As reported in Philly.com

NEW YORK (AP) – Electricity prices are probably on their way up across much of the U.S. as coal-fired plants, the dominant source of cheap power, shut down in response to environmental regulations and economic forces.

New and tighter pollution rules and tough competition from cleaner sources such as natural gas, wind and solar will lead to the closings of dozens of coal-burning plants across 20 states over the next three years. And many of those that stay open will need expensive retrofits.

Because of these and other factors, the Energy Department predicts retail power prices will rise 4 percent on average this year, the biggest increase since 2008. By 2020, prices are expected to climb an additional 13 percent, a forecast that does not include the costs of coming environmental rules.

The Obama administration, state governments and industry are struggling to balance this push for a