EPA gives up on 2012 CO2 proposal for power plants, issues a new one

The U.S. Environmental Protection Agency said in a notice to be published in the Jan. 8 Federal Register it is officially withdrawing the controversial April 2012 proposal to set greenhouse standards for new coal plants at the same low level as natural gas-fired plants.

The April 2012 proposal was for new source performance standards for emissions of CO2 for new affected fossil fuel-fired electric utility generating units (EGUs). The EPA said it received more than 2.5 million comments on that notice and has received new information, which together necessitates substantial changes in the proposed requirements.

“The changes not only affect determinations of potentially covered sources but could also result in substantial changes in what some sources must do to comply with the standards and could thereby cause them to alter planned facility designs or technological control systems,” said the Jan. 8 notice. “These changes concern the addition of a determination of the best system of emission reduction for fossil fuel-fired boilers and [integrated gasification combined cycle] IGCC units; an alternative compliance option for solid fuel-fired EGUs; the treatment of certain units that had received permits to construct but for which construction had not yet commenced; the limits for natural gas-fired stationary combustion turbines; and the application of CO2 emission fees under the title V operating permit program.”

These changes are big enough that they require withdrawal of the whole proposal, not just changes in it, said EPA.

At the same time, in a separate notice of proposed rulemaking to be published in the Jan. 8 Federal Register, the EPA is issuing new proposed requirements for new fossil-fuel-fired electric generating units, which are based on different analyses from the original proposal and would establish requirements that differ significantly from the original proposal.

The April 2012 document proposed federal standards of performance for new fossil fuel-fired power plants that the EPA concluded could be met with existing technology. EPA proposed a single electricity-output-based emission standard of 1,000 pounds of CO2 per megawatt-hour of gross electrical output (1,000 lb CO2/MWh) for all new affected fossil fuel-fired power plants. This standard was based on what EPA said was the demonstrated performance of recently constructed, modern natural gas combined cycle (NGCC) units, which the EPA concluded were in wide use throughout the country and were likely to be the predominant fossil fuel-fired technology for new generation in the future.

Modeling conducted in support of that proposal predicted no new coal-fired EGUs would be constructed at least until after 2020. However, the EPA recognized that a very small number of new fossil fuel-fired utility boilers and IGCC units may be built, and if so, they could meet the proposed standard through the use of available carbon capture and storage (CCS) technology.

EPA this time separates gas and coal standards

The replacement proposed standards reflect separate determinations of the best system of emission reduction (BSER) adequately demonstrated for utility boilers and IGCC units and for natural gas-fired stationary combustion turbines. In contrast, the April 2012 proposal relied on a single standard and a single BSER determination for all new fossil fuel-fired units, something that drew a lot of criticism from the power industry by lumping coal and gas together under the same standard. In addition, the applicability requirements now proposed differ from the applicability requirements in the original proposal.

The new limit for utility boilers and IGCCs is 1,100 lb CO2/MWh, only a slight rollback from the prior proposed level. This action also proposes standards of performance for natural gas-fired stationary combustion turbines based on modern, efficient natural gas combined cycle (NGCC) technology as the BSER. The proposed emission limits for those sources are 1,000 lb CO2/MWh for larger units and 1,100 lb CO2/MWh for smaller units. At this time, the EPA said it is not proposing standards of performance for modified or reconstructed sources.

EPA said this new rule probably won’t change much what will actually get built in the power industry over the next few years.

“As explained in the Regulatory Impact Analysis (RIA) for this proposed rule, available data – including utility announcements and EIA modeling – indicate that, even in the absence of this rule, (i) existing and anticipated economic conditions mean that few, if any, solid fossil fuel-fired EGUs will be built in the foreseeable future; and (ii) electricity generators are expected to choose new generation technologies (primarily natural gas combined cycle) that would meet the proposed standards,” the agency said. “Therefore, based on the analysis presented in Chapter 5 of the RIA, the EPA projects that this proposed rule will result in negligible CO2 emission changes, quantified benefits, and costs by 2022. These projections are in line with utility announcements and Energy Information Administration (EIA) modeling that indicate that coal units built between now and 2020 would have CCS, even in the absence of this rule. However, for a variety of reasons, some companies may consider coal units that the modeling does not anticipate. Therefore, in Chapter 5 of the RIA, we also present an analysis of the project-level costs of a new coal-fired unit with partial CCS alongside the project-level costs of a new coal-fired unit without CCS.”

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.