Report: EPA regulations to accelerate coal plant shutdowns

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Michael Bastasch DCNF Managing Editor
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Coal-fired power plants may be around for a while — there are just going to be a lot fewer of them, according to federal government data.

Hundreds of coal plants have been slated for retirement across the country and more even more coal plants will be shuttered as pending environmental regulations are implemented.

The Energy Information Administration (EIA) reports that 60 gigawatts of coal-fired capacity will be shuttered by 2020. Ninety percent of this coal capacity retirements will occur by 2016 — the date that new Environmental Protection Agency regulations are set to take effect. Power operators already took more than 10 gigawatts coal power offline in 2012.

The EIA’s Mercury and Air Toxics Standards requires significant reductions of of mercury emissions, acid gases and toxic metals by 2015, though this deadline can be extended for certain plants. Coal plants would have to install flue gas desulfurization equipment or dry sorbent-injection systems or be retired.

The EPA predicts that coal power generation will increase slightly over the next few years as natural gas prices increase and nuclear power plants are retired, but this will come from more intensive coal use from existing capacity and not from new coal plants. After 2020, however, coal generation flattens out “because more coal-fired capacity is retired and fewer new coal plants are built.”

U.S. coal-fired generating capacity will fall from 310 gigawatts in 2012 to 262 gigawatts in 2040, according to EIA — a 15 percent decrease in the country’s coal-fired capacity.

Despite coal’s somewhat dismal outlook, the extreme cold and snowfall that has hit the country this winter has forced power operators to turn back to coal as natural gas prices surged to four-year highs.

Coal’s share of energy production might climb up to 40.3 percent this year, reports Bloomberg, up from 39 percent last year. With the U.S. on track to have its coldest winter in three decades, some are saying coal power is here to stay.

“The idea of coal disappearing is not an effective climate change policy,” John Thompson, an analyst at the Clean Air Task Force told Bloomberg News. “Coal use is growing.”

Natural gas prices are up more than 50 percent from last year while coal prices have fallen by 1.9 percent over the same period. This makes burning coal much more profitable. On average, natural gas plants can make $3.04 of profit per megawatt-hour, based on prices from March, while coal plants can reel in $31.58 of profit per megawatt-hour.

The coal industry has argued that this winter demonstrates the dangers of federal policy making the country over-reliant on one fuel source — natural gas.

“This year’s historically cold winter has served as a crystal ball into our future, revealing the energy cost and electric reliability threats posed by the Obama Administration’s overreliance on a more narrow fuel source portfolio that excludes the use of coal,” said Laura Sheehan, spokeswoman for the American Coalition for Clean Coal Electricity.

Coal may have been able to come to the rescue this winter as natural gas became too costly and gas-fired power plants failed due to cold weather. But EPA regulations are going to increasingly take larger, more efficient coal plants offline.

“Units that retired in 2010, 2011 or 2012 were small, with an average size of 97 megawatts … and inefficient,” EIA notes. “In contrast, units scheduled for retirement over the next 10 years are larger and more efficient: at 145 MW, the average size is 50 percent larger than recent retirements.”

Sheehan says that the public deserves answers “from President Obama and EPA Administrator McCarthy about why they are pursuing a politically motivated agenda that undermines Americans’ access to affordable, reliable energy at the expense of family budgets and businesses’ bottom lines.”

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