Bernstein analyst says four coal units subject to EPA CO2 limbo

Nationally, there is roughly 2,200 MW of coal-fired power generation at four units that have received permits but have not yet started construction, and therefore would be in non-compliance with EPA proposed New Source performance standards for greenhouse gas (GHG) emissions.

That’s the assessment of Bernstein Research Senior Analyst Hugh Wynne in a Sept. 23 review.

The planned coal units that would have the uncertain future include the following:

**Tenaksa’s Trailblazer project in Texas. Tenaska would own almost two-thirds of the 765-MW (gross) project with Arch Coal (NYSE:ACI) owning the rest.

**Power4Georgians LLC’s Washington plant in Georgia would be an 850-MW facility.

** Wolverine Power Supply Cooperative is proposing to build two 300-MW units at the Rogers City facility in Michigan.

The proposed carbon dioxide (CO2) rules for new power generation were issued by EPA Sept. 20. 

Of all the fossil-fueled power plants that have entered service over the last five years, only one class of plant – new combined-cycle gas turbines — would meet the proposed EPA rule. Combined-cycle emissions rates have averaged roughly 800 lbs of CO2/MWh.

For new gas-fired plants, the proposed rule would set a 1,000 lbs of CO2 per MWh limit for larger units (output greater than 850 MMBtu/hour or capacity greater than ~100 MW) and 1,100 lbs of CO2 per MWh for small units (output less than 850 MMBtu/hour or capacity less than ~100 MW).

For new coal-fired plants, the proposed rule would set a 1,100 lbs of CO2 per MWh average limit over a 12-month operating period or a 1,000 to 1,050 lbs of CO2 per MWh average limit over a seven-year operating period.

Technologies to capture and sequester CO2 from coal fired power plants at this rate are available, but are very expensive. The Southern (NYSE:SO) Kemper County integrated coal gasification and combined cycle plant (IGCC), for example, is capable of capturing some 65% of the CO2 emissions of its coal feedstock.

The proposed rule would only apply to coal-fired and gas-fired units with a nameplate capacity greater than 25 MW and with a capacity factor greater than 30%, thus excluding peaking units.

The EPA had originally proposed these regulations, known as New Source Performance Standards or NSPS, in March of 2012. However, the EPA failed to finalize the proposed NSPS within the twelve-month window stipulated by the Clean Air Act, the Bernstein analyst noted.

Bernstein Research is part of Sanford C. Bernstein & Co.

About Wayne Barber 4201 Articles
Wayne Barber, Chief Analyst for the GenerationHub, has been covering power generation, energy and natural resources issues at national publications for more than 20 years. Prior to joining PennWell he was editor of Generation Markets Week at SNL Financial for nine years. He has also worked as a business journalist at both McGraw-Hill and Financial Times Energy. Wayne also worked as a newspaper reporter for several years. During his career has visited nuclear reactors and coal mines as well as coal and natural gas power plants. Wayne can be reached at wayneb@pennwell.com.