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EPA's Winding Road

How we got here and what to expect.

Fortnightly Magazine - November 2011

that will be allowed in total. However, with retirement of coal plants due to costs incurred under other programs, we likely won’t see lower levels of SO 2 and NO x, just the need for less control equipment.

The Ventyx Spring 2011 Reference Case modeled the electric industry under current finalized regulations, including the Transport Rule, RGGI, and AB32, but didn’t include the newly proposed EPA regulations. Additionally, the Spring 2011 Reference Case included a scenario that implemented a national CO 2 cap-and-trade program beginning in 2015. To better understand how newly proposed EPA regulations would affect coal burn and CO 2 emissions, additional modeling analyzed an EPA case where significant coal reductions occurred from 2013 to 2017 due to impending regulations.

Figures 5 and 6 show the comparison of coal use and CO 2 emissions under the three scenarios. In Figure 5, the reduction in coal use declines much more rapidly with the heavy retirement due to new EPA regulations. With federal carbon legislation, the retirements are more gradual in the early years, but increase rapidly past 2020 CO 2 prices begin to increase dramatically to meet the standard. However, the difference in CO 2 emissions between the cases tells a different story, as shown in Figure 6. With significant CO 2 prices, there’s incentive to develop carbon capture and sequestration technology.

To meet a national CO 2 cap, many coal plants continue to run, but reduce their emissions through control technology. In both cases, reductions in coal generation are offset with new gas generation, which is still a significant contributor to greenhouse gas emissions. Even with a 55 GW reduction in the U.S. coal fleet, emissions drop in the early years, but then continue to grow. To reach significant CO 2 reductions, other measures need to be taken.

So, what are we to make of this and what can we expect in terms of future regulation and legislation? Will our leaders in government return to cap-and-trade mechanisms? There are too many variables in this equation to calculate a probable scenario. One thing is certain, however; the trend toward cleaner and “greener” fuel sources will move forward, regardless of the regulatory scheme put in place.

 

Endnotes:

1. “Should America Follow Europe’s Lead on Energy?” Jennifer Morgan, World Resources Institute, July 12, 2011.

2. “Acid Rain and Related Programs: 2009 Highlights,” EPA, Dec. 20, 2010.

3. “NOX Budget Trading Program 2008 Progress Reports,” EPA, Oct. 08, 2009.

4. “EPA’s NOX Reduction Program and Clean Air Interstate Rule,” EPA, Feb. 02, 2011.

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