bet not all 15 get going in time.  I'll further bet this proposed rule will soften before finalization.

p. 24:
Comment:  fossil fuel plants are 40% of US CO2 emissions.  that's a lot.

"New coal-fired power plants with CCS are being permitted and built today, albeit usually with considerable financial assistance from the federal government."

Comment:   had to look this up.  There actually is some activity with CCS, but it's mostly to enhance oil recovery, spewing still more CO2 in the air.  That should hardly count.

p.26
[One utility decided on a] recent deferral of a large-scale CCS retrofit demonstration project on one of its coal-fired power plants because the State’s utility regulators would not approve CCS without a regulatory requirement to reduce CO2.

Comment: demonstrates we have to remember this is not a free market that we’re talking about, and the relevance of a regulated utility here – the utility couldn’t pass onto consumers the cost of CCS because regulators said the utility didn’t have to undertake CCS.

p.31:
Comment:  Doesn’t affect biomass boilers that cofire with fossil fuel – implicit recognition that the CO2 from biomass is at least partially recycled.

p. 42:
“For purposes of today’s action, the EPA does not have a sufficient base of information to develop a proposal for the affected sources that may be expected to take actions that would constitute “modifications” (as defined under the EPA’s NSPS regulations) for GHGs and therefore be subject to requirements for new sources. As a result, the EPA is not proposing requirements for NSPS modifications for GHGs.”

Comment:  this process could show CCS is sufficiently feasible that it should be required for modifications.

p. 44:
“In today’s action, we solicit comment on the types of modifications power plants may undertake and the appropriate control measures. Depending on the information we develop, we may issue proposed standards of performance in the future.”

p.48:
“in today’s action, the EPA is not including a proposal for reconstructed units for GHGs. Instead, we solicit comment on how we should approach reconstructions and, depending on the information we receive, we may propose and finalize a standard for reconstructions at a later time.”

Comment:  this is a significant loophole.  Instead of constructing a new plant subject to CCS, utilities can just reconstruct old ones.  This should be eliminated.  They’re soliciting comments, so I might actually write something.  EPA's reasons for this discussed more extensively starting at p. 186.

p. 60:
Comment: CO2 sinks from land use and forestry make up for one-sixth of our CO2 emissions.  I should probably know more about this.

p. 62:
Comment: Coal plants also emit nitrous oxide and methane, but they’re not proposing controls due to lack of info.  They should include these.

p. 64:
Comment:  EPA promised in a settlement “(1) a rule under CAA section 111(b)that includes standards of performance for GHGs for new and modified EGUs that are subject to 40 CFR part 60, subpart Da; and (2) a rule under CAA section 111(d) that includes emission guidelines for GHGs from existing EGUs that would have been subject to 40 CFR part 60, subpart Da if they were new sources.”

Comment: looks like this proposed rule omits part of part 1 and all of part 2.  I don’t get it.

p. 73:
“Under this proposal, no averaging or emissions trading among affected sources would be allowed.”

p. 76-77:
Comment:  Considering whether to eliminate option in 2020 of allowing compliance via 100% CCS in second half of a coal plant’s life.  Probably a good idea too.  If they start with 50%, they can later be required to do 100%.

p. 109-110:
On EPA’s legal authority to do this, they say “Second alternative interpretation: Rational Basis Prerequisite. As a second alternative interpretation, the lack of any requirement in CAA section 111 addressing whether and how the EPA is to evaluate emissions of particular pollutants from sources in the listed source category as a prerequisite for regulation may be viewed as a statutory gap that requires a Chevron step 2 interpretation. In this case, the EPA is authorized to develop an interpretation that reasonably effectuates the purposes of CAA section 111.”

Comment:  Look up Chevron.  This is an attempt to bullet-proof the rule, although it could also then be reversed via the same reasoning by a Romney Administration.

p. 119:
“Currently available CO2 capture and compression processes are estimated to represent seventy to ninety percent of the overall CCS costs”

p. 143:
“we note that recently, several owner/operators have announced that they do not intend to construct coal-fired power plants without CCS. They have explained that they anticipate more widespread CO2 control requirements in the future, so that constructing coal-fired plants at this time without CCS could leave them subject to liability for high retrofit control costs in the future.”

Comment: Remaining 110 pages:  Combo of pretty technical stuff and paperwork.  The actual proposed rule starts at p. 231.  Think I'm done here.

15 comments:

Russell said...

How many Kg CO2 per KWH could be saved by removing all the aerosol removal gear previous EPA mandates have retrofitted to the existing plants?

Anonymous said...

@Russell

From what I can find, sulfur and NOx controls use 2-3% of plant electrical output, so getting rid of the emissions controls doesn't really help you on the carbon front. It certainly wouldn't put coal anywhere near compliance with the proposed rule.

