In the administration’s first major GHG regulatory action since President Obama launched his Climate Action Plan in June 2013, the EPA proposed new source performance standards (NSPS) setting CO2 emission limits for new fossil-fuel electric generating units (EGUs).

The proposal is actually a revision of the Agency’s April 2012 proposal, which, according to the EPA, prompted 2.5 million public comments, including recommendations from industry which the Agency found persuasive. While the new proposal is not radically different than from the earlier version, release of the revision in conjunction with the president’s plan and the controversial installation of Gina McCarthy as new EPA administrator, appear to have raised the stakes in the national approach to climate change.

One concession to industry in the EPA’s revised proposal would separate emission requirements based on whether the plant is either gas-fired or coal-fired. This is probably the major departure from the Agency’s earlier proposal. That action would have set a single “fuel neutral” NSPS for all new coal-fired and gas-fired EGUs. The standard was based on the level of emissions that the EPA said was achievable with natural gas combined cycle (NGCC) technology, or the best system of emission reduction (BSER).  

As specified in the Clean Air Act (CAA), BSER is the technology from which the NSPS must be derived.  The CAA requires that BSER must also be demonstrated—that is, the technology must be one that is being used in the relevant sector on a commercial scale.  In the revised proposal, NGCC continues to be BSER for gas-fired EGUs.  For coal-fired units, the revised proposal now specifies “partial carbon capture and sequestration” (CCS) as BSER.  If the NSPS is finalized as proposed, EPA’s major legal battle will likely be proving that CCS has in fact been demonstrated as that word is understood in the CAA.

“Wholly unproven”

According to the EPA, partial CCS can result in 30 percent to 50 percent less carbon dioxide (CO2) emissions than what is emitted by a coal-fired unit without CCS.  While the word “partial” was not used in the earlier proposal in conjunction with CCS, the difference is not making an impression on those who still believe the EPA is using its CAA rulemaking authority to make it virtually impossible to construct new coal-fired power plants with any technology other than CCS. 

“Unfortunately, EPA has so manipulated the Clean Air Act that they are actually for the first time mandating a best system of emissions reduction for power plants that is wholly unproven, costly, and expected to increase rates,” said Senator David Vitter (R-LA) in response to EPA’s revised proposal.  Vitter is the ranking member of the Senate Environment and Public Works Committee.

Working projects

But the EPA asserts that CSS has advanced well beyond the testing stage.  For example, the Agency notes that the Pacific Northwest National Laboratory (PNNL) recently prepared a study that evaluated the development status of various CCS technologies for the Department of Energy (DOE).  The study addressed the availability of capture processes; transportation options (CO2 pipelines); injection technologies; and measurement, verification, and monitoring technologies. 

The PNNL concluded that, in general, CCS is technically viable today and that key component technologies of complete CCS systems have been deployed at scales large enough to meaningfully inform discussions about CCS deployment on large commercial fossil fuel-fired power plants.   In the revised proposal, the Agency provides multiple examples of specific CCS projects now under way in the United States. 

“A standard based on partial CCS clearly promotes implementation and further development of CCS technologies and does so as much as, and perhaps even more than, a standard based on a full capture CCS requirement would,” says the EPA.  Here the Agency indicates its belief that the equipment requirements for full CCS would be so costly that energy companies will be unwilling to implement the technology.  With partial CCS, companies could meet the NSPS standard at lower cost through the use of a conventional syngas turbine, rather than a more advanced hydrogen turbine, according to the Agency. 

Proposed limits

The revised proposal comprises three limits:

• 1,000 pounds (lb) CO2/megawatt hours (MWh) for large natural gas-fired stationary combustion turbines.
• 1,100 lb CO2/MWh for small natural gas-fired stationary combustion turbines.
• 1,100 lb CO2/MWh for fossil fuel-fired utility boilers and integrated gasification and combined cycle (IGCC) units.  IGCC is a technology that uses a gasifier to turn coal and other carbon-based fuels into gas. 

Additionally, under the revised proposal, the EPA would:

• Replace the previously proposed alternative 30-year averaging compliance option for new solid fuel-fired EGUs with an alternative 7-year (84-operating-month) averaging option and is soliciting comment on a limit of 1,000 to 1,050 lb CO2/MWh.
• No longer exclude all previously identified transitional sources (but is considering a subcategory for one to three coal-fired projects that are still currently under development).
• Replace the previously proposed exemption for simple-cycle combustion turbines with a proposal to exempt units that sell to the grid a relatively small portion of their potential electric output.  These exempt units generate less than one-third of their potential electric output over a 3-year rolling averaging period.

Technical feedback

Overall, the limits in the revised proposal look very similar to those in the original proposal. “New plants will have to limit their carbon pollution to virtually the same levels as EPA proposed in 2012,” wrote David Doniger, director of Climate and Clean Air Policy with the Natural Resources Defense Council. Doniger does note that the revision reflects new technical information that was included in comments the Agency received on the original proposal.

Those technical changes were also recognized by the Edison Electric Institute (EEI).  “The rule issued today includes several important changes from the original proposal on the natural gas standard,” said the EEI.  “Given the growing reliance on natural gas to meet a larger share of electricity demand, it is critical for EPA to set standards for natural gas-based units that are achievable over a range of operating conditions, and we appreciate the changes.”

But the EEI is concerned about the effect the proposed requirements would have on coal-based generation.  “We cannot afford to take generation sources out of the mix, as fuel diversity guards against potential supply disruptions and is key to affordable and reliable electricity,” says EEI.

EEI also expresses doubt that partial CCS will, in fact, lead to wider deployment of the technology, as claimed by the EPA.  “As proposed, this rule would hinder efforts to develop cost-effective CCS—a critical technology for mitigating greenhouse gas emissions going forward—because it effectively prevents the building of new clean coal plants,” says EEI.  

EPA’s revised NSPS proposal for new fossil-fueled EGUs and related information