Green Guru Network

The Proposed Emission Standard

The NSPS’s proposed emission standard for new EGUs with a capacity of at least 25 megawatts (MWe) is 1,000 pounds of CO2 per megawatt-hour (lb/MWh). This standard is based on measured performance of natural gas combined cycle (NGCC) plants, which the USEPA finds to be the system that yields the least GHG emissions. This technology-based standard contains a rigid emission limit for such GHGs from new proposed EGUs, typical of command and control. There is no alternative to meeting this standard, such as procuring credits under a cap and trade system.

While the proposed rule does not ban the use of any other particular fuel, the USEPA clearly shows it favors natural gas, as its analysis shows that it is “cleaner”, highly available, and relatively cheaper in price. NGCC, the USEPA feels, will be the standard design for new EGUs for the next decade or two for economic reasons, such as it is a less expensive technology to install and the fuel’s wide availability.

High Level of Flexibility

However, this proposed rule certainly contains a wide amount of flexibility, given its rigid emission limits. A new EGU that burns coal can meet this standard and operate, but only if it successfully installs carbon capture and sequestration (CCS) and implements it to capture at least half of the CO2 in the exhaust. While CCS is currently under development (there is no successful CCS installation on an operating coal-fired EGU), the rule would still allow a new coal-fired EGU to be built, as long as the applicant promises to operate CCS in the future. How can that be given that the 1,000 lb/MWh standard cannot be met by CCS currently? Because the rule allows an operator to meet the emission standard over a 30-year averaging period. An operator can operate a new coal-fired plant without CCS and install it later. CCS must be planned in the initial pre-construction permit application. The 1,000 lb/MWh may be successfully met over a 30-year period of operation. For example, a coal-fired EGU without CCS can meet a GHG emission standard of 1,800 lb/MWh for the first 10 years, followed by meeting a 600 lb/MWh standard the remaining 20 years with CCS to meet the overall 30-year average limit of 1,000 lb/MWh. The USEPA is doing this to keep options open for the coal industry. There is no apparent discussion of contingencies in case the future development of CCS technology does not succeed in meeting, say, a 600 lb/MWh level in the long-term future.

The proposed NSPS standard does not apply to simple cycle gas plants (typically, “peakers” used only during periods of high electrical demand) or EGUs that burn biomass or co-fire with a fossil fuel. The proposed standard also does not apply to future modifications or major modifications of existing EGUs, even of coal-fired units. This may result in power companies modifying and expanding their existing units as much as possible and not investing in building new plants, even if electricity demand continues to rise.

The USEPA is also allowing additional flexibility in this proposed rule by providing a one year extension of the effective date. Normally, a new NSPS rule would go into effect for all proposed new plants with NSR pre-construction permits issued and construction commenced by the April 13, 2012 date of publication in the Federal Register. Instead, the rule will go into effect 12 months after that date, April 13, 2013. In other words, a new coal-fired EGU with an approved pre-construction permit that has begun construction before April 13, 2013 would not be subject to the new NSPS standard.

Next Steps

With publication in the Federal Register the “clock” for the proposed rule has started. The proposed rule is now open for public comment until June 12, 2012. The USEPA may modify the draft rule as it sees fit based on public comments. The USEPA’s goal is to finalize the rule within one year. However, there is a significant chance of lawsuits by any of a large array of interests against the rule that may slow implementation or even completely block the rule from being implemented.

There is one addition impact of the proposed rule if it becomes finalized as is. With an NSPS standard in place, the 1,000 lb/MWh emission limit becomes the “floor” for any future “Best Available Control Technology” (BACT) analysis for PSD permitting for GHG emissions of a EGU under the Tailoring Rule. Because the NSPS standard only applies to new, and not modified, EGUs, would this also become the BACT floor for existing EGUs undergoing a proposed major modification? Could an EGU undergoing a major modification not be required to meet this standard? This is not clear.