EPA Bets on ACE to Reduce Power Plant Emissions
The EPA last week unveiled a new proposal for reducing carbon dioxide (CO2) emissions from coal-fired power plants that would scale back an earlier Obama-era rule that has been in legal limbo for the last 2.5 years.
The Affordable Clean Energy (ACE) rule would supplant 2015’s Clean Power Plan (CPP). Enforcement of the CPP was halted by the Supreme Court in 2016 after 27 states challenged the rule.
The ACE rule would apply to about 600 coal-fired utility units across the country. EPA estimates that ACE would reduce CO2 emissions – a key Green House Gas (GHG) – by up to 30 million tons by 2025, or about 1.6 percent compared to 2017. It would also give the states more say in how coal-fired power plant emissions are regulated.
Background
The CPP started with a requirement for coal-fired power plants to increase their efficiency. That is, if coal burning were more efficient, more power would be produced with the same GHG emissions. ACE continues this power efficiency method of reducing GHG but adds some provisions to make that easier.
However, the CPP went beyond regulating individual power plants by giving each state a GHG emissions cap for future years and requiring it to develop a plan to meet those broader emissions goals. ACE sticks to the “inside-the-fence” approach of increasing efficiency on individual plants and does not regulate beyond the fence-line.
States Decide
ACE proposes that each state consider its own power plants and plan the best way to increase electrical efficiency.
EPA also proposes a new Standard of Performance for New Stationary Sources (see Subpart UUUUa, page 215) for existing coal-fired power plants in which the states decide the actual requirements. The standard of performance must be in terms of pounds of CO2 emitted per megawatt hour.
EPA concluded that heat rate improvements (HRI) – rather than fuel co-firing or carbon capture and sequestration – is the “best system of emission reduction.” EPA argues that each utility unit is different enough that HRI should be a case-by-case determination, so it leaves it to the states (and, most likely, the utilities) to determine best HRI for each unit.
The proposal and the EPA’s Regulatory Impact Analysis (RIA) provide information, data and costs on seven potential HRI for the states to consider:
- Neural network/intelligent soot blowers
- Boiler feed pumps
- Air heater duct leakage control
- Variable frequency drives
- Blade path upgrades
- Redesign/replace economizer
- Improve operations and maintenance practices.
It also mentions improving efficiency of air pollution controls as a method to reduce electricity use. The costs for HRI controls on the above list as reported by EPA are minimal, up to $31/kW.
States would have three years to provide a State Implementation Plan for EPA approval. Utilities would then have up to 24 months to make sure each unit complies.
Changes to the New Source Review Process
Past EPA practice required a New Source Review (NSR) whenever a coal-fired power plant made any investment, a costly and time-consuming endeavor. ACE proposes that NSR only be triggered when the maximum hourly emission rate increases for projects attempting to meet new efficiency targets – rather than calculating increases based on annual emissions. This change would only apply to units that are subject to this rule. EPA outlines a complex four-step process for making the determination of whether NSR applies.
The change is proposed because a more efficient power plant may be called upon by the grid to operate more often during the year. This approach prevents a plant from being penalized for producing more electricity with the same emissions.