EPA Regulation: Utility MACT Proposal Jennifer Macedonia March 24, 2011
What is Utility MACT? 2 Proposed EPA regulation for public comment Controls power plant smokestack emissions New and existing facilities Coal & oil-fired Hazardous air pollutants (HAP)/air toxics: metals (e.g., mercury, arsenic, chromium, nickel) acid gases (e.g., hydrogen chloride (HCl)) organic air toxics (dioxin, furans) MACT= Maximum Achievable Control Technology
Why did EPA propose MACT? 3 1990 Clean Air Act required EPA study on power plant toxics determine if “appropriate and In 2000, EPA determined: yes necessary” to regulate Thus, Act requires MACT emission limits First EPA attempt (2005 CAMR) thrown Court disagreed w/EPA “delisting” power out by court in 2008 sector from toxic provisions Court-ordered deadlines for Utility MACT Proposed Rule: March 16, 2011 Final Rule: November 16, 2011
What is required? 4 Strict “command & control” MACT emission limits Mercury, Particulate Matter (PM), HCl (acid gas) Work practice standards (good combustion) Dioxin/furans Some existing units comply w/current controls For some, required installations include: Activated Carbon Injection (ACI) Upgraded particulate controls Scrubber or Dry Sorbent Injection (DSI) Some units will retire rather than invest in controls HCl: Hydrogen Chloride
MACT Flexibility 5 Facility-wide averaging Could allow some units to exceed MACT limits Weaker limits for Existing units, compared to new Lignite, compared to other coal subcategories Pet coke, compared to oil Alternative emission standards (less monitoring) Exempt gas units that infrequently burn oil 4 th compliance year, if needed for controls
Health Based Emission Limits 6 Clean Air Act requires MACT for air toxics Limit at least as stringent as performance of top 12% EPA discretion for less stringent alternative Health Based Emission Limit CAA §112(d)(4) Must ensure margin of safety above health standard In past, EPA exempted other sectors from HCl MACT But EPA did not use health-based limit for utilities Power plants are largest human source of many toxics Lack of info on respiratory irritant cumulative impacts Environmental effects of acid gases Significant health co-benefits of MACT limit MACT: Maximum Achievable Control Technology HCl: Hydrogen Chloride
MACT Costs and Benefits 7 Health Costs Benefits Benefits are primarily from co-benefit particle reductions Source: EPA projected costs and benefits
Potential Impacts on Jobs 8 “EPA finds that more jobs will be created in the air pollution control technology production field than may be lost as the result of compliance with these proposed rules” Temporary gains during construction phase Long term impacts harder to discern
MACT Emission Reductions 9 • 78% reduction of mercury Hg HCl • 91% reduction of acid gas PM • 30% reduction of particulate matter SO 2 • 55% reduction of sulfur dioxide CO 2 • 3% reduction of carbon dioxide EPA projected % reduction from affected units, compared to their baseline reference case
Electric Reliability 10 With proper planning and coordination Retirements and retrofits should be manageable But poor planning and stacking up retrofits in the last year/maintenance season could lead to issues EPA: “To the extent that isolated issues remain concerning the availability of electricity in some more remote parts of the country, we believe that EPA has the ability to work with companies making good faith efforts to comply with the standards so that consumers in those areas are not adversely affected.”
