The U.S. Environmental Protection Agency (EPA) says in its new CO2 rule that it wants modern natural gas combined cycle (NGCC) plants used much more than they are now.
EPA Administrator Gina McCarthy announced the Obama administration’s much-anticipated Clean Power Plan proposal June 2. The proposed rule seeks to cut carbon dioxide levels from the electric power sector 30% by 2030. It calls on states to devise their own plans to meet the goals.
Several details about the EPA philosophy on CO2 reduction are fleshed out in the first 150 pages of the 645-page proposal.
“As of 2012, there was approximately 245 GW of [natural gas combined cycle] NGCC capacity in the United States, 196 GW of which was placed in service between 2000 and 2012. In 2012, the average utilization rate of U.S. NGCC capacity was 46 percent, well below the utilization rates the units are capable of achieving,” EPA said in the rule.
EPA wants to see a utilization rate of between 65% and 75% for the combined-cycle units built in the past 15 years. It also wants all the nuclear units now under construction to get built. The agency also wants to stave off 6% of nuclear retirements that might otherwise occur.
The EPA also wants a 6% heat rate improvement in coal-fired power units. EPA does not necessarily expect existing coal plants to retrofit with carbon capture and storage (CCS) technology, saying that economics or space constraints might make that impractical.
In the year 2025, the average age of the coal power unit is projected to be 49 years old, and 20% of units would be more than 60 years old, EPA notes.
EPA said in the rule proposals that it hopes various states consider becoming part of some type of CO2 emission trading market akin to either the Regional Greenhouse Gas Initiative (RGGI) or the carbon market in California.
For example, currently 10 states have market-based GHG emission programs, 38 states have renewable portfolio standards or goals, and utilities in 47 states run demand-side energy efficiency programs. Many individual companies also have significant voluntary CO2 emission reduction programs, EPA said.
Get ready for the next big acronym: BSER
The rule appears to spawn at least one new government acronym for the industry: BSER, which stands for “best system of emission reductions.”
BSER will be a key determination as states figure out ways to both reduce the “carbon intensity” of certain electric generating units as well as the “mass emissions” that result from heavy use of a power plant.
The EPA is proposing interim goals that states must begin meeting in 2020. The proposed interim goals would apply over a 2020-2029 phase-in period.
While EPA plans to have states submit a compliance plan by June 30, 2016, it recognizes that some states could need longer. The drop-dead date for all states to have submitted their plan will be June 30, 2017 or 2018 (provided the EPA extensions are granted).
Under Clean Air Act Section 111(d) if a state does not submit a “satisfactory” plan, then EPA must establish a plan for that state.
EPA is proposing that for the emission guidelines an affected electric generating unit is any fossil fuel plant that was in operation or commenced construction as of Jan. 8 2014. This makes it an “existing source.”
It’s important to note that power plants located on tribal land fall into their own special category and will likely be covered by a subsequent EPA rule for CO2 under 111(d).
The EPA is aware of four potentially affected power plants located in Indian country: the South Point Energy Center, on Fort Mojave tribal lands within Arizona; the Navajo Generating Station, on Navajo tribal lands within Arizona; the Four Corners Power Plant, on Navajo tribal lands within New Mexico; and the Bonanza Power Plant, on Ute tribal in Utah. South Point is a combined-cycle gas unit while the others are coal-fired.
On July 29 there will be a hearing on the rule in Atlanta at the Sam Nunn Atlanta Federal Center. On July 31, 2014, a public hearing will be held in Pittsburgh at the William S. Moorhead Federal Building. Hearings will also be held in Denver and Washington, D.C.