EPA makes concessions on carbon capture requirement for new coal plants

To be published in the Oct. 23 Federal Register is the U.S. Environmental Protection Agency’s final rule, to be effective that day, establishing greenhouse gas emissions standards for new power plants.

While the new plant rule hasn’t gotten the white-hot attention that the final Clean Power Plan for existing power plants, also to be published on Oct. 23, has gotten, the rule for new power plants is controversial. Proponents of coal-fired power say that a provision that requires carbon capture and storage (CCS) for new coal-fired plants is an effective ban on such plants for the time being, since cost-effective CO2-control technology that Wall Street lenders will actually be willing to finance is at least 10 years away.

The Federal Register on Oct. 22 released pre-publication versions of both final rules, with the rule on new power plants coming in at 767 pages in length.

Said the new plant rule: “The Environmental Protection Agency (EPA) is finalizing new source performance standards (NSPS) under Clean Air Act (CAA) section 111(b) that, for the first time, will establish standards for emissions of carbon dioxide (CO2) for newly constructed, modified, and reconstructed affected fossil fuel-fired electric utility generating units (EGUs). This action establishes separate standards of performance for fossil fuel-fired electric utility steam generating units and fossil fuel-fired stationary combustion turbines. This action also addresses related permitting and reporting issues. In a separate action, under CAA section 111(d), the EPA is issuing final emission guidelines for states to use in developing plans to limit CO2 emissions from existing fossil fuel-fired EGUs.”

In June 2013, in conjunction with the announcement of his Climate Action Plan (CAP), President Barack Obama issued a Presidential Memorandum directing the EPA to issue a proposal to address carbon pollution from new power plants by Sept. 30, 2013, and to issue “standards, regulations, or guidelines, as appropriate, which address carbon pollution from modified, reconstructed, and existing power plants.” In September 2013, the EPA issued proposed carbon pollution standards for newly constructed fossil fuel-fired power plants. The proposal was published in the Federal Register on Jan. 8, 2014.

In that proposal, the EPA proposed to limit emissions of CO2 from newly constructed fossil fuel-fired electric utility steam generating units and newly constructed natural gas-fired stationary combustion turbines.

The EPA subsequently issued a Notice of Data Availability (NODA) in which the EPA solicited comment on its initial interpretation of provisions in the Energy Policy Act of 2005 (EPAct05) and associated provisions in the Internal Revenue Code (IRC) and also solicited comment on a companion Technical Support Document (TSD) that addressed these provisions’ relationship to the factual record supporting the proposed rule.

In June 2014, the EPA proposed standards of performance, also pursuant to CAA section 111(b), to limit emissions of CO2 from modified and reconstructed fossil fuel-fired electric utility steam generating units and natural gas-fired stationary combustion turbines. EPA proposed standards of performance for: (1) modified fossil fuel-fired steam generating units, (2) modified natural gas-fired stationary combustion turbines, (3) reconstructed fossil fuel-fired steam generating units, and (4) reconstructed natural gas-fired stationary combustion turbines.

In this Oct. 23 action, the EPA is issuing final standards of performance to limit emissions of GHG pollution manifested as CO2 from newly constructed, modified, and reconstructed fossil fuelfired electric utility steam generating units (i.e., utility boilers and integrated gasification combined cycle (IGCC) units) and from newly constructed and reconstructed stationary combustion turbines. These standards reflect the degree of emission limitation achievable through the application of the best system of emission reduction (BSER) that the EPA has determined has been adequately demonstrated for each type of unit. 

The final standards for newly constructed fossil fuel-fired EGUs apply to those sources that commenced construction on or after the date of publication of the proposed standards, Jan. 8, 2014. The final standards for modified and reconstructed fossil fuel-fired EGUs apply to those sources that modify or reconstruct on or after the date of publication of the proposed standards, June 18, 2014.

EPA says it made concessions to make CCS requirement more practical

“This action establishes standards of performance for newly constructed fossil fuel-fired steam generating units based on the performance of a new highly efficient [supercritical pulverized coal] EGU implementing post-combustion partial carbon capture and storage (CCS) technology, which the EPA determines to be the BSER for these sources,” said the final rule. “After consideration of a wide range of comments, technical input received on the availability, technical feasibility, and cost of CCS implementation, and publicly available information about projects that are implementing or planning to implement CCS, the EPA confirms its proposed determination that CCS technology is available and technically feasible to implement at fossil fuel-fired steam generating units.

“However, the EPA’s final standard reflects the consideration of legitimate concerns regarding the cost to implement available CCS technology on a new steam generating unit. Accordingly, the EPA is finalizing an emission standard for newly constructed fossil fuel-fired steam generating units at 1,400 lb CO2/MWh-g, a level that is less stringent than the proposed limitation of 1,100 lb CO2/MWh-g. This final standard reflects our identification of the BSER for such units to be a lower level of partial CCS than we identified as the basis of the proposed standards – one that we conclude better represents the requirement that the BSER be implementable at reasonable cost.

“The EPA proposed that the BSER for newly constructed steam generating EGUs was highly efficient new generating technology (i.e., a supercritical utility boiler or IGCC unit) implementing partial CCS technology to achieve CO2 emission reductions resulting in an emission limit of 1,100 lb CO2/MWh-g. The BSER for newly constructed steam generating EGUs in the final rule is very similar to that in the January 2014 proposal.

“In this final action, the EPA finds that a highly efficient new supercritical pulverized coal (SCPC) utility boiler EGU implementing partial CCS to the degree necessary to achieve an emission of 1,400 lb CO2/MWh-g is the BSER. Contrary to the January 2014 proposal, the EPA finds that IGCC technology – either with natural gas co-firing or implementing partial CCS – is not part of the BSER, but recognizes that IGCC technology can serve as an alternative method of compliance.

“The EPA finds that a highly efficient SCPC implementing partial CCS is the BSER because CCS technology has been demonstrated to be technically feasible and is in use or under construction in various industrial sectors, including the power generation sector. For example, the Boundary Dam Unit #3 CCS project in Saskatchewan, Canada is a full-scale, fully integrated CCS project that is currently operating and is designed to capture more than 90 percent of the CO2 from the lignite-fired boiler.

“A newly constructed, highly efficient SCPC utility boiler burning bituminous coal will be able to meet this final standard of performance by capturing and storing approximately 16 percent of the CO2 produced from the facility. A newly constructed, highly efficient SCPC utility boiler burning subbituminous coal or dried lignite will be able to meet this final standard of performance by capturing and storing approximately 23 percent of the CO2 produced from the facility.

“As an alternative compliance option, utilities and project developers will also be able to construct new steam generating units (both utility boilers and IGCC units) that meet the final standard of performance by co-firing with natural gas. This final standard of performance for newly constructed fossil fuel-fired steam generating units provides a clear and achievable path forward for the construction of such sources while addressing GHG emissions and supporting technological innovation.

“The standard of 1,400 lb CO2/MWh-g is achievable by fossil fuel-fired steam generating units for all fuel types, under a wide range of conditions, and throughout the United States. We note that identifying a highly efficient new SCPC EGU implementing partial CCS as the BSER provides a path forward for new fossil fuel-fired steam generation in the current market context. Numerous studies have predicted that few new fossil fuel-fired steam generating units will be constructed in the future. These analyses identify a range of factors unrelated to this rulemaking, including low electricity demand growth, highly competitive natural gas prices, and increases in the supply of renewable energy. The EPA recognizes that, in certain circumstances, there may be interest in building fossil fuelfired steam generating units despite these market conditions. In particular, utilities and project developers may build new fossil fuel-fired steam generating EGUs in order to achieve or maintain fuel diversity within generating fleets, as a hedge against the possibility of natural gas prices far exceeding projections, or to co-produce both power and chemicals, including capturing CO2 for use in enhanced oil recovery (EOR) projects.

“As regulatory history has shown, identifying a new highly efficient SCPC EGU implementing partial CCS as the BSER in this rule is likely to further boost research and development in CCS technologies, making the implementation even more efficacious and cost-effective, while providing a competitive, low emission future for fossil fuel-fired steam generation.

“The EPA is also issuing final standards for steam generating units that implement ‘large modifications,’ (i.e., modifications resulting in an increase in hourly CO2 emissions of more than 10 percent when compared to the source’s highest hourly emissions in the previous 5 years). The EPA is not issuing final standards, at this time, for steam generating units that implement “small modifications” (i.e., modifications resulting in an increase in hourly CO2 emissions of less than or equal to 10 percent when compared to the source’s highest hourly emissions in the previous 5 years).”

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.