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Category — New Source Review (NSR)

Time to Repeal New Source Review? (Up to 30 GW of coal-plant upgrades hangs in the balance)

The typical pulverized coal power plant in the U.S. is about 35 years old, yet the fleet will continue to operate for many years to come. New coal-fired plants, meanwhile, will continue to enter service but at a slow rate. There may not be a future price for carbon dioxide (CO2) given the dramatic scientific and political developments that we are going through, but cheap natural gas makes it difficult to justify the higher up-front costs of a new coal plant.

Still, there is significant new electricity generation capacity is possible from these older plants, perhaps as much as 30,000 MW–twice EIA’s projected growth of coal power over the next two decades. In addition, new technology upgrades have the potential of improving the operating efficiency by 3% to 5%. But the impediment for such win-wins is the risk of a New Source Review violation, years of litigation, and possibly fines.

Given the Obama Administration’s stance against coal, many attendees of the National Coal Council’s December meeting were caught flat-footed when DOE Assistant Secretary for Fossil Energy James Markowsky suggested an exception be made under Clean Air Act’s New Source Review (NSR) program. Mr. Markowsky proposed easing the NSR requirements for power plants that make modifications to improve their operating efficiency–assuming those plants would be good candidates for a later retrofit of a carbon capture and sequestration (CCS) system.

Markowsky’s trial balloon also suggested that candidate plants would already have installed flue gas desulfurization (FGD) systems. The concept is intriguing but doesn’t go near far enough in solving the nation’s energy woes.

NSR Definitions Remain Murky

NSR is the process established by the Clean Air Act (CAA) that requires utilities to add a host of new and expensive emission controls should they make any “major modifications” to the plant that increase emissions. The definition of a major modification has been the subject of numerous court battles since the Clinton Administration yet stills remains murky. Even when upgrades were discussed with the EPA in advance of their installation, Justice has routinely lowered the legal boom on utilities that made common maintenance changes to their plants The usual result has been a decade of legal maneuvering followed by a consent decree agreement where the utility agrees to install new emission controls and pay a fine. [Read more →]

February 4, 2010   2 Comments