NSR rules could complicate heat rate improvements for CO2, BV official says

Although state compliance plans for the Environmental Protection Agency’s (EPA) Clean Power Plan won’t be due until 2016, electric generators should start consulting with their state regulators now, a Black & Veatch official suggests.

BV Associated Vice President for Environmental Services and Energy Andy Byers stresses early planning in a recent commentary in the firm’s online newsletter for July.

Byers also cautioned that some steps to curtail carbon emissions could also complicate coal plant compliance with other EPA standards, like New Source Review.

In June EPA announced its proposal to cut carbon dioxide emissions 30% below 2005 levels by 2030. The public comment period is scheduled to end Oct. 16 although an industry group has already asked for an additional 60 days.

 After receiving public comments, EPA will issue its final rule in June 2015. The states will then have 13 months to devise their own implementation plans before submitting them to the EPA by July 2016, with the possibility of one- or two-year extensions in certain circumstances.

“Although state plans will not be ready until 2016, utilities can begin looking at these options – at least those which they have some control over – and assess how they can be applied within their portfolios to reduce overall carbon emissions,” Byers said.

EPA has given the states four so-called “building blocks” that can be used to develop state CO2 control programs. One of them involves simply improving the fuel efficiency or heat rates of coal-fired power plants.

“Utilities may start by looking at heat rate improvements to their coal-fired units, but will need to be aware that there could be a catch. Another Clean Air Act program called New Source Review could be triggered if the improvements result in increased emissions of other pollutants such as sulfur dioxide and oxides of nitrogen. This could ultimately require the utility make additional costly emission control investments,” Byers said.

“Since the first compliance period is from 2020 through 2029, with the ultimate requirements due in 2030, there is a fair amount of time to implement planning and solutions, but utilities need to be in the game now and begin working with their state regulators,” Byers said.

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.