POWER October 2010 - 82

FUELS
U.S. Coal-Fired Power Development:
Down but Not Out
Environmentalists renewed their attacks on coal-fired power development in
2010. At the same time, Congress dithered on cap-and-trade legislation
while the Environmental Protection Agency marched forward rules to reduce
carbon emissions from coal-fired power plants. Couple the regulatory
uncertainty with lean economic times that have flatlined electricity
demand growth plus low natural gas prices, and the result is predictable:
New coal-fired plant construction is in the doldrums.
By Britt Burt and Shane Mullins, Industrial Info Resources
F
or developers of coal-fired power generation,
2010 has been a difficult year,
and 2011 looks to be more of the same.
Long-sought legislative clarity on carbon
dioxide (CO2
) emissions proved elusive, as
Congress was consumed by lengthy debates
over the BP oil spill, the economy, and reforms
to the health care and financial systems.
Despite the Obama administration's
prodding and the potential for the Environmental
Protection Agency (EPA) to begin
regulating CO2
emissions under its Clean Air
Act authority, nothing could move energy
legislation on Capitol Hill in 2010.
This lack of clarity-about carbon regulation,
the EPA's Transport Rule, and the
EPA's pending draft regulations on mercury
emissions, among other factors-put development
of new-build coal-fired power plants
in the U.S. in a state of limbo during 2010.
As of September, not a single new coal-fired
power project has begun construction this
year. Industrial Info is tracking 14 coal projects
that are currently under construction in
the U.S., representing approximately 9,200
MW of new generating capacity. Two additional
projects, representing 1,250 MW, are
in advanced stages of development, and another
25 projects, representing over 15,000
MW, are in various stages of planning. Balancing
out these new projects are the 55 projects,
representing over 33,000 MW, that have
been placed on hold in 2010.
Prairie Plant Progress
The Prairie State Energy Campus (PSEC) in
Marissa, Ill., is one of the few coal-fired projects
under construction. In many ways, this
plant is emblematic of the state of coal-fired
power development in late 2010.
PSEC is a $4 billion power plant and
coal mine complex scheduled to go online
in late 2011. When completed, PSEC will
82
include two supercritical units, each rated at
800 MW, that promise to produce 15% less
CO2
than traditional pulverized coal boilers.
Environmental control equipment occupies
nearly half of the complex's footprint, including
selective catalytic reduction for NOx
reduction, a dry electrostatic precipitator to
remove 99.9% of the particulates, a flue gas
desulfurization system to remove 98% of the
sulfur dioxide, and a final wet electrostatic
precipitator to remove any remaining particulates
and other constituents in the flue
gas. Sufficient mercury will also be removed
from the flue gas by the air quality control
equipment to be in compliance with Illinois
mercury emissions limits.
What's missing? Opponents of the project
argue that the plant should have CO2
emissions
controls in anticipation of new carbon
reduction regulations. Proponents argue that
developers are not required to meet future,
undefined regulations but only must comply
with those regulations in effect when permits
were secured. This is the uncertainty
that plagues coal-fired plant developers these
days.
Although construction is advanced, PSEC
remains a high-value target for many environmental
organizations. The " Beyond Coal
Campaign, " organized several years ago by
the Sierra Club and including the participation
of a number of environmental groups,
has a goal of stopping all new coal-fired power
plants. In hearings held by Congress and
state public utility commissions, increasingly
sophisticated environmental advocates called
attention to the financial, environmental, and
regulatory uncertainties posed by construction
of new coal-fired power plants.
The " Beyond Coal Campaign " claims to
have killed 133 of 237 proposed coal-fired
power projects in the U.S. Industrial Info's
data show that 131,000 MW of planned
www.powermag.com
U.S. coal-fired generating capacity have
been cancelled in recent years, representing
a total investment value in excess of $200
billion. How many of these plants were cancelled
due to environmentalist intervention,
the drop in electricity demand due to the recession,
uncertainty about federal and state
regulations, or significant new natural gas
reserves (and much lower prices) remains
underdetermined.
An Aging Fleet
While the tide of public opinion has been
turning against coal, time may be on the side
of coal-fired power developers. Roughly half
of the nation's electricity still comes from
coal-fired power plants. The U.S. has about
328,000 MW of operating coal-fired power
plants, but more than one-third of that capacity-117,397
MW-is more than 40 years
old. Among these senior citizens, more than
600 smaller coal-fired generators, totaling
over 60,000 MW, have installed no emissions
control equipment to comply with EPA
rules that are expected to be finalized by the
end of 2011. Most analysts expect that many
of these older, higher-emitting plants will be
shut down once the industry knows the environmental
standards to which these plants
will be held.
According to Industrial Info's research,
more than 14,000 MW of coal-fired capacity
are scheduled to be retired over the next five
years. Other sources see as much as 27,000
MW of coal power retirements.
A sizable percentage of the nation's coal
fleet is nearing retirement age, and little is
being done today to replace those aging assets.
During 2010 considerable natural gas
power development took place (see " U.S.
Gas-Fired Power Development: Last Man
Standing, " POWER, September 2010). But
few who lived through the last gas-fired powPOWER
| October 2010
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POWER October 2010

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