By Sharryn Harvey, online editor, Power Engineering magazine
Many industry and legal experts are saying that uncertainty over proposed federal rules and regulations are now affecting some renewable energy developments in the country as companies are beginning to put construction plans on hold.
Georgia Power announced that they would postpone a planned biomass conversion at their Plant Mitchell coal-fired plant in Georgia because of uncertainty over a proposed boiler rule from the Environmental Protection Agency (EPA).
The rule, called the industrial boiler Maximum Achievable Control Technology, would regulate emissions of hazardous air pollutants from industrial boilers and would likely affect biomass boilers.
Georgia Power said it would hold off on the retrofit that was scheduled to begin in April 2011. A new construction date has not been set.
First Energy is also among the power generators planning a biomass conversion project at its 312 MW coal-fired R.E. Burger plant in Ohio. First Energy spokesperson Ellen Raines said the company is moving on with its plans despite questions about the rule.
“Our Burger retrofit is part of a consent order with the EPA,” Raines said. “Under that order, we have a deadline by 2012 so we have to get that done no matter what.”
Randy Rawson, president and CEO of the American Boiler Manufacturers Association, said he is not sure if the boiler rule is the only thing affecting new projects.
“Eighteen months ago, I would have said the rule is affecting new projects, but the economy chimed in and that blurred everything,” Rawson said. “I don’t know if you can say specifically that the lack of a boiler MACT is at the foot of this now without the financial problems.”
According to the DOE’s Biomass Boiler and Furnace Emissions & Safety Regulations, higher efficiency and lower emitting biomass units may face a cost disadvantage when competing with units that have higher emissions and lower efficiency, especially in the Northeastern U.S. Some of those factors that effect boiler efficiency and construction costs can be designed into the technology, such as combustion chamber design, flue gas recirculation and the addition of thermal storage.
Rawson said he has advice for companies that are not sure what the next step should be.
“You install the best state-of-the-art equipment you can find at a reasonable price you can build for the future,” Rawson said. “You won’t have to spend extra to tweak state-of-the-art equipment as you would old equipment.”
Graham Noyes, attorney with Stoel Rives law firm, said this is a time of uncertainty in the power generation industry.
“We see it on both sides with emitters having to factor (carbon dioxide) in as a cost but it’s a variable cost right now,” Noyes said. “And we also see projects that sequester CO2 or reduce methane on the positive side and they can’t figure out what the value of those offsets are.”
Noyes said it is important for EPA to establish rules quickly so the industry can go on with business.
“The longer we have uncertainty, the more we have market participants like Georgia Power who say ‘We don’t know what to do so we’re not doing anything’,” Noyes said.
Sumesh Arora, director of Strategic Biomass Solutions, Mississippi Technology Alliance, said companies are hesitant to make any commitments to projects without guidance and incentives from the government.
“If there aren’t any incentives and only the impression of impending regulations, companies know this is a long-term investment and they’re not willing to do that if something is going to change,” Arora said. “It’ll lead to cost overruns and, like Georgia Power said, it will ultimately affect the consumers.”
Noyes said that hesitation to build could force states to move ahead with their renewable portfolio standards.
“States won’t hold their breath to see what the EPA or Congress will do with climate change,” Noyes said. “You see it in some areas like in New England with the RGGI (Regional Greenhouse Gas Initiative) system and the Western Climate Initiative has had some wind taken out of its sails, there hasn’t been a lot of attention paid to that.”
Arora said that projects would be affected depending on the development of the technologies.
“If they are behind in development then they will get the short end of the stick,” Arora said.
Arora said it could also affect regions differently.
“Biomass is one of the most prevalent sources in the Southeast,” Arora said. “Wind is poor and solar is marginal, but woody biomass is really the best choice for developing renewable energy projects in the south.”