Climate change – heat waves, water shortages, and reduced flexibility – poses huge risks for electric utility infrastructure.
A Multi-Pollutant Strategy
An integrated approach could prove more effective for controlling emissions.
the largest remaining identified source of mercury emissions. 2 Subsequent analysis showed that although there were issues related to how well mercury controls would work across the fleet of coal-fired generation units, these controls were not likely to be inordinately expensive. Most recently, EPA provided Congress with analysis of climate-change legislation in 2007 and 2008, including the Lieberman-Warner Climate Security Act of 2008 (S.2191) and the Bingaman-Specter Low Carbon Economy Act of 2007 (S.1766). 3 These analyses found the power sector to be the greatest source of emission reductions to achieve the goals of economy-wide CO 2.
Multi-Pollutant Control Efforts
The Clean Air Power Initiative: The Clean Air Power Initiative (CAPI), a stakeholder process initiated in 1995, was the first concerted effort to pursue an integrated regulatory strategy to address electric power generators’ emissions of SO 2, NOx, and mercury over a 15-year planning horizon. The effort recognized that CO 2 reductions also were important, but too premature to include at this juncture.
In a 1996 paper, EPA expressed its interest in “reinventing its regulatory approach to reduce the number, administrative complexity and cost of its requirements while improving the likelihood of achieving environmental results.” 4 CAPI arose from the intersection of the increasing number of regulations the power sector could face under the CAA and the corresponding transition towards more competitive power markets.
CAPI brought together stakeholders from industry, states and environmental groups. EPA analyzed emission reductions and costs resulting from six different national cap-and-trade scenarios to reduce SO 2 and NOx, and also did some limited analysis of mercury controls. Scenarios set caps beginning nine years out from 1996, with the tightest SO 2 cap at 50 percent below Title IV, and a summer NO x cap based on 0.15 to 0.25 lbs/MMBtu (56 to 69 percent below 2000 summertime NOx emissions). 5 (Alternative scenarios analyzed SO 2 caps five years later at 50 to 60 percent below Title IV.) The analyses found reductions in 2010 on the order of 54-67 percent from base-case levels for summer NOx and 27-41 percent for annual SO 2. Costs ranged from $1.7 billion to $3.8 billion in 2005 and $3.8 billion to $6.5 billion in 2010 (all dollar values are expressed in 2007 dollars for comparability). 6 EPA also analyzed a traditional command-and-control approach for these pollutants, finding costs to be nearly twice that of the cap-and-trade scenario.
CAPI modeling showed that national trading and banking approaches for annual SO 2 and seasonal NOx could provide significant reductions throughout the country, with the greatest reductions generally occurring in areas of highest emissions. 7 However, without a regulatory driver for additional controls in 1996, the process wound down.
In a novel turn of events, in 1998 EPA entered into a settlement agreement that required additional multi-pollutant analysis regarding the mercury listing determination. EPA produced a report in March 1999 entitled “Analysis of Emission Reduction Options for the Electric Power Industry” that examined a number of hypothetical options for further SO 2, mercury, and CO 2 emission reductions in conjunction with the NOx reduction