Given the huge costs involved in the CCS deployment, the most interesting thing is that EPA believes the proposed rule will have no notable compliance costs associated with it. This is because electric power companies would be expected to build new EGUs that comply with the regulatory requirements of the EPA proposal even in the absence of the proposal, “due to existing and expected market conditions”.
Because of the economics of the energy sector, the EPA and others project that NGCC will be the predominant choice for new fossil fuel-fired generation even absent the new EPA rule.
It may be surprising but in its base case analysis, EPA does not project any new coal-fired EGUs without CCS to be built in the absence of EPA proposal through 2030.
This is the explanation for the EPA assertion that the proposed rule will not impose additional costs by 2030. It appears that everything depends on the appropriate assumptions...
To be strict EPA also examined a scenario with both increased future natural gas prices and increased future electric demand. In this sensitivity case, EPA saw small amounts of coal-fired generation being built in 2030. Even under this sensitivity analysis with small amounts of new coal generation under conditions of high natural gas prices and simultaneously high electricity demand in 2030, EPA however does not project that the proposed rule will impose notable costs upon sources.
It is obvious that the above assessments are US-specific. This is due to the relative abundance of the shale gas in that country.
So, the new standard will generally require that new power plants emit CO2 at a rate no greater than that of a natural-gas-fired power plant. Such plants emit about 60 percent less greenhouse gases than coal plants.
It is pointed out that the only coal plant to break ground during the Obama administration is a carbon capture and sequestration plant — Southern Co.’s Kemper County plant in Mississippi (which is federally-subsidized).
As the Post reports, “utility companies have announced that they plan to shut down more than 300 boilers, representing more than 42 gigawatts of electricity generation — nearly 13 percent of the nation’s coal-fired electricity— rather than upgrade them with pollution-control technology.”
The new EPA rule is now open for public comment for 60 days.