By Bryan Hannegan, Vice President, Electric Power Research Institute

Over the next few years, electric power companies will face a host of new environmental regulations that will tighten existing limits on air pollutants and other waste streams and introduce restrictions on previously unregulated substances. Although each of the new rules had been developed independently of the others, all will likely take effect between now and 2018. This confluence of new environmental regulations presents difficult challenges for the electric power industry – particularly for continued operation of existing coal-fired power plants. In some cases, compliance strategies and/or technological solutions for one regulation may have unintended impacts on any number of other regulations. For example, removal of air emissions – such as mercury and selenium – under the new Mercury and Air Toxics Standard (MATS) could result in some of those substances finding their way into wasterwater streams, potentially putting the plant out of compliance with emerging new effluent guidelines.

Amid all the uncertainty, one thing is certain; the U.S. generation fleet will change as a result of the new regulations. The smaller, older and less efficient power plants will be disproportionately more impacted because retrofitting them with control technologies will likely be too expensive to bring them into compliance. The power of information, however, can help power companies make the decisions they need to make today, despite all the uncertainty of future environmental rules.

EPRI research provides scientific data to help clarify the scientific issues associated with new environmental limits. Policy makers, regulators, and other stakeholders alike can use the information to inform the development of environmental rules and regulations based on sound science. EPRI research looks to ensure that the best possible data are available for use in developing the rules and can provide analyses of the estimated technology needs or operational requirements of proposed rules.

For example, EPRI's analysis of the hazardous air pollutant emissions data submitted by power plant operators as part of an information collection request (ICR) to support MATS illustrates how EPRI research can be used to help bring additional clarity to an uncertain future. EPRI reviewed ICR stack test data from more than 250 coal- and oil-fired power plants that resulted in identifying many significant errors in the data used to calculate proposed limits and inconsistencies in calculation procedures. The analysis also found that proposed limits did not adequately represent the HAPs emissions variability, no facility would likely meet the proposed limits for new generating units with many limits set below levels at which current test methods can accurately measure, and the health risk analyses for mercury, other HAPs and PM exposures lacked scientific rigor.

EPRI's research represented some of the most detailed analyses undertaken on power plant HAPs emissions and potential health impacts. When the final MATS rule was released, some adjustments to mercury emissions limits were made and the requirement for total PM as a metal emissions surrogate to filterable PM was modified. More importantly, EPRI data analyses and risk assessments can provide valuable research to draw upon as EPA and the states implement the MATS rule.

The MATS rule is one of several such rules affecting the future of fossil generation. Others will impact emissions of conventional air pollutants, use of cooling water, and handling of coal ash. EPRI's new regional economy and energy model is being used to analyze the implications all these new environmental regulations and help communicate about associated industry challenges. This new U.S. economy-wide model builds upon previous EPRI work but incorporates regional detail including improved treatment of renewables and expanded regional demand side detail. Our latest environmental control scenarios using this new regional economic model show that about 60-100 GW of existing coal capacity will retire rather than retrofit, depending on the final form of rules affecting cooling water and coal ash. The remaining coal fleet will deploy between $150 and $180 billion in new capital to build the pollution control equipment required for compliance with the rules in their current form under existing compliance timelines. Nitrogen oxides, sulfur dioxide, and mercury control technologies would each be responsible for about one third of these total retrofit expenses.

The model also demonstrates regional generation technology mixes under different policy scenarios and technology cases. For example, under a hypothetical Clean Energy Standard scenario, coal would continue to play a role in the Midwest and South to meet demand through 2050, but renewables would expand rapidly in the West and Midwest regions and nuclear would expand in the South and East. Absent innovations in generation technology, these trends could lead to higher electricity prices, but investments in R&D and innovative technology development can mitigate these increases over the long-term. In a reference case involving only environmental controls, investments in R&D technology innovation could bring wholesale electricity prices down about $40/MWh by 2050.

EPRI's new regional economic model has shown that under any future policy scenario, different regions of the United States will respond differently to a policy or regulatory restraint based on their resource endowments, whether or not they have existing fossil assets, and their regional demographics. Nonetheless, despite these regional differences and uncertain policy and regulatory futures, innovation in energy R&D is the one certainty in an uncertain world.