The Clean Power Plan, FutureGen, EPA and Jumbo Shrimp

    March 3, 2015 4:27 PM by Russell Ray, Chief Editor, Power Engineering

    The Obama administration’s policy on coal is like “jumbo shrimp.” It’s full of irony and contradictions.

    The administration’s dichotomous worldview reached a new level last month, when it pulled the plug on FutureGen 2.0, a $1.65 billion clean coal project in Illinois featuring carbon capture and sequestration (CCS) technology. The 12-year effort, launched by President Bush in 2003, was suspended Feb. 3 after it became clear the public-private venture was not going to meet its target for private-sector funding.

    Although the market for CCS projects is almost nonexistent in the U.S., the lack of interest stems from the U.S. Environmental Protection Agency’s own proposal for curbing greenhouse gas emissions from new power plants.

    EPA killed the market for commercial scale CCS projects when in 2013 the agency proposed limiting carbon dioxide emissions from new coal-fired plants to 1,100 pounds per megawatt-hour, well below the average CO2 emission rate of 1,700 pounds per MWh for coal plants. The new standard was based on CCS technology, which isn’t used anywhere in the U.S. on a commercial-scale power plant.

    EPA argued the new standard would foster the development of CCS technology and boost demand for CCS projects. Instead, the proposal killed any incentive to build a coal-fired project in the U.S. With no incentive to build, there would be no incentive to advance CCS technology.

    If the standard were based on proven solutions such as supercritical and ultrasupercritical technologies, the industry would be pursuing new coal projects today and the development of CCS technology would be accelerating

    Under the Clean Air Act, any CO2 standard for new plants must be based on “the best system of emission reduction” that has been “adequately demonstrated.” CCS has not met this standard, and the suspension of FutureGen bolster’s this claim.

    It’s another piece of evidence that EPA’s Clean Power Plan (CPP), which establishes CO2 standards for new and existing power plants, is unreasonable and legally unsound.

    “It’s sort of another nail in the coffin of EPA’s proposal,” Jeff Holmstead, former assistant administrator of the EPA and a leading climate change lawyer, told Thomson Reuters.

    It will be difficult to reconcile the administration’s decision to scuttle FutureGen, the champion of CCS technology, with its proposal to mandate the use of CCS at new power plants fueled with coal. 

    FutureGen was a partnership between the U.S. Department of Energy and an industry coalition known as the FutureGen Industrial Alliance. The DOE dubbed the project “groundbreaking.” Officials described it as a near-zero emissions plant using oxy-combustion technology to capture 1.1 million tons of CO2 each year – more than 90 percent of the plant’s CO2 emissions.

    “It makes no sense to pull the plug on $1 billion committed to America’s signature near-zero emissions power project at such a critical time for these investments in technology,” Gregory H. Boyce, chairman and chief executive officer of Peabody Energy, the world’s largest private-sector coal company and a member of the FutureGen Industrial Alliance, said in a statement.

    Meanwhile, Susan Kelly, president and CEO of the American Public Power Association, testified before the Federal Energy Regulatory Commission (FERC) last month about the CPP, claiming the proposal is “unworkable.”

    The CPP, issued under section 111(d) of the Clean Air Act, would require existing power plants to reduce CO2 emissions 30 percent below 2005 levels by 2030. Although the national average would be 30 percent, the specific reduction target for each state will vary. Under the proposed rule, each state’s CO2 reduction target is based on four building blocks: 1) Heat rate improvements; 2) Dispatch changes among affected units; 3) Increasing the use of renewable power; 4) Demand-side energy efficiency.

    For some states, building block 2 is the only option for meeting the reduction targets. “The proposal’s building blocks are unworkable, and few states will be able to meet the required interim emissions reductions by 2020,” Kelly told FERC. “States need a longer glide path.”

    If the Obama administration’s real intent is to curb CO2 emissions without eliminating coal as an option for power providers, then its mission is surely in jeopardy.   

    Like jumbo shrimp, EPA’s plan to curb CO2 emissions is fraught with contrasting ideas and principles. I’m sure the logical Mr. Spock would agree. Live long and prosper.

    If you have a question or a comment, contact me at Follow me on Twitter @RussellRay1

Russell Ray

The Power Points blog, written by Russell Ray, Editor-in-Chief of Power Engineering, covers all forms of power generation, including coal, gas, nuclear and renewable. It examines a wide range of issues and advancements in pricing, policy and technology. You can follow Russell on Twitter @RussellRay1.

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