Dr. Sue Tierney, former Massachusetts state regulator and Department of Energy official, is set on waking up some in the power industry from a sluggish state. Tierney’s mission is to show the industry that compliance with U.S. Environmental Protection Agency (EPA) regulations should not be delayed.
Tierney is also lead author of a reliability report, Ensuring a Clean, Modern Electric Generating Fleet while Maintaining Electric System Reliability, a gathering of information on the industry’s readiness for compliance.
According to two July 2010 studies by the Energy Information Administration, the combination of low energy prices and EPA air regulations could result in the retirements of between 25 to 40 GW of the nation’s 1,030 GW of electric generating capacity. Although some plants may be retired, Tierney’s report found that approximately half of the nation’s coal-fired generating capacity (150 GW) has already installed SO2 scrubbers, another 55 GW plan to install scrubbers and a significant number of coal units have already announced plans to retire. That necessitates one-fourth of the nation’s coal-fired generation to add pollution controls, switch to a cleaner fuel or retire.
Despite all of the changes needed to be made on units in the next few years as a result of the air, coal ash rules and water rules, Tierney is confident that the electric industry is prepared to meet the challenge. Her reliability report found that each North American Electric Reliability Corporation (NERC) reliability region has excess capacity, totaling over 100 GW of excess capacity nationwide. In fact, between 2001 and 2003, the electric industry built over 160 GW of new generation – about four times what analysts project will retire over the next five years. Therefore, even if projected retirement scenarios prove accurate, the likelihood of capacity shortages is slim, Tierney said.
Tierney’s platform is that the electric industry is well-positioned to respond to emissions regulations, with commercially available NOx, SO2, mercury and acid gas control technologies. Many coal plants have already been fitted with scrubbers: Between 2008 to 2010, approximately 60 GW of coal capacity was installed with scrubbers, with the industry completing more than 50 scrubber retrofits each year, the report found. Tierney said those in the industry who are delaying do so out of an impression that tarrying will be to their financial benefit.
“The friends of delay could create the very problem they’re saying they don’t want to have happen by getting everyone on the delay bandwagon. Then people won’t start to make decisions and figuring out how they’re going to comply soon enough,” Tierney said.
Among the many rules that EPA is addressing, the transport rule for SOx and NOx and the hazardous air rules for mercury are under court order under existing law for power plants to implement necessary changes, Tierney said. “I think debating whether that is worthy of considered delay is a tactic which would have unfortunate consequences.”
However, the EPA has much more discretion over the water rules, which will determine what kind of cooling system changes if any need to be made at existing plants. Tierney said those rules may be worthy of considering delay.
Tierney said emissions regulations are just one set of the many rules that the industry has responded to over the last 30 years. “Simultaneously we’ve been able to afford keeping the lights on and providing relatively affordable electricity supply.”
While Tierney is confident that the emissions adjustments are doable, some in the industry argue that time and money spent on control technology implementation are time and money taken away from research and development. Tierney, however, said she has witnessed many experiences in which government requirements have stimulated problem solving and innovation in response to compliance requirements. In addition, “From an industry point of view, the folks who work on R&D are not the folks who work on the engineering of solutions.”
Tierney’s standpoint is that the electric sector is well-positioned to respond to EPA’s mission to “help millions of Americans breathe easier and live healthier” without threatening electric reliability. “With economic costs, there will also be economic benefits related to health as well as investment/construction stimulus.”
She said that industry studies that raise the spotlight on reliability issues do not typically incorporate assumptions about how the market will respond and therefore are not necessarily sound pictures of what will occur. Existing substantial excess capacity, the electric industry’s proven track record to timely construct new generation and to efficiently coordinate the scheduling of planned outages, together with transmission enhancements, smart grid investments, fuel conversions, relatively low gas prices and demand-side actions should mitigate reliability and cost concerns, Tierney said.
“As a final backstop, existing statutory, market and regulatory safeguards will facilitate the retirement of inefficient units, and an orderly transition to cleaner, more efficient generation.”
Click here to read the entire report (PDF) co-authored by Dr. Tierney.
Tough talk ("unfortunate consequences" - sounds like a threat by a corporate bully) and motherhood statements don't make good policy. Excess capacity is called Reserve in the electricity industry, as a proportion may be unavailable during peak periods. More importantly, is there excess Reserve?
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