Originally posted on E&E Daily, Daniel Cusick, 6/7/2013
While coal consumption by U.S. electric utilities has rebounded from 2012’s historic low levels, a new analysis from SNL Financial suggests that coal will not regain its dominance among energy fuels as utilities and independent power producers gravitate toward natural gas, wind, solar and other alternate fuels to meet U.S. electricity demand.
According to SNL Energy, more than 11,600 megawatts of new coal-fired generation units are currently in the development pipeline, accounting for 3 percent of all planned capacity additions. But given the “rigors of a project advancing from announcement through construction,” SNL Energy said, the likelihood of all that generation coming online “is slim.”
Rather, 13 projects in the advanced development stage or already under construction — currently estimated at just more than 7,000 MW of capacity — are “most likely to become operable,” the researchers said. And of that, only 1,250 MW is expected to come online before 2015, when new federal regulations targeting coal plant emissions of mercury and other toxic pollutants take effect.
“The bulk of new coal capacity with an expected in-service date — 6,230 MW, or 53 percent — will come online in 2015 or later, after the standards for new electric generating units under MATS [Mercury and Air Toxics Standards] take effect,” the researchers wrote. More than 4,200 MW of those planned projects have no expected in-service date, and 2,168 MW are postponed projects “that may never get off the ground,” according to SNL.
Steve Piper, SNL Energy’s associate director of energy fundamentals, said that all new coal plants will be designed to comply with EPA’s MATS rules, but developers will face additional EPA regulations addressing water intake and cooling water discharges, rules that could further drive up costs for new plants.
CO2 regulations a ‘wild card’
A greater risk to coal plant development, he said, lies in EPA’s proposed regulation of carbon dioxide, the omnipresent greenhouse gas that scientists have linked to climate change. The agency has issued a draft rule that would cap CO2 emissions at 1,000 pounds per megawatt-hour of generation for new power plants, a proposal that has drawn fire from utilities and proponents of coal-fired power.
Piper called EPA’s carbon regulation plans a “wild card … that could potentially put a lot of these projects on the shelf temporarily or in some cases over the long term.”
Lisa Camooso Miller, a spokeswoman for the American Coalition for Clean Coal Electricity, which has advocated for new advanced coal plants, said in an e-mailed statement that “it is clear the EPA regulations are having a chilling effect on the development, of newer, cleaner and more efficient plants that the United States will need to stay globally competitive.”
She also rebutted the notion that coal is waning as fuel for electricity, saying it is “still projected to be our nation’s dominant source of electricity for decades to come.”
Among the more promising technologies for future coal plants, according to SNL’s Piper, is integrated gasification combined cycle (IGCC), one of only a few technologies that can capture CO2 from flue gases.
But construction of IGCC plants has proved to be very expensive, and only two such plants are under construction in the United States: Southern Co.’s Plant Ratcliffe in Mississippi and Duke Energy Corp.’s Edwardsport facility in Indiana. Both of those projects have been burdened by steep cost overruns, and only one, Plant Ratcliffe, plans to incorporate carbon capture and storage technology.
Other IGCC projects — in Texas, Ohio, Kentucky and California — remain in the advanced development stage but have not commenced construction, according to SNL Energy. One of those plants, known as the Texas Clean Energy Project, will deploy carbon capture technology, according to developer Summit Power Group of San Antonio.
Another Texas project spearheaded by NRG Energy Inc. will seek to retrofit an existing coal plant near Houston with carbon capture technology, but it will not use IGCC (ClimateWire). In Illinois, a coalition of investors along with the Department of Energy is working to complete FutureGen 2.0, which will use oxy-combustion technology combined with carbon capture and storage. That plant is projected to come online in 2017 (ClimateWire).