MACT Retirement Projections 11 EPA: MACT retires <1% national capacity (10 GW) On top of 27 GW expected to retire regardless Includes Transport Rule in baseline but not future rules for ash, cooling water, NO X , or GHGs Other studies Assume all units install most expensive technologies EPA allows lower cost alternative technologies to comply Include worst case estimates of other rules Ash disposal, cooling water, future NO X , and GHGs Some studies include baseline retirements projected regardless of EPA regulation
What Replaces Retired Coal? 12 Retired: small, inefficient generators that do not operate near full capacity Extra capacity in existing fleet to take up slack Capacity additions, regardless of MACT 25-36 GW renewables (mostly wind) 1-3 GW gas As a result of MACT, EPA projects: 83 MW of new renewables built by 2015 No new gas, nuclear, coal (incremental) MACT: Maximum Achievable Control Technology GW: Gigawatts
Retirements vs. Retrofits 13 Retirements Control Installations
Pollution Control Technologies 14 Retrofit Capital Costs Relative Capital Cost $/kW 300 MW 500 MW 700 MW * Wet scrubber DSI Baghouse ACI SCR Ash Cooling Tower Alternate Water * Dry scrubber cost 10-15% less Pollutant/Issue Control Technologies Acid Gases + Sulfur Dioxide (SO 2 ) Wet or dry scrubber or Dry Sorbent Injection (DSI) + Particulate Controls Metallic toxics/Particulate Matter (PM) Baghouse/Fabric Filter or ESP Mercury Activated Carbon Injection (ACI) + Particulate Controls or wet scrubber + SCR NO X Selective Catalytic Reduction (SCR) or SNCR, low-NO x burners, etc Coal ash Dry ash handling + ash pond/pit liners, etc Cooling Water Intake Screens, barrier nets, low velocity caps, etc or Cooling Tower
Relative Costs of Control 15 Retrofit Capital Costs Relative Capital Cost 300 MW 500 MW 700 MW or Wet scrubber DSI Baghouse ACI SCR Ash Cooling Tower Alternate Water MACT Controls Pollutant/Issue Control Technologies Acid Gases + Sulfur Dioxide (SO 2 ) Wet or dry scrubber or Dry Sorbent Injection (DSI) + Particulate Controls Metallic toxics/Particulate Matter (PM) Baghouse/Fabric Filter or ESP Mercury Activated Carbon Injection (ACI) + Particulate Controls or wet scrubber + SCR NO X Selective Catalytic Reduction (SCR) or SNCR, low-NO x burners, etc Coal ash Dry ash handling + ash pond/pit liners, etc Cooling Water Intake Screens, barrier nets, low velocity caps, etc or Cooling Tower
Compliance with Acid Gas Limits 16 EPA Projected Retrofits for Acid Acid Gases Gases Add Dry MACT GWs Design + Scrubber Retrofits construction Add DSI * Existing time 1 Scrubbers DSI 65 12 months Retrofits Dry FGD 24 24 months regardless Wet FGD 4 36 months of MACT Add Wet Scrubber * Particulate control upgrades/retrofits also required with DSI and to comply with MACT PM limit 1 Institute of Clean Air Companies, Letter to Senator Carper, November 3, 2010 Analysis based on EPA data files from MACT IPM runs
Annual Control Costs 17 Annualized Costs of Utility MACT Retrofits Relative Levelized Cost 300 MW 500 MW 700 MW wet scrubber DSI Baghouse ACI Scrubber investment much higher than DSI But on-going cost of DSI brings annual cost closer to scrubber DSI best suited for certain fuels & smaller, less frequently run units
Other Rules For Power Sector 18 Air Transport Rule: SO 2 and NO X caps Transport Rule II: tighter caps GHG NSPS Water Cooling Water Intake 316(b) Waste Coal Ash – Coal Combustion Residuals
Power Sector EPA Rules 19 Estimated Compliance Dates for Upcoming Regulations 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 AIR Transport Rule Phase I Phase II Caps Utility MACT National Emission Standards Transport Rule II pending revised NAAQS GHG NSPS new units existing units: pending EPA/state rulemakings WATER 316(b) Intake 5 yr phase - in, pending rule WASTE Coal waste/ash pending final rule
Also Proposed: Revised NSPS 20 Revised new source emission limits • New Source Performance Standards (NSPS) • For conventional pollutants: PM, SO 2 , NO X Responds to past litigation • EPA sued on 2006 NSPS amendments • 2009 voluntary remand
www.BipartisanPolicy.org 21 Jennifer Macedonia jmacedonia@bipartisanpolicy.org
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