Energy

EPA Reg Shutters FOUR TIMES More Coal Power Than Agency Initially Predicted

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Michael Bastasch Energy Editor
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The Environmental Protection Agency’s (EPA) initial projections on coal power vastly underestimated how much coal-fired power would be shuttered by its mercury regulation, according to federal data.

Actual capacity retirements from coal-fired power plants were more than four times greater than EPA initially projected. Newly-released Energy Department data shows 20 gigawatts of coal power have retired, compared to the 4.7 gigawatts projected by EPA.

“Coal-fired generating capacity in the United States dropped from 299 gigawatts (GW) at the end of 2014 to 276 GW as of April 2016,” according to the Energy Information Administration (EIA).

EIA attributed coal’s demise “to a mix of competitive pressure from low natural gas prices and the costs and technical challenges of environmental compliance measures.”

EPA’s mercury regulation, called MATS, is one of the most contentious and costly rules ever imposed under the Clean Air Act. The coal industry claimed MATS would force power plants to close down, but EPA said only a fraction would close and these would be outweighed by the public health benefits.

EPA’s initial regulatory analysis predicted 4.7 gigawatts of coal-fired power capacity would be shuttered as a result of MATS. EPA said “about 4.7 GW (less than 2 percent) of coal-fired capacity is projected to be uneconomic to maintain by 2015.”

Their estimate took into account “various regional factors (e.g., other available capacity and fuel prices) and unit attributes (e.g., efficiency and age)” and many of the projected “uneconomic” generators were “older, smaller, and less frequently used.”

To justify turning all these coal plants into “uneconomic” assets, EPA said the rule would save thousands of lives and prevent 100,000 asthma attacks every year. The agency said the monetary value of these health benefits were as high as $90 billion.

EPA estimated MATS would only cost $9.6 billion.

EIA data shows nearly 20 gigawatts of coal-fired power was shuttered between January 2015 and April 2016 — utilities had until April 2015 to comply with MATS, and some got a year-long extension.

“Twenty-six percent of those retirements occurred in April 2015, the MATS rule’s initial compliance date,” EIA noted. “Most remaining coal plants applied for and received one-year extensions that allowed them to operate until April 2016 while developing compliance strategies.”

“If a coal unit did not meet MATS requirements by then, it had to either retire, switch to another fuel, or cease operation,” EIA reported. “A few plants, totaling 2.3 GW, received additional one-year extensions, giving them until April 2017 to comply. About 5.6 GW of coal capacity fuel switched primarily to natural gas.”

EIA estimates utilities spent at least $6.1 billion complying with MATS and other rules between 2014 and 2016. Most coal capacity was kept online through installing costly pollution controls, according to EIA.

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