By William C. Schillaci

About 1,400 pre-1978 units still standing

The prevalence of older coal-fired power plants in the United States is remarkable when one considers that 35 years ago, a critical part of the Clean Air Act (CAA) Amendments was based on the assumption that within a few decades virtually all of these aged facilities would have been phased out of existence. Also, believing that older plants (defined as those built before August 7, 1977) would not be a factor in future air quality, Congress wrote the amendments without imposing air pollution control requirements on these inefficient facilities. Why, Congress reasoned, would energy companies continue to operate relatively small plants when so much of the energy in coal was being lost as pollution?

Congress instead chose to focus on what it envisioned as the future of electric power in America—new power plants that could be more cost effectively designed and constructed from scratch with air pollution controls. As Congress saw it, older plants could be a part of that future if the operators decided to upgrade them. In such cases, a CAA provision called new source review (NSR) would require that pollution controls be installed on the modernized or expanded facility. In either case, lawmakers expected that well before the new millennium, virtually all fossil-fuel power plants in the nation would be equipped with control devices that would substantially reduce criteria air pollutants such as SO2, NOx, ozone, and particulate matter.

Cost factor

As history has shown, rarely has Congress been so wrong about industrial trends that would affect the environment. Congress may very well have failed to anticipate the high cost of both building new power plants and installing pollution controls on older plants. But energy companies were far less motivated than expected to shut down facilities that were statutorily exempted from permitting and the requirement to install pollution controls that could cost more than $100 million per unit in addition to maintenance costs. Even with their poor efficiency ratings, it became financially preferable to continue operating older plants than replace them with extravagantly expensive new facilities that also required costly air permits.

The situation was not altogether ideal for utilities, which found that many older units–some had been built as early as the 1930s–required substantial maintenance to keep operating for even relatively short periods of the year. The CAA had anticipated this situation and allowed plants to retain their unpermitted status as long as work performed on them was limited to routine maintenance. Conversely, any work that expanded the capacity of the plant or resulted in an increase in regulated emissions would be considered a major modification and would trigger NSR permitting. Disagreements over the meanings of these two phrases resulted in the Clinton administration filing lawsuits against 32 power plants that allegedly were undertaking major modifications without obtaining permits, in some cases, over a period of 20 years, while the energy companies insisted they were engaging in routine maintenance only. The EPA has made multiple attempts to resolve the major modification regulations, and the U.S. Supreme Court entered the fray with a 2007 opinion. But until Congress specifically addresses the matter with new legislation, disagreements are likely to continue.

GAO’s comparison report

Regardless of disagreements over definitions, older power plants that were supposed to have vanished from the horizon remain in abundance. In fact, in a recent review of 3,443 operating fossil-fuel electricity generating units, the Government Accountability Office (GAO) found that 1,485 older operating units accounted for 45 percent of electricity produced by all fossil-fuel power plants. While some of these units have pollution controls, many have none. Some older plants are used only during peak demand, but still generate air pollution disproportionately high for the number of hours they operate.

The GAO report provides many informational comparisons between older and newer plants, particularly regarding air emissions and electrical capacity and generation. Specifically, the GAO reviewed data from units that (1) listed a fossil fuel (coal, natural gas, or oil) as a primary fuel; (2) generated electricity in 2010; and (3) had a net summer capacity greater than 25 megawatts (MW), making them subject to EPA emissions monitoring and reporting requirements. The report relied on data in the Ventyx Velocity Suite EV Market-Ops database, a proprietary source containing consolidated energy and emissions data from the EPA, the Energy Information Administration, and other sources. The GAO’s main findings are summarized below.