I'm sure the utilities wouldn't mind selling 3% more electricity per ton of fuel they buy; I'd recommend using those profits to buy property upwind of the plant.

HAUS.MAUS

David B. Benson said...

The State of Michigan utility oversight office recently made some estimates combined with actual wind operator contracted prices. From VC Summer documentation I have an NPP price and using the NREL LCOE calculator I put together to prices for CCGTs. The higher is for natgas @ US$7/MMBtu and the lower for the current natgas price of US$2/MMBtu.

New coal est. (no CCS) --- US$133/MWh
New CCGT (high est.) --- US$77/MWh
New NPP (precise est.) --- US$76/MWh
Wind --- US$63/MWh
New CCGT (low est.) --- US$38/MWh

As coal miner productivity has been declining in the US, coal prices continue to rise. The price is high enough already (at least in Michigan) that there is no way that, even without CCS, a new coal plant will be approved by the utility regulatory commission. Therefore new coal burners are already not going to be built and the EPA ruling is moot.

David B. Benson said...

If the ruling is extended to existing coal burners those plants will have to close. There is no way that CCS will be able to compete with a new CCGT burning natgas at currently forseeable prices for the fuel.

EliRabett said...

Prittyfied the text a bit, hope that is ok.

Where does this leave oil shale and sands, do the CO2 emission regs only apply to the power plant or the entire process?

J Bowers said...

In slightly related news, water regulations hit fracking:

Irony Alert: Pennsylvania Fracking Operation Stopped due to Drought

Russell said...

Anonymous said...
@Russell

"From what I can find, sulfur and NOx controls use 2-3% of plant electrical output, so getting rid of the emissions controls doesn't really help you on the carbon front. "

Does that include the negative feedback from reduced plant efficiency ?

Thermal plant overall thermodynamic efficiency had risen from under 10% circa 1900 to ~38% by 1970, but fell back in consequence of Clean Air Act emission control retrofits putting a literal damper on existing plant's delta T.

Brian said...

Thanks for prettifying, Eli. I got lazy and imported part of it from a Word doc I made offline, which was a real pain.

Rule applies only to fossil fuel power plants producing over a certain amount of power. There's some stuff I skimmed about certain kinds of plants that won't be regulated, mostly smaller ones. I don't know how much power's needed for oil shale/sand production, but I doubt they'll be directly affected by this, and that stuff isn't usually used for electric power production.

David - EPA is using two-part reasoning: 1. CCS will get cheaper, and 2. Nat gas is an already available alternative for new sources, so even if #1 doesn't happen, holding the industry to a standard achievable via #2 is appropriate.

If nat gas or renewables ever become so cheap that the costs of new construction plus ongoing costs are cheaper than the ongoing costs of existing coal ops, then the same reasoning could be applied by EPA to exising coal plants - meet the same standard via CCS or get shut down. If CCS isn't viable, then get shut down.

Alternatively, if CCS proves to be cheap enough, EPA could require it for retrofits regardless of whether replacement by nat gas/renewables is an option.

Anonymous said...

@Russell

US fleet efficiency is around 32% with significant variation between plants.

I don't know exactly what the delta-T implications of the various emissions control technologies are; I'll ask around if I get a chance. I have heard that the low-sulfur coal being burned in many plants has less energy per ton (and comes from farther away).

My understanding is that the efficiency decreases from emissions controls are swamped by the intrinsically high carbon intensity of coal.

HAUS.MAUS

David B. Benson said...

Russell --- Thermal efficiency is entirely a steam side matter having to do with how well the Rankine cycle approaches Carnot efficiency. Emissions control is entirely a burner side matter. Adding the blower and filters to the flue gas path will have no effect on thermal efficiency provided to equipment is properly engineering to maintain optimal upper end temperatures.

David B. Benson said...

US coal consumption dropped 3% in 2011. It is firmly predicted to decline another 4% in 2012.

Anonymous said...

@David B. Benson

Some NOx control methods reduce efficiency by limiting boiler temperature (N0x forms at high temperatures). Other N0x control methods have little or even positive impact on efficiency.

HAUS.MAUS

David B. Benson said...

HAUS.MAUS --- I would stand corrected but I'm under the impression that EPA has no NOx rulings for either coal or natgas burners. What has been scubbed for some time is SO2 and now further measures will have to be taken to remove mercury and some other nasties.

Anonymous said...

@David B. Benson

EPA sets standards for maximum atmospheric concentrations (NAAQS).

States put specific limits on power plant emissions (or use emissions trading) to be in compliance. Big power plants usually have NOx controls (Selective catalytic reduction).

So yes, EPA doesn't directly set specific standards.

EPA sets limits on mobile sources like diesel engines.

HAUS.MAUS

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