Transcript Presented by - American Public Power Association

Update/Status on Permitting Challenges Facing
New Coal Plant Construction
Presented to:
American Public Power Association
APPA New Generation Workshop
Portland, Oregon
August 1 and 2, 2007
Presented by:
Jennifer Sharp Seinfeld, P.E.
Principal
Zephyr Environmental Corporation
© 2004 Zephyr Environmental Corporation
Outline of Presentation
• Construction of New Coal-Fired
Generation Issues
–Overview
–Costs
–Carbon/Climate Change
–Mercury
–BACT
–Modeling
• Status of Recent Projects
© 2004 Zephyr Environmental Corporation
Where have we come from?
Ref: epa.gov/air/airtrends/econ-emissions.html
…and electrical demand keeps growing…
© 2004 Zephyr Environmental Corporation
The “Old” News Headlines
• Coal’s Bright Future
(Time, Jun 2006)
• TXU Faces a Texas Coal Rush
(Fortune, Feb 2007)
• Midwest Has ‘Coal Rush’, Seeing
No Alternative
(Washington Post, Mar 2007)
• Coal? Yes, Coal!
(Business Week, May 2007)
© 2004 Zephyr Environmental Corporation
The New News Headlines…
• Burning Issue – Environmentalists,
Utility at Odds over Coal
Post and Courier, ~July 17, 2007
• Coal Doubters Block New Wave of
Power Plants
(Wall Street Journal, July 25, 2007)
• U.S. Senate Majority Leader Harry
Reid Tells Four Companies No Coal
Power in Nevada
(Washington Post, July 26, 2007)
© 2004 Zephyr Environmental Corporation
Why the shift?
• Primarily
– Costs
– CO2/Climate Change Issues
• In addition,
– IGCC?
– Mercury
– BACT issues
– Modeling
© 2004 Zephyr Environmental Corporation
Costs
• In February 2007 APPA study concluded that
capital costs for new generation were
increasing rapidly
• Duke Energy Carolina Cliffside Project
– In testimony before NC Utilities Commission
announced a 50% increase in expected project
cost (from 18 mon earlier) due to price escalation
in raw materials and increased demand for coal
plants
– NC Utilities Commission denied authorization for
second unit based on cost
© 2004 Zephyr Environmental Corporation
Costs (cont)
• More recently (UARG study):
– Price increases of basic materials (steel,
concrete, copper wire/cable, etc.)
– Limited suppliers (less bids)
– Shortage of equipment (e.g., cranes)
– Restricted labor pool
• Cost and schedule pressures will be
greater for small generators
© 2004 Zephyr Environmental Corporation
CO2 – Role in Permitting
• April 3, 2007 Supreme Court Decision:
EPA has authority to regulate GHG
• So exactly what does this mean for
CO2 in new coal plant permit
applications?
– Collateral impacts in BACT evaluation?
– Carbon reduction commitment
• EPA is evaluating its options
– New Source Performance Standards?
© 2004 Zephyr Environmental Corporation
GHG/Climate Change
• Currently, GHG emissions almost
always No. 1 issue in opposition to
new construction
• Carbon reductions often part of
settlement agreements
• Climate change concerns a huge issue
for public service commissions, utility
management in considering new
plants
• The reality is that GHG/CO2/climate
change issues must be addressed in
the permitting process
© 2004 Zephyr Environmental Corporation
Cost Issues and Climate Change
Concerns Sometimes Conflict
Hearing judge of Minnesota PUC
recommended Excelsior Energy’s
proposed power purchase agreement
be denied because costs would
increase by $1.1 billion ($50/MW-hr) to
capture 30% CO2 emissions and
convey by pipeline to deep geologic
storage at the proposed Excelsior
Energy Mesaba IGCC plant
© 2004 Zephyr Environmental Corporation
GHG State and Regional Initiatives
Continue to Gain Support
• Washington ESSB 6001
– “1100 lb CO2/MWhr” standard
– 1990 CO2 levels by 2020
• California AB 32
– Goal: reduce GHG to 1990 levels (~25%) by 2020
– Affects multiple sectors
– Restricts ‘dirty power’ coming into the state
• Regional Greenhouse Gas Initiative (RGGI)
– GHG cap-and-trade program for EGUs in CT, DE, ME,
NH, NJ, NY, VT, and MD
– Begins Jan 1, 2009
• Other State/Regional Programs
– Lake Michigan Air Directors Consortium (LADCO) – IL,
IN, MI, OH, and WI
© 2004 Zephyr Environmental Corporation
IGCC for PC Plants?
• Dec 2005 EPA letter (“…redefines the
source..?”)
• However, on a practical level, the
state decides whether BACT includes
IGCC
– Michigan, Kentucky, New Mexico –
required to be considered
– Often required to be considered in
alternatives analysis
• IGCC with and without CCS – a
distinction not understood by all
© 2004 Zephyr Environmental Corporation
Future IGCC Projects
• Two Operating Plants (Wabash River in IN
and TECO in FL)
• Several other applications pending
– Pacific Mountain Energy Center – WA (project
being reviewed)
– Christian Co. Generation - IL
• Permit issued 6/07
• Sierra Club appealed on CO2 issues
– Duke Energy Indiana – IN
– AEP Mountaineer – WV (stalled Jan 2007 due to
rising construction costs)
– AEP Great Bend – OH (permit under appeal;
arguments scheduled for Oct 2007)
– OUC Southern Power Co – FL (permitted 12/06)
– Xcel Energy – CO (permit to be filed later in 2007)
© 2004 Zephyr Environmental Corporation
Mercury Requirements for New
Construction
• Clean Air Mercury Rule (CAMR)
– 40 CFR 60, Subpart HHHH
• BACT for Mercury
– Regulated as a PSD pollutant
– CAMR or state mercury requirements
satisfy BACT(?)
• Mercury impacts on Class I Areas?
– Requested for FP&L project
– Possible requirement for ecological risk
assessment
© 2004 Zephyr Environmental Corporation
More Stringent State Mercury
Requirements
Regulations may be/close to being final in NY, OR, MA and GA
Map courtesy of ADA-ES, Inc
© 2004 Zephyr Environmental Corporation
.
BACT Issues - % Removal
• Should % removal be required as
BACT?
• Case-by-case determination;
precedent for requirement
• EPA argument
– Ensures maximum control at all times
– Unrealistic to base SO2 emissions on
continuous use of highest sulfur fuel
• Much less flexibility for operation
© 2004 Zephyr Environmental Corporation
BACT Issues –
Start-up/Shutdown/Malfunction (SSM)
• Operation of many air pollution
control equipment systems
infeasible during SSM
– Limits as permit conditions?
– Modeled for NAAQS compliance?
© 2004 Zephyr Environmental Corporation
BACT: PM10 Condensables
• Typically PM10 emissions - ~ 50%
condensibles
• Continues to be inconsistencies in
permitting decisions
• Measurement method is critical;
some agencies allow for
alternative test method
© 2004 Zephyr Environmental Corporation
Modeling Issues – Class II
• PM modeling requirements
– PM2.5 24-hr standard lowered
– PM10 annual standard revoked
• Fugitive sources (e.g., road dust)
can cause impact problems
• Ozone and PM2.5 NAAQS
modeling
© 2004 Zephyr Environmental Corporation
Modeling Issues – Class I
• Increasing distance (300 km?) to
Class I areas requiring FLM
review
• Modeling (e.g., Calpuff) is more
complicated, time-consuming
• Can add significant delays
• New guidance was expected early
2007, but is not available yet
© 2004 Zephyr Environmental Corporation
Class I Modeling Requirements
© 2004 Zephyr Environmental Corporation
Settlement Agreement Success
• Public Service Commission of
Colorado – Camanche 3
– DSM programs
– Renewable commitments
– $250,000 to Pueblo schools for
school bus emission reduction
© 2004 Zephyr Environmental Corporation
The TXU story
• Applications filed for 11 new coal
plants in April, 2006
• TX Governor Perry issued an
Executive Order to fast-track permit
applications
• Consolidated hearings (rather than
individual ones) scheduled on
emission calculations, BACT - topics
that are not site-specific BACT; unique
issues (e.g., modeling results) to have
separate hearing
• MANY objected!
© 2004 Zephyr Environmental Corporation
The TXU Story (ending)
• In March, 2007, TXU abandoned plans
for 8 of the 11 plants and further
agreed to:
– Back federal legislation requiring CO2
reductions through a cap-and-trade
system
– Double spending (to $80 million/yr) to
promote energy efficiency
• (Be careful how you use your political
connections!)
© 2004 Zephyr Environmental Corporation
The Florida Story
• FL Power & Light Glades project
– 1960 MW coal plant proposed
– 80 km from the Everglades
– Project killed in mid-July citing uncertain future costs for
CO2 capture
• Taylor Energy Center (Florida Municipal Power
Agency, JEA, City of Tallahassee, and Reedy Creek
Improvement District)
– 800 MW coal plant
– “pulled the plug” on the project July 3
•
Seminole
– 750 MW unit
– In July, FL Department of Environmental Protection
rescinded permits
© 2004 Zephyr Environmental Corporation
Indian River IGCC, DE
• NRG Energy proposed a new 600 MW
IGCC plant at existing Indian River
Generating Station, DE
• Opportunity to sell power to Delmarva
Power
• In May 2007, DE PSC approved
Bluewater Wind’s proposed offshore
wind plant and ‘ordered’ Delmarva to
purchase its power, effectively
derailing the NRG IGCC project
© 2004 Zephyr Environmental Corporation
Concluding Thoughts
• Increased construction costs are a reality
• There have been some successes (e.g.,
through use of settlement agreements, and
CPS, City Utilities of Springfield, etc.)
• Biggest issues/concern is carbon/climate
change
• PCs are increasingly difficult to permit,
perhaps impossible in some locations
• Even approval of an IGCC is not a given due
to costs and CCS uncertainties
• But demand for energy is not going away…
© 2004 Zephyr Environmental Corporation
Contact Information
Jennifer Sharp Seinfeld, P.E.
Zephyr Environmental Corporation
10420 Little Patuxent Parkway, Suite 320
Columbia, Maryland 21044
410-312-7915
[email protected]
visit us at www.ZephyrEnv.com
And www.HazMatAcademy
© 2004 Zephyr Environmental Corporation