EPA delays finalizing New Source Performance Standard regulations

emissions

By Justin Martino, Associate Editor, Power Engineering magazine

The U.S. Environmental Protection Agency has delayed finalizing its New Source Performance Standard regulations for new power plants, which many people have said would have ended the construction of new coal-fired power plants in the U.S.

The rule, which would have limited carbon dioxide emissions to 1,000 pounds per MWh, had a deadline of April 13 for being finalized. EPA spokeswoman Alisha Johnson said the agency is working on the rule and no timetable has been set for any revisions.

“We continue to review the more than 2 million comments we have received on the rule,” Johnson stated in an e-mail.

Although new natural gas-fired combined cycle plants would have been able to comply with the stricter standard, rising prices of natural gas and concerns about fleet diversity and the transmission infrastructure for natural gas has raised concerns for many companies in the power industry. New coal-fired power plants would not have been able to comply with the rule using current carbon capture and storage technology.

In addition, concerns had been raised from members of President Barack Obama’s party, with four Democratic senators writing a letter asking the president to amend the regulations to allow for the construction of coal-fired power plants. Senators Joe Manchin of West Virginia, Joe Donnelly of Indiana, Heidi Heitkamp of North Dakota and Mary Landrieu of Louisiana requested Obama to urge the EPA to differentiate the standards based on fuel type and establish supercritical coal generation technology as the performance standard for new coal-based technology.

The rule was introduced in March 2012, while Lisa Jackson was serving as the EPA administrator, and was written by the agency’s Office of Air and Radiation. Gina McCarthy, the current head of that office, has been nominated to serve as the EPA’s administrator. Her nomination is currently being considered by the U.S. Senate.

McCarthy said during her confirmation hearing last week that she expects coal to remain an important part of the U.S. energy mix, and the EPA will give companies flexibility to make changes to comply with new emission standards affecting the power industry.

Despite the increase in stricter regulations for power plants in the U.S., coal remains the top source of fuel for electricity generation in the country. According to the U.S. Energy Information Administration, coal-power generation accounts for 39.9 percent of the power generation in the U.S., and the administration is expecting an increase in coal-fired generation over the next two years. In the administration’s Annual Energy Outlook 2013, it projected that that coal consumption for energy production would increase by 0.1 percent per year from 2011 to 2040, with 6.1 GW of coal-fired capacity currently under construction being completed by the end of 2015.

The EIA’s most recent Short-Term Energy Outlook projected a 7.8 percent of increase in U.S. coal-fired power generation in 2013. Other sources have also reported an increase in coal usage as well, with Genscape’s Generation Fuel Monitoring Service reporting an increase of 21 percent of coal-fired power generation in March 2013 compared to March 2012.

Although the rule would not have affected existing coal-fired plants or plants currently under construction, multiple coal-fired power plants have recently been shuttered or had plans introduced to convert them to another fuel source. The EIA predicts 15 percent of the coal-fired power capacity active in 2011 will be retired by 2040, while only 4 percent of new generation added during that time period will be coal-fired units. Several planned coal-fired plants have been canceled recently, with executives from the White Stallion Energy Center in Texas citing proposed rules from the EPA as a major obstacle in construction new coal-fired generation.

Projects under development that are not being canceled are also being affected. Allied Energy Services recently said they were in a “dead sprint” to begin construction of the $2.1 billion Plant Washington in Georgia, which had already been delayed while developers waited for a final Mercury and Air Toxic Standard, before the NSPS is finalized.

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