It has already started in Colorado… we shall wait and see. I am glad to see the EPA has a new regulative arm with the Obama Administration… maybe something good will come out of the democrats “Iconic” figure.
Congressional Republicans are going after Obama’s EPA with both barrels blazing. Everyone who pays attention to politics knows that by now. What is somewhat less widely understood is why.
Here’s what’s at stake: new and emerging EPA regulations are going to force a huge wave of coal-plant retirements.
I’ve written quite a bit about this if you want background. The regulations will ratchet down standards for sulfur dioxide, nitrogen oxides, mercury, and other toxics, possibly restrict coal ash for the first time, and possibly require cooling towers (so that wastewater discharge doesn’t fry river and stream ecosystems). Oh, and there’s also those pending greenhouse gas rules, though their influence will be somewhat less in the short term.
A couple of new reports have filled out more details on these coal-plant closures. I’ll take a closer look at one of them, but first it’s important to note that this isn’t some theoretical, years-out possibility. It’s already underway. Here’s a sampling of recent headlines:
I could go on.
Two new reports investigate just how big the wave of closures will be. One is from the investment bank FBR Capital Markets, which Reuters covers today. Another is from consultancy The Brattle Group. So as not to overwhelm with wonk, I’ll restrict my focus to the latter.
Brattle’s report digs into the upgrade-or-retire decision every coal plant in the U.S. will soon face, using a “retirement screening tool,” and concludes that …
… emerging EPA regulations on air quality and water for coal-fired power plants could result in over 50,000 MW of coal plant retirements and require an investment of up to $180 billion for remaining plants to comply with the likely mandates.
Both those numbers go up substantially — retirements by 11-12 GW and needed investment by $30-50 billion — if EPA requires cooling towers in addition to smokestack scrubbers. (This is consistent with the FBR Capital Markets report, which finds a total of up to 70,000 MW of coal on the line.)
By 2020, the authors say, coal plant closures will reduce coal demand by about 15 percent, increase natural gas demand by about 10 percent, and (assuming the coal is replaced by gas) reduce CO2 emissions by 150 million tons.
Those are the top line conclusions. Here are a few other interesting aspects:
The oldest and dirtiest coal plants face the most risk, but not just the oldest and dirtiest. In fact, the study finds that about a third of the closures will be plants under 40 years old and larger than 500 MW.
Almost all the retirements will take place at merchant coal plants, which sell power into competitive wholesale markets, rather than at regulated-utility plants, which sell power to retail customers. As a consequence, the effects will be concentrated in the Southeast (SERC), the mid-Atlantic (RFC), and Texas (ERCOT). Here’s a map: