Geoscience Reference
In-Depth Information
new units that do not burn fossil fuels (e.g., units that burn biomass
only).
EPA referred to the first two groups (i.e., units that have permits and
began construction by April 13, 2013), as ―transitional‖ units, and says there
are about 15 of them.
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They include units that are participating in DOE CCS
funding programs. Whether the proposed exemptions will be modified in the
re-proposed rule is unclear.
EPA's Cost-Benefit Analysis
EPA's Regulatory Impact Analysis (RIA) for the 2012 proposal concluded
that ―even in the absence of this rule, existing and anticipated economic
conditions in the marketplace will lead electricity generators to choose
technologies that meet the proposed standards.‖
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Those conditions include the
abundance and low projected cost of natural gas, the many state requirements
that increasing amounts of electricity come from renewable sources, and the
increasing cost of coal-fired electricity due to higher coal prices and new
emission standards for emissions of conventional and toxic air pollutants.
These factors combined make it likely that almost all new generation will
come from natural gas combined cycle or renewable sources, according to
EPA. Using the current version of the Integrated Planning Model, a model
developed by ICF Inc. that EPA and many industry sources have used to
analyze the impacts of regulations since the 1980s, EPA ran several different
scenarios to analyze the sensitivity of the results to various assumptions. These
included a high electricity demand scenario, a low gas recovery scenario
(which results in higher prices for natural gas), and a scenario combining both
assumptions. None of these assumptions caused the model to indicate
construction of new coal-fired capacity.
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The analyses found that ―the price of
natural gas would have to increase to approximately $10/mmBtu [million Btu]
for coal boilers without CCS to become competitive with combined cycle
natural gas units, which is projected to be very unlikely.‖
15
The current price
of natural gas, on June 26, 2013, was about $3.75/mmBtu.
16
With no new coal plants (except for those identified as exempted from the
rule, above), EPA saw little quantifiable impact from its prospective NSPS
promulgation. As the RIA states, ―... EPA anticipates that the proposed EGU
GHG NSPS will result in negligible CO
2
emission changes, energy impacts,
quantified benefits, costs, and economic impacts by 2020.‖
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