Wednesday, August 31, 2011

EPA Regulations & Coal

The U.S. Environmental Protection Agency (EPA) has proposed a series of new air, water and solid waste regulations that particularly will impact coal-fired power generation plants.

Owners of electric generation assets are confronting a series of decisions on how to optimize the value of their existing assets in the face of regulatory uncertainty. These new regulations will impact the economic viability of these assets. In many cases, the prospect of early retirement might be a better decision than facing the cost of environmental retrofits.

The environmental issues most coal plants face fall into two categories:

1.Near-term air quality regulations that are poised to take effect in the next five years, and

2.Upgrades or conversions of water and waste management systems by the end of the decade, as well as lingering uncertainty related to potential future greenhouse gas (GHG) regulations.

Here is a bullet list of new EPA regulations affecting coal generation assets:

• Utility MACT (Maximum Achievable Control Technology) rules to reduce emissions of hazardous air pollutants such as mercury,

• Clean Air Transport Rule to reduce ozone and particulate levels via control of nitrogen oxides (NOX) and sulfur dioxide (SO2) emissions,

• Regional haze standards to improve visibility via reduction in NOX, SO2 and particulates;

• National Ambient Air Quality Standards (NAAQS) with stricter revised standards for NOX, SO2, carbon monoxide, ozone and fine particulates,

• Designation of combustion residues (ash) as either solid or hazardous waste,

• Cooling water intake design and wastewater discharge standards, and

• Greenhouse gas cap-and-trade: “if-and-when.”

(Electric Light & Power, Jul/Aug 2011)

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