How Will Electric Utilities Respond To New Rules On Carbon Emissions?

Coal-dependent electric utilities, the coal mining industry, and others have been warning of dire economic consequences, with one calling EPA's rules the "nail in the coffin" for coal-based power. While retrofitting to meet the other rules is mostly a matter of cost-effectiveness relative to the age and output of a plant, cutting carbon emissions is different: At present, there is no commercially available way to cut carbon emissions at the smokestack without major plant modifications. To keep some plants running, various options are being pursued. In many cases, such changes are likely to raise the cost of power due either to capital investment or more expensive fuel.

• "Co-firing" involves running an existing plant on a mix of coal and natural gas, thus maintaining power output with less coal and lower emissions. Burning natural gas produces (per kWh) only half the carbon that coal combustion emits.
• "Re-powering" is essentially rebuilding or replacing a plant at the same site but running on a different fuel such as natural gas.
• "Biomass" is a generic term for chipped or pelletized wood, from forest waste or whole trees. When it is mixed with coal, net carbon emissions are reduced, though power output may drop.
• Billions are also being spent to develop systems that capture carbon dioxide from plant emissions and "sequester" it in underground formations in liquid form. Present carbon capture methods cost so much, and consume so much of a plant's power, that deployment in the near future is unlikely.

Some of those options may be limited by access to sufficient gas pipeline capacity, proximity to biomass, and design of an existing power plant. Because of such limitations, many new gas-fired plants are either under construction or on order by electric utilities and power suppliers. While more efficient, new plants are also more expensive to build than those they replace.

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