EIA electricity generator data show power industry response to EPA mercury limits

Operators invested $6.1 billion from 2014 to 2016 to comply with MATS, environmental regulations

New data from the US Energy Information Administration shows that power generators are spending billions to comply with environmental regulations in an increasingly competitive marketplace.

Coal-fired generating capacity in the US dropped from 299 gigawatts at the end of 2014 to 276 GW as of April 2016.

Coal-fired generation’s share of total electricity generation fell from 39 per cent in 2014 to 28 per cent in the first four months of 2016.

EIA recently released preliminary data from its annual survey of electric generators (EIA-860), which provides information on pollution control equipment at electric power plants.

A significant number of electric power plants recently installed such equipment in response to the US Environmental Protection Agency’s Mercury and Air Toxics Standards (MATS) according to the US Energy Information Administration.

Mercury and Air Toxics Standards establishes emissions limits for toxic air pollutants associated with coal combustion such as mercury, arsenic, and heavy metals.

Mercury and Air Toxics Standards requires all coal generators that sell power and have capacity greater than 25 megawatts to comply with specific emission limits by April 2015, although some units received extensions.

Although hundreds of coal generators have capacities below 25 MW, those units collectively represent less than 1 per cent of total coal capacity.

 

These changes can be attributed to a mix of competitive pressure from low natural gas prices and the costs and technical challenges of environmental compliance measures.

Between Jan. 2015 and April 2016, about 87 GW of coal-fired plants installed pollution control equipment and nearly 20 GW of coal capacity retired.

Twenty-six percent of those retirements occurred in April 2015, the Mercury and Air Toxics Standards rule’s initial compliance date.

Most remaining coal plants applied for and received one-year extensions that allowed them to operate until April 2016 while developing compliance strategies. If a coal unit did not meet requirements by then, it had to either retire, switch to another fuel, or cease operation.

A few plants, totaling 2.3 GW, received additional one-year extensions, giving them until April 2017 to comply. About 5.6 GW of coal capacity fuel switched primarily to natural gas.

Of the 87 GW of coal capacity that installed pollution control equipment to comply with the Mercury and Air Toxics Standards, activated carbon injection was the dominant compliance strategy.

More than 73 GW of coal-fired capacity installed activated carbon injection systems in 2015 and 2016, effectively doubling the amount of coal capacity with activated carbon injection.

As a capital investment, activated carbon injection systems are relatively modest, with an average cost of $5.8 million per generator over 2015 and 2016.

Other compliance strategies include the modification of existing emissions control equipment, the addition of new equipment or capabilities, or some combination of operational changes and new investments to improve mercury capture or to achieve other environmental control objectives, such as reducing emissions of particulate matter or nitrogen oxide.

Many generators may have installed more than one type of equipment.

Overall, operators invested at least $6.1 billion from 2014 to 2016 to comply with MATS or other environmental regulations.

Although EIA’s data are preliminary, 98 per cent of coal capacity status is reported to EIA on a monthly basis, meaning the uncertainty associated with the values presented here is relatively small.