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Regulations, appropriations and coal-fired power plants

SilverLakeRPU.jpgTo understand the Republican assault on environmental regulations, which kicked into high gear once again in the US House of Representatives this week, consider this projection: 10-20 percent of the United States’ coal-fired electric generation could be closed down over the next decade or so, due not to climate regulations but old-school rules targeting air pollutants.

“The scope and scale of this potential loss of generation capacity is unprecedented,” ICF International, a consulting firm based in Fairfax Virginia, says in a new report focusing on the implications for the electric grid.

The regulations are in various stages and have been coming down the pike for a long time, so it’s not exactly a surprise to industry. That said, the United States is at a point where the cumulative impact of decades of regulation aimed at everything from sulphur dioxide and nitrogen oxides and mercury is coming to a head. The cost of meeting the new regulations is simply too high for old and inefficient plants, and undoubtedly this equation has helped feed an already powerful anti-government sentiment among many Republicans.

To be clear, the GOP attack on the Obama administration’s regulatory authority goes well beyond the EPA. Republicans are taking aim at various agencies through the Interior appropriations bill in the House this week, including the Fish and Wildlife Service, the US Bureau of Land Management and the National Park Service. Budgets for environmental agencies have been cut across the board (summary table in PDF form here), but EPA is clearly at the center of the dispute. Its budget would fall $1.5 billion, nearly 18 percent, which comes on top of a cut of $1.6 billion in the current fiscal year. The funding bill would also put a one-year hold on any new air and water regulations.

In some ways this week’s debate amounts to another round of Republican grandstanding given that the House bill isn’t going anywhere in the Senate. But the big question is what happens if Republicans do what they have done thus far on the US debt ceiling and refuse to back down, the Natural Resources Defense Council’s David Goldston told the New York Times. If that happens on an appropriations bill, either the Democrats blink or the government shuts down.

For its part, IFC International is assuming that regulatory actions such as the new pollution standards for industrial boilers – which the administration delayed last month – will ultimately move forward. In such a scenario, electric utilities are likely to close down older and smaller plants, generally located in the Midwest and southern states.

The firm says there are no technical barriers but warns that the job may prove more difficult and time consuming than expected; companies will need to conduct detailed modelling to analyze impacts on the grid, and then some power plants may need to be retained on standby for a time. “Decisions are very difficult to reverse once the train has left the station,” the report says. “All players need to commit to conducting the necessary groundwork and taking the time to do it right.”

The message is generally an optimistic one, but it’s unlikely to appease those who are fighting the regulations.

Photo courtesy of Wikipedia


  1. Report this comment

    Coal Portal said:

    The investment into alternative power generating technologies such as nuclear energy may need to be measured against the potential cost when things turn against you as unfortunately happened this year in Japan. The use of thermal coal (steam coal) that is mostly burnt for power generation may be valid for other countries who may not be able to allocate resources and funds to alternative and more greener sources of power. Coal newsletters and coal statistics show developing economies are more likely to increase their investment into & their use of thermal coal & metallurgical coal in coming years because of coal’s affordability and ability to quickly meet increasing demands for electricity and steel. Cherry of

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