When Cleaning Up Power Plants, Time is Money

The W.A. Parish Electric Generating Station in Thompsons, Tex.Associated Press The W.A. Parish Electric Generating Station in Thompsons, Tex.
Green: Business

New rules on pollution from coal plants will cost the American economy $175 billion to $275 billion between now and 2035, according to a new analysis from the Electric Power Research Institute, a nonprofit utility consortium. But the price can be be closer to the lower figure if the government shows flexibility in how the rules are phased in, the researchers said.

Power sector expenditures will range from $140 billion to $220 billion, according to the institute, which used computer modeling to predict effects across the economy. Those are big numbers. But the electricity industry is vast, so the estimated impact on the retail price of electricity is expected to be just 4.5 to 8 percent in 2015, the group said.

Other trends, like a big increase or drop in overall demand or a major change in the price of natural gas, could yield larger charges in cost than this. And the estimates are a national average — the rise in costs would be steeper in the Midwest and Southeast, which rely more heavily on emissions-intensive coal, the report said.

Asked whether it had a cost estimate of its own or whether it viewed the utility group’s estimates as accurate, the Environmental Protection Agency, which drafted the new rules, said that it was ordering “a series of common-sense and long overdue steps,” and that the standards were achievable and relied on existing technology.

The research institute analyzed new rules on emissions of sulfur dioxide and nitrogen oxides and mercury, the disposal of coal ash and the use of cooling water. The estimate does not factor in the rule on carbon dioxide emissions.

The analysis said that compliance costs would be driven up if all of the roughly 1,000 coal-fired power plants in the country had to meet the new rules simultaneously, which would lead to shortages of hardware and skilled labor. And some mandates could be met more cheaply if the industry had five years rather than three to comply because there are promising new technology ideas that need additional research before they can be deployed, it said.

For example, new technologies are emerging for pre-treating coal before it is burned to reduce pollution and creating activated carbon that would capture mercury before it could be emitted.

The power industry’s standard way of meeting clean water rules is to build cooling towers so that power plants do not draw in as much water from rivers and kill fish and other marine organisms. But with work, new kinds of screens could be developed that would reduce such damage without the need for the cooling, the researchers said.

Bryan Hannegan, vice president for environment and renewables at the institute, said the electric industry needed “a little bit of time for the technology to catch up.”

The possibility of extending deadlines for compliance are written into some of the pending rules, but such extensions would require the approval of the E.P.A. or the relevant state.

No matter what the cost and schedule of new pollution control requirements, the institute predicts hard times for the coal industry. With low natural gas prices, some older plants are certain to be shuttered, the study said. About 202 gigawatts of coal-fired capacity will survive no matter how the new rules are applied, but that number could be 288 gigawatts if the rules are phased in more slowly, according to the Institute’s computer projections.

The brave new world of less-polluting electricity generation is creating some hiccups, experts at the institute said. For example, as more wind turbines are added to the grid, coal-fired power plants must crank their production up and down much more rapidly to balance production with demand when the wind freshens or dies. And the pollution control equipment, which often resembles a small chemical factory, often does not perform well with rapid changes in power levels.