Last week I wrote about the Environmental Protection Agency’s (EPA) new proposed standard for carbon dioxide (CO₂) emissions from fossil fuel power plants. The long-awaited regulation would limit emissions to 1,000 pounds of CO₂per megawatt-hour (MWh) of electricity produced, essentially guaranteeing that no new coal power plants will be built in the U.S. without carbon capture and storage (CCS) technologies.

Almost 30 percent of U.S. greenhouse gas emissions come from coal power plants. Image source: epa.gov

In an effort to minimize opposition to the proposed standard, the EPA emphasized the limited negative impact on industry, as utility companies are already choosing to invest in natural gas rather than coal plants for new capacity. This is due mostly to abundant new reserves of relatively cheap shale gas extracted through hydraulic fracturing.

So just how accurate are the EPA’s claims that the proposed regulation is in line with industry business-as-usual? Other projections of future coal plant construction support the overall claim that the industry was already moving away from investing in new coal power.

The U.S. Energy Information Administration (EIA) projected there would be “virtually no new coal in [the] reference case [scenario] following several CCS demos.” The EIA reports that there are 9.3 gigawatts (GW) of new coal capacity currently planned by 2015, and none thereafter. Nearly all of this new capacity will be built within the next 12 months and will therefore be exempt from the proposed CO2 standards. Any plants scheduled to begin construction in more than a year will need to include CCS technologies in order to comply with the 1,000 pounds of CO₂ per MWh limit of the proposed EPA regulation. Power plant emissions can be averaged over a 30-year period to meet the regulations, so it is also possible for power producers to build coal plants in the near-term provided they install CCS systems in the future.

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The U.S. Environmental Protection Agency (EPA) proposed the country’s first federal standard regulating carbon dioxide (CO₂) emissions from power plants last week. The introduction of a carbon standard has been long-awaited by the environmental community, and many groups are applauding the proposed rule as an important first step by the U.S. government to tackle climate change.

EPA promotes the clean air and health benefits of carbon regulation on the agency homepage. Image source: epa.gov

The carbon emission standard – which limits emissions to 1,000 pounds of CO₂ per megawatt-hour (MWh) of electricity produced – will apply to future fossil fuel-fired power plants with an installed capacity greater than 25 megawatts (MW); plants that are currently operating or that will begin construction in the next 12 months are exempt.

The average natural gas plant in the U.S. emits between 800 and 850 pounds of CO₂ per MWh, safely within the proposed standard. The average coal plant, on the other hand, emits 1,768 pounds of CO₂ per MWh, which would exceed the standard. However, these existing plants will not be affected by the regulation, and EPA Administrator Lisa Jackson further emphasized that there are currently “no plans” to place standards on CO₂ emissions from existing plants, including future modifications that could increase their emissions. However it is likely that the EPA will regulate carbon emissions from existing power plants at some point down the road, and the proposed standard for new sources is a vital step to ensuring that this will occur.

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Earlier this week, a Committee of Secretaries (CoS) established by Indian Prime Minister Manmohan Singh met to discuss environmental and economic issues facing the country’s electricity generation sector. CoS members included the Principal Secretary to the Prime Minister, as well as representatives from the Ministries of Power, Petroleum, Coal, Environment, and Finance.

The 4,000 MW Tata Power Ultra Mega Coal Power Project at Mundra, photo credit: Flickr - Joe Athialy

The first day’s discussion focused on increasing difficulties of coal power production, including domestic production shortages and import costs. While the availability of domestic and supposedly cheap coal supplies was once cited as a central justification for pursuing coal power in India, which currently supplies about 70 percent of the country’s electricity generation, recent coal shortages, dramatic price increases, and environmental mismanagement by the coal industry have led policymakers, energy developers, and investors to acknowledge the need for the country to pursue an alternative energy path.

In January, an Indian Power Ministry official expressed concerns regarding the pricing scheme of the state-owned coal mining company, Coal India, which would increase the cost of coal power generation by an estimated 35 percent. Coal India is responsible for over 80 percent of the country’s coal production. A Coal India executive cited the need to rework the company’s pricing scheme, as coal prices have recently risen by 50 to 180 percent, depending on fuel quality.

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The 17th Conference of the Parties to the United Nations Framework Convention on Climate Change begins today in Durban, South Africa (Source: UNFCCC).

This week the 17th session of the Conference of the Parties (COP17) to the United Nations Framework Convention on Climate Change (UNFCCC) begins. In Durban, South Africa, delegations from countries around the world will continue negotiating greenhouse gas reductions in order to prevent global warming from spinning out of control. So it is just in time that the International Energy Agency (IEA) releases its latest statistics on global CO₂ emissions.

The provided figures contain CO₂ emission source breakdowns by fuel, sector and region over the period 1971 to 2009. According to the data, nearly two thirds of worldwide emissions come from two sectors – electricity and heat generation (41 percent) as well as transport (23 percent). Remaining emissions come from industrial processes (20 percent), residential (6 percent), and a multitude of additional sources (10 percent). Regarding energy, coal is the leading CO₂ emission source, accounting for 43 percent of those emissions, followed by oil at 37 percent and natural gas at 20 percent.

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Photo: Coyote Springs Generating Station by Portland General Electric

On August 25, my colleagues at the Deutsche Bank Climate Change Advisors and I released a new greenhouse gas (GHG) life-cycle analysis of U.S. coal and natural gas-fired electricity. If you have been following my posts on ReVolt over the last year, you’ll know we began studying this issue after the Environmental Protection Agency (EPA) announced revisions to its methodology for estimating emissions from natural gas systems (basically from the production, processing, transmission, and distribution of natural gas) that resulted in a more than doubling of its estimate for methane emissions from those sources. Methane, in addition to being the primary component of natural gas, is a GHG some 25 times more potent than carbon dioxide over a hundred-year period. Consequently, some analysts have raised concerns that when the actual amount of methane emitted during the entire life cycle of natural gas (an amount which the EPA’s previous methodology apparently underestimated) is taken into account, natural gas might lose its GHG advantage over coal.

Over the past year, a number of new life-cycle analyses have come out that all ask different versions of the question, “How clean is natural gas really, on a life-cycle basis?” Some focus on GHG emissions from shale versus conventional natural gas, while others focus on all natural gas produced in the United States. The life-cycle analyses use different underlying assumptions, methodologies, and sources of data, and nearly all comment on the implications of their findings for the GHG comparison between coal and gas. After all, if the Obama administration is (or at least was) considering a clean energy standard that gave natural gas-fired electricity a half-credit on the basis of its GHG savings over coal, this should be reflected by actual GHG savings.

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If you’ve been following U.S. power industry news for the last few years, you would be forgiven for believing that coal is about to surrender its long-term hold on the electricity sector. Utility after utility has announced plans to retire hundreds and even thousands of megawatts of coal-fired capacity, and to pull the plug on coal plants under development. In the absence of Congressional action, some analysts have even questioned whether just the threat of tighter EPA regulations could be enough to encourage utilities to shut down substantial amounts of coal generation.

But the U.S. Energy Information Administration (EIA), in its 2011 Annual Energy Outlook released this week, is less sanguine about coal’s imminent demise. Although proposed EPA regulations on air emissions, coal ash, and water intake could make a major dent in coal’s market share, the report says, they won’t be enough to end coal’s reign as the largest source of electricity—at least not without a price on carbon dioxide.

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CCS Cost Development

As of mid-April, nine pilot carbon capture and sequestration (CCS) power plant projects were in operation in China, Europe, and the United States. These projects are delivering important insights regarding the prospects for large-scale commercial application of carbon capture in coal and natural gas power plants. No large-scale CCS power plant is in operation yet, but the industry is working hard to push forward with 45 projects in various stages of development.

Although it remains unclear when the first commercial CCS power plant project will start operation, new findings reveal greater certainty about another aspect of CCS development: cost. Several studies in the last few years suggest that CCS in coal and natural gas power plants is far more expensive than was anticipated even just six years ago.

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In recent months, several sources have called natural gas’s greenhouse gas (GHG) emissions reductions potential over coal into question. Because the GHG benefit of a coal-to-natural gas shift in the power sector is a critical assumption in our common conclusion that natural gas can facilitate a reduction in power sector GHG emissions, the Worldwatch Institute and Deutsche Bank Climate Change Advisors are embarking on a joint study to assess the currently available emissions data, develop a rigorous and transparent life cycle assessment of electricity generated from gas and coal, and identify data gaps that must be prioritized in further research.

Why is it commonly held that electricity generated from natural gas is 50-60 percent cleaner than coal, and why is this belief being challenged?

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This is the fourth in a series of blog posts discussing the water-energy nexus.

Natural Gas Wellhead in Pennsylvania - Courtesy of Emily Grubert

Hydraulic fracturing, the technique used to extract natural gas from  shale and coalbed reservoirs, typically uses between 2 and 4 million gallons of water per well over the course of a few days – as much as the city of Washington, D.C. consumes in an hour. With such “unconventional” gas contributing a growing share of U.S. natural gas supplies, this water-intensive process has raised concerns that a large-scale shift in the power sector from coal to natural gas could strain the nation’s water supplies. In a new Worldwatch briefing paper, my coauthor Emily Grubert of University of Texas – Austin and I compare the water needs of electricity generated from coal and natural gas, from the point of fuel extraction to the point of power generation. Our analysis shows that generating a kilowatt-hour of electricity from a combined cycle power plant, even if unconventional gas is used, can consume less than half the water that generating the same amount of electricity from a coal steam turbine plant does.

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The tide may be turning against mountaintop removal coal mining in the United States, as last month marked the first time that the U.S. Environmental Protection Agency (EPA) recommended that a permit for a surface coal mine be repealed. An EPA review of Arch Coal’s proposed Spruce 1 project in West Virginia stated that the project could not be carried forward without adverse impacts to the surrounding Appalachian environment.

Mountaintop Removal Mining

Mountaintop removal is a type of surface mining that removes mountaintops by use of explosives to expose coal ridges. The debris from the blasting typically is dumped into nearby valleys, creating unsightly and ecologically damaging “valley fills.” The adverse environmental effects of mountaintop removal and valley fills include contamination of the soil and local water supply, the burying of streams with coal sludge, and deforestation.

In the United States, mountaintop removal operations are concentrated in the states of Kentucky, West Virginia, Virginia, and Tennessee. So far, some 500 mountains surrounding about 1.2 million acres of forest in central and southern Appalachia have been demolished. An estimated 2,500 tons of explosives are used daily.

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