• In 2010, fuel combustion by electric utilities was responsible for about 65 percent of SO2 emissions and 16 percent of NOx emissions from all sources nationwide. Electricity generation was also responsible for 39 percent of CO2 emissions from all sources in 2009.
• Scrubbers are the most common technology for reducing SO2 emissions, capable of up to 99 percent removal. Low-NOx burners and selected catalytic reduction (SCR) equipment are among the more common NOx control technologies. Removal efficiencies are about 40 percent to 45 percent for low-NOx burners and up to 95 percent for SCR. For a typical coal unit with a capacity of 700 MW, the cost of installing scrubbers ranges from $269 million to $329 million and $108 million to $129 million for SCR, plus operating and maintenance costs. Operation of emissions controls can require additional electricity from the unit, which reduces the amount of electricity available for customers.
• Older units generated 45 percent of the electricity from fossil-fuel units in 2010 while emitting 75 percent of SO2, 64 percent of NOx, and 54 percent of CO2. For each unit of electricity generated, older units collectively emitted about 3.6 times as much SO2, 2.1 times as much NOx, and 1.3 times as much CO2 as newer units.
• Units that began operating in the 1960s generated 12 percent of electricity in 2010 while emitting 26 percent of SO2, 21 percent of NOx, and 15 percent of CO2 in that year. Units that began operating in the 2000s produced 26 percent of electricity in 2010 and generated 1 percent of SO2, 3 percent of NOx, and 15 percent of CO2.
• Units built in the 1960s emitted an average of 7.8 pounds of SO2 and 2.5 pounds of NOx per MW-hour of electricity generated, whereas units built in the 2000s emitted an average of 0.1 pounds of SO2 and 0.2 pounds of NOx per MW-hour.
• CO2 emissions rates have also declined among newer units in the last several decades, although to a smaller extent. For example, units that began operating in the 2000s emitted CO2 at a rate of 1,016 pounds per MW-hour, about 53 percent less than units that began operating in the 1980s.
• The switch to natural gas has had a powerful effect on emissions. On average, in 2010, coal-fired units–both older and newer–produced over 90 times as much SO2 per unit of electricity as natural gas-fired units in 2010. Compared to natural gas units, coal units also produced over twice as much CO2 and over five times as much NOx per unit of electricity in 2010.
• In the late 1960s and 1970s, oil played an important role in energy generation. However, rising oil prices forced many oil-fired units into retirement. In 2010, all oil-fired units accounted for less than 1 percent of electricity from fossil-fuel units. Another factor in the reduction of oil as a source of electrical power was passage of the Fuel Use Act of 1978, which restricted construction of new power plants using oil or natural gas as a primary energy source. After repeal of those provisions in 1987, use of natural gas by the electric power sector increased by more than 240 percent. In 2010, natural gas units accounted for approximately one-third of the electricity generated by fossil-fuel units. Most of this natural-gas-based generation—about 78 percent—came from units that began operating in 2000 or later. Conversely, most coal-based generation—about 66 percent—came from units that have been operating more than 30 years. After rising in the early 2000s natural gas prices have again fallen in recent years; trends in natural gas prices will likely influence decisions about the future composition of the fleet of generating units.
• Only 26 percent of older coal-fired units had SO2 controls compared to 63 percent of newer coal-fired units. Use of NOx controls was more common. Among older units, 38 percent had no controls for NOx compared to 6 percent of newer units. Older units were also less likely to have installed SRC, the most effective option for NOx control; specifically, about 14 percent of older units had SCR compared to 33 percent of newer units.
• Efficiency is the total heat (fuel) required to generate each unit of electricity. A number of factors can affect a unit’s efficiency, including its design, operation, choice of fuel, use of emissions controls, and the environmental conditions in which the unit operates. On average, units that began operating in 2000 or later were approximately 46 percent more efficient than units that began operating before 1950. Generating units that undergo frequent start-ups use comparatively large amounts of fuel and may be less efficient than units that operate continuously. This partially explains the low efficiency levels of older plants that are operated only during peak demand.
• In certain regions, older units play a more significant role in providing electricity. For example, in the Mid-Atlantic and Great Lakes regions, older units respectively generated 64 percent and 70 percent of electricity coming from fossil-fuel units. Some older units also provide services that help ensure the reliable flow of electricity to certain regions; for example, some older units may be used to help restart the electricity system in the event of a blackout.

The importance of age in regulating fossil-fuel-fired power plants was evident with EPA’s recent proposal to impose a CO2 emissions limit on newly constructed units. The CO2 limits that would be required under the proposal are those that are typically achieved by gas-fired units, and it is not expected that any coal-fired unit would be able to meet the requirements absent advanced technology such as carbon capture and sequestration. Should the proposal as written be issued as a final rule, the expectation is that it will effectively eliminate the possibility of new construction of conventional coal-fired power plants.

GAO’s report, Air Emissions and Electricity Generation at U.S. Power Plants, is at http://www.gao.gov/assets/600/590188.pdf.