Whether in the form of a carbon tax or cap-and-trade regime, climate-change policy is coming and will have a profound effect on electric suppliers and consumers. EPRI studied the effects of high...
Planning a Fossil Teardown
Decommissioning and remediation of coal- and oil-fired plants.
a viable power source and will drive additional plant closures.
An Associated Press survey of 55 power plant operators concluded that more than 32 power plants—mostly coal-fired—will be forced to shut down, and another 36 “might have to close” as a result of these new federal air pollution initiatives. Ultimately, owners of many of the country’s oldest coal-fired plants likely will conclude that it’s cheaper to retire their plants than to implement the costly equipment retrofits or switch to lower sulfur coal or oil.
Shuttering power plants will impact the host communities in ways that go beyond potential energy shortages, because such plants often are among the community’s largest real property taxpayers and employers. Although frequently built on cheap land in the 1940s and 1950s well outside of town, the plants now might be encircled by their communities, increasing the pressure to repurpose such plants, or to demolish and redevelop them. Once they make the decision to close or demolish such plants, owners and operators face several issues when engaging with the regulatory agencies and community stakeholders.
The first step is to assemble an experienced project team.
The owner’s internal project personnel should include management representatives and individuals experienced in project construction and procurement, as well as internal legal regulatory resources who can address the issue of recovery of costs through rates. Other internal team members should include individuals with in-depth knowledge of the facility’s historical environmental issues, spill events, storage tank matters, regulatory permits, and asbestos and lead abatement. Depending on the facility’s location and site features, the team should include internal personnel who are knowledgeable about diverse matters such as abandoning cooling water intake structures, remediation of rail sidings and coal handling and storage systems, managing solid and hazardous wastes, assessing the potential for construction and demolition processes to impact existing storm-water management permits and systems, inventorying components and materials with potential salvage value, and identifying potential real estate easement issues. Because many facilities are situated near sources of water, there might be coastal zone management and riparian issues, and even navigational requirements related to stack lights. Finally, plant decommissioning, demolition and redevelopment might require a public outreach team capable of responding to multiple stakeholders, including local political leaders, neighborhood groups and the media.
Many owners facing plant decommissioning will supplement their internal resources with an owner representative or engineer (OR-OE) who is experienced in power plant or industrial demolition and can help manage a competitive bidding process. An OR-OE will help not only to streamline the project and provide guidance on how to structure the bids: the OR-OE also can prepare site drawings that permit bidders to do take-offs, help establish realistic cost expectations, work with the internal team to define the best demolition approaches, and identify the most experienced potential bidders. The OR-OE can even provide significant input into the potential for sale or salvage of large pieces of equipment and structural metal.
Owners frequently engage environmental consultants to support the preliminary assessment of potential remedial issues. For example, the large equipment present in power plants