US EPA’s plan for interstate smog could force even more early coal withdrawals
In 2011, American Electric Power Co.’s 2,900 MW John E. Amos coal-fired power plant completed a major pollution control project started in 2004. Existing coal-fired plants without the same emissions controls could be forced to install them or retire earlier than expected. foreseen.
With the U.S. Environmental Protection Agency’s climate authority on the nation’s electricity sector in legal limbo, the Biden administration in March unveiled an interstate smog pollution plan that is expected to result in an additional 18 GW of coal-fired power plant retirements by 2030.
This would rival the nearly 20 GW of coal-fired plants that were withdrawn between January 2015 and April 2016 to comply with the Obama-era mercury and air toxics standards rulea disputed Clean Air Act settlement finalized in 2012 and narrowly upheld by the U.S. Supreme Court.
As the conservative-dominated high court considers the scope of the EPA’s authority over greenhouse gases under a rarely invoked section of the Clean Air Act, the latest interstate plan of the EPA’s Air Pollution Report, released under a more commonly used section of the law, could present a simple opportunity to accelerate the move away from coal-fired electricity.
Power companies are already downplaying the impact of the proposal, citing plans to retire most of their potentially affected coal units by the time the plan’s pollution control requirements take effect.
But an analysis of data from S&P Global Market Intelligence shows that the EPA’s proposal, if finalized as written, could prompt some of the nation’s largest coal capacity owners to accelerate their current retirement plans. Comments on the plan are due June 6.
The EPA’s interstate air pollution plan comes as the agency seeks to address pollution from existing fossil fuel power plants through an array of air and water regulations, including a separate Clean Water Act rule targeting coal ash pollution.
“I think there’s a significant portion of the coal fleet that’s in a pretty precarious position,” Dallas Burtraw, senior researcher at independent research organization Resources for the Future, said in a recent interview.
EPA proposal targets nitrogen oxide emissions
The EPA’s plan, to be released under the Clean Air Act’s “good neighbor” provision, aims to reduce nitrogen oxide or NOx emissions from the electricity sector in 26 states to 29% below current levels by 2026. The layout was designed to tackle harmful NOx. emissions that drift across state lines and interfere with the ability of downwind states to meet the EPA’s National Ambient Air Quality Standards, or NAAQS, for ground-level ozone.
NOx pollution is produced by automobiles, power plants and other industrial facilities. Ground-level ozone, commonly referred to as smog, is typically worse during the summer months when NOx emissions react with volatile organic compounds in the presence of sunlight. In 2015, the EPA tightened the NAAQS for ozone to 70 parts per billion from the previous threshold of 75 parts per billion set in 2008.
By requiring states to do more to comply with the 2015 standard, the EPA estimated its latest plan would avert about 2,000 hospital and ER visits and 1,000 premature deaths per year from the year of compliance 2026.
At the heart of the EPA’s March proposal are statewide NOx emissions budgets that would build on an existing cap and trade framework. According to the EPA, the new budgets would effectively require coal-fired units rated 100 MW or more without selective catalytic reduction, or SCR, to install the technology by 2027, find other means of compliance, or withdraw.
SCR technology, which has been installed on nearly every 100MW or larger pulverized coal unit built over the past 30 years, can achieve NOx removal efficiencies of up to 90% when operating at full load. ability. The technology uses a chemical reaction to break down the NOx naturally present in the flue gas streams when coal is burned for power generation.
The EPA proposal would also set a daily NOx emission rate of 0.14 lb/MMBtu for coal-fired facilities during the summer ozone season, thereby preventing plant owners from buying allowances. emission instead of installing SCR controls or running existing SCR equipment at full throttle.
Using its Integrated Planning Model, a tool designed to model the impact of various environmental policies, the EPA projected that its SCR and relief emission rate requirements would result in an additional increase of 18 GW of coal retirements by 2030 as affected units come into full compliance.
Utilities cite existing pension plans
The potential impact of the proposal on individual businesses is unclear. When asked to comment, the country’s major owners of non-SCR coal-fired capacity pointed to coal exit plans that coincide with major investments in clean energy.
However, the owners have announced their intention to retire only 55% of the roughly 40% of coal-fired capacity in the United States that does not have SCR controls, with an average retirement year of 2030, according to data from S&P Global Market. Intelligence.
Berkshire Hathaway Energy, the main owner of uncontrolled coal-fired SCR capacity, said it plans to retire 16 of its coal-fired facilities by 2030. The Berkshire Hathaway Inc. subsidiary said it plans to retire its 14 remaining coal-fired power plants before 2050. .
“The current proposal focuses on a select portion of our overall service territory,” Berkshire Hathaway Energy spokesman TJ Page said in an email. Page said the company will review the need for additional emissions controls on an individual basis.
NRG Energy Inc., which ranks second in coal-fired capacity without SCR controls, said the company announced the removal of three potentially affected coal-fired plants long before the EPA unveiled its proposal. “NRG is and will continue to operate in compliance with all permit requirements for our factories,” NRG spokeswoman Patricia Hammond said in an email.
Xcel Energy Inc. has the third-largest share of non-SCR-controlled coal-fired capacity. The company aims to reduce carbon emissions by 80% by 2030 compared to 2005 levels.
“At this time, there are no changes to our current retirement plans for our facilities and those potentially affected by the proposed rule,” Xcel Energy spokeswoman Lacey Nygard said in an email. mail. “Under approved plans, we will phase out five coal units by 2027 and have proposed plans to phase out coal completely by 2034.”
All of Ameren Corp.’s roughly 5,000 MW of coal-fired capacity. do not have SCR controls. The company presented a net zero plan by 2050 in February which still calls for the operation of two units at its 2,464 MW power station in Labadie until 2042.
“Under our current generation plan, by the time the EPA plan potentially takes effect in 2027, Ameren would have retired more than a third of its current capacity to coal,” said Ajay Arora, director of the development of the company’s renewable energies. statement.
Vistra Corp., fifth on the list of capacity lacking SCR controls, said it plans to retire most of its coal fleet by the end of 2027, with three plants due to retire this year. One of the company’s two remaining coal-fired power plants with no retirement date uses SCR technology.
“We are investigating compliance options for the other plant,” Vistra spokeswoman Meranda Cohn said in an email.
“It’s not the first shoe”
The retirement picture could be further clouded by a final coal ash rule that requires coal-fired power plants to install flue gas pollution controls by the end of 2025 or, alternatively, to commit to retiring by the end of 2028.
“There are several shoes that will fall, and this is not the first shoe”, Burtraw’s Resources for the Future spoke about the EPA’s interstate plan on air pollution.
As the development of the EPA’s interstate smog regulations progresses, environmental groups will focus on addressing public health concerns and potential loopholes for downwind states, Hayden Hashimoto said. , counsel for the Air Quality Task Force.
Hashimoto said the environmental community is particularly pleased with the EPA’s proposal to set relief emission rates for coal-fired units during the summer ozone season, citing environmental justice concerns for gated communities. .
“The backstop is important to us in the sense that it would allow these units to maintain their controls, but also in the sense that environmental groups are generally concerned about trade programs,” Hashimoto said. “From an environmental justice perspective, I think we would really prefer to see that at least limited to some extent.”
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