Public Power Daily, May 2, 2012

Public Power Daily, May 2, 2012
EPA carbon rule would affect more natural gas plants than thought, study finds

The Environmental Protection Agency’s proposed carbon emission standard for new power plants may affect more natural gas-fired plants than estimated by EPA, according to a new study by the University of California Center for Energy and Environmental Economics. EPA said 95% of baseload natural gas units that would be subject to the rule—i.e., combined‐cycle gas turbine (CCGT) units first operating between 2006 and 2010—would meet the standard, but that was based on predicted emissions. A review based on actual emissions and self-reported generation found that only 84% of those plants would comply, said Matthew Kotchen of Yale and Erin Mansur of Dartmouth.

Only 71% of CCGT units planned for construction through 2017 would meet the EPA standard, based on predicted emission rates for those plants, the paper found. The authors said the lower percentage was because of a trend toward smaller capacity; units with a capacity of 226 MW or less are predicted to fail to meet the standard. The vast majority of these combined-cycle units would be grandfathered in before the rule takes effect; otherwise many would also have to rely on carbon capture and storage to meet the EPA standard’s 30‐year average emission rate.

These findings are useful for understanding how the standard could affect generating units that are modified and become subject to the standard under the Clean Air Act’s New Source Review provisions, the authors said.

While natural gas units designed to meet peak demand are exempt from the rule, the paper found that few of them would comply on an annual basis: only 10% of the simple‐cycle gas turbine units that commenced operating between 2006 and 2010 would meet the standard. However, demand for simple-cycle peaking units is expected to rise with increased deployment of renewables, the study noted. "This relationship raises important questions about how the exemption of SCGT units from the [carbon standard] may affect the efficacy of renewables for reducing CO2 emissions."

No coal‐fired generation would comply with the EPA standard’s 30‐year average emission rate without taking advantage of future innovations in carbon capture and storage technology, the paper found.

The paper, How Stringent is the EPA’s Proposed Carbon Pollution Standard for New Power Plants?, is available on the center's website.

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