Santee Cooper blog

On April 13, the Environmental Protection Agency proposed a “new source performance standard” of 1,000 pounds of carbon dioxide per megawatt-hour for base load power plants, including coal and natural gas. Any power plant coming on line after April 2013 must meet this number out of the stack. A new natural gas plant can meet this standard with room to spare, but any new coal-fired power plant built now or for the foreseeable future will not be able to meet this standard without incredibly costly add-on controls.

The best performing coal plants can do no better than about 1,800 lbs. CO2/MWh. Engineers know there is no way to get it much lower without something called “carbon capture and sequestration.” This process, which is still untested at a large-scale commercial level, captures the CO2 at the stack and either injects it deep underground or transports it (via a pipeline that would need to be permitted and built) to a place where it can be injected underground.

The problem with this process is cost — up to a 40 percent cost adder to existing power cost. Coal-fired power plants technically could still be built if the EPA finalizes this rule. But no utility in their right business mind would do so because of the high cost of controlling the CO2. And that same high cost would drive power bills out of sight for customers.

So, goodbye coal — at least until large-scale carbon capture and sequestration becomes a commercially viable option.

Right now, few people care. Natural gas prices are at, or near, all-time lows because gas that was once considered non-recoverable due to high drilling costs can now be acquired through a process call “fracturing.” Gas is now so abundant; it is half the cost of coal, thus there is no business case to construct a coal-fired power plant at this time – so there is a general lack of serious concern on EPA regulating new coal plants out of existence.

Only time will tell if EPA is right or wrong on directing America’s energy future away from coal. The concern is if natural gas prices go up — and if history serves, they certainly will — we won’t be able to fall back on vast reserves of coal to keep energy costs reasonable and the economy churning.

UPDATE: A study released last week by the University of California’s Center for Energy and Environmental Economics says the EPA’s carbon rule might affect more natural-gas plants than previously estimated:

We find that no coal units would comply with the annual target without future innovation in carbon capture and storage. While natural gas units designed to meet peak demand are exempt from the rule, we find that few of them would comply on an annual basis: only 10 percent of the simple-cycle gas turbine units that commenced operating between 2006 and 2010 would meet the target. The baseload natural gas units that would be subject to the rule — i.e., combined-cycle gas turbine (CCGT) units — have a significantly higher level of compliance. The EPA reports that 95 percent of these units first operating between 2006 and 2010 would meet the target, and we find a similar percentage when looking at predicted emissions based on power plant heat rates. Yet we find a lower number at 84 percent based on actual emissions and self-reported generation. We also predict the emission rates of CCGT units that are planned for construction through 2017: only 71 percent of these units would meet the target because of a trend toward smaller capacity.

Read the full study here.