Tamar Hallerman
GHG Monitor
9/27/13
The Environmental Protection Agency proposed landmark limits on carbon emissions from future power plants late last week, designating carbon capture and storage the technology of choice for cleaning up coal units. While observers will undoubtedly debate whether the new source standards will do anything—if at all—to accelerate the deployment of CCS in the short term, the draft rule has unquestionably lifted CCS into the national debate about the country’s energy future. Here’s a look at how CCS plays into the 463-page draft rulemaking:
Unlike its previous April 2012 incarnation, EPA’s retooled Sept. 20 proposal sets separate CO2 emissions standards for coal and gas units. Depending on whether plant operators decide to measure CO2 emissions over a 12- or 84-month operating period, individual coal units would have to cap emissions at between 1,000 and 1,100 lbs CO2/MWh (compared to the average uncontrolled coal unit, which emits upwards of 1,800 lbs CO2/MWh). Gas-fired turbines, depending on their size, must also meet a CO2 emissions limit of between 1,000 and 1,100 lbs MWh over a 12-month period.
The Clean Air Act requires EPA to determine which type of compliance technology, when taking into account factors like cost, technical feasibility and size of emissions reductions, constitutes the ‘best system of emission reduction’ (BSER) for fossil units. The Clean Air Act also directs EPA to set a standard that is technology-driving. Based on those criteria, the agency said natural gas combined cycle technology fits the bill for new gas units, and the ‘partial’ capture and storage of roughly 30 to 50 percent of a plant’s emissions is the BSER technology for coal plants.
Alternatives
Coal boosters, even those who have spoken in favor of advancing CCS RD&D in the past, have been quick to argue that the rulemking as proposed would have the opposite of its intended effect on CCS, stunting development as operators switch to cheap natural gas. “As proposed, this rule would hinder efforts to develop cost-effective CCS—a critical technology for mitigating greenhouse gas emissions going forward—because it effectively prevents the building of new clean coal plants,” Edison Electric Institute President Tom Kuhn said in a statement last week. Coal advocates have instead called on EPA to issue standards that list newer, more efficient unmitigated coal plants as the BSER. “The more responsible course for the Administration is to base standards on the best-in-class technology available today,” National Mining Association President Hal Quinn said.
In its justification of the rule, EPA said that it did look at new-build coal systems utilizing supercritical and ultra-supercritical boilers and integrated gasification combined cycle technology as potential alternatives to CCS for BSER. But the agency said that while those technologies are “clearly technically feasible,” they “do not provide meaningful reductions in CO2 emissions” from new sources. “Efficiency-improvement technologies alone result in only very small reductions in CO2 emissions, especially in contrast to those achieved by the application of CCS,” the draft rulemaking states.
EPA said it also looked at ‘full’ CO2 capture above 90 percent as a potential BSER but concluded that without the side benefit of revenue from enhanced oil recovery, the levelized cost of electricity would be too expensive when compared with other energy sources like NGCC and nuclear. Instead, EPA concludes in the daft rule that ‘partial’ CCS hits the sweet spot of being “adequately demonstrated” at a “reasonable” cost while also promoting the “implementation and further development of CCS technologies.” “Partial CCS is feasible because each step in the process has been demonstrated through an extensive literature record, fossil fuel-fired industrial plants currently in commercial operation and pilot-scale fossil fuel-fired [electric generating units] currently in operation, and the progress towards completion of construction of fossil fuel-fired EGUs implementing CCS at commercial scale,” the rule states, adding that partial capture is also BSER because it offers more flexibility for coal plant operators than full capture.
Kemper, Boundary Dam Listed as Examples
EPA highlighed recent progress at four large-scale CCS demonstration projects as further evidence that CCS is being demonstrated. The draft rulemaking points to the fact that Southern Company’s Kemper County and SaskPower’s Boundary Dam facilities are both under construction and nearing completion as indicative of a clear path forward on the technology. EPA also lists Summit Power Group’s Texas Clean Energy Project (TCEP) and SCS Energy’s Hydrogen Energy California (HECA) as notable projects in advanced stages of development. “The existence and apparent ongoing viability of these projects which include CCS justify a separate BSER determination for new fossil fuel-fired utility boilers and IGCC power plants,” EPA states.
Worth noting is the fact that EPA’s draft rulemaking largely ignores the remaining two power generation-capture retrofits being overseen by the Department of Energy’s major demonstrations program. Outside of a passing mention, the draft standards all but ignore NRG Energy’s $845 million, 250 MWe CCS retrofit at its W.A. Parish power plant in Texas, which received a favorable record of decision from DOE this spring and is expected to declare financial close early next year. The proposal also mentions the Obama Administration’s flagship CCS project, FutureGen 2.0, only once throughout the course of its 463-page rulemaking.
Most of the CCS project developers, when contacted by GHG Monitor this week, shied away from speaking on the record about how their projects fit into EPA’s larger assessment of CCS. An NRG spokesman, though, said the utility has not minded having W.A. Parish fly under the radar. “We were not surprised that we were not mentioned. Our focus with the Parish demonstration is to wait until we break ground on the actual carbon capture unit in 2014 so that we can talk about what we are building rather than what we are going to do,” the spokesman said.
SCS Energy Chairman and CEO Jim Croyle said the Massachusetts development company was pleased, though, with HECA being presented as a model for a CCS project within the EPA rulemaking. “We believe converting coal, as well as other fossil fuels, to hydrogen and using full CCS in that process is the most responsible and sustainable way to utilize these vast energy reserves. Burning the hydrogen instead of the fossil fuel has enormous environmental and health benefits as well as having a beneficial effect on climate change,” Croyle said in a statement to GHG Monitor.
Southern: Kemper Not a Model
Others were not as pleased that their CCS projects were being listed as examples of the technology’s feasibility. Southern Company quickly issued a statement following the proposal’s release underscoring how the project’s location near a lignite coal mine and depleted oilfields ripe for enhanced oil recovery means that Kemper cannot be replicated everywhere. “Because the unique characteristics that make the project the right choice for Mississippi cannot be consistently replicated on a national level, the Kemper County Energy Facility should not serve as a primary basis for new emissions standards impacting all new coal-fired power plants,” the Atlanta-based utility said. After touting the project at a press conference late last week, EPA Administrator Gina McCarthy noted that proprietary gasification technology being tested at Kemper makes the facility “unique” from other potential projects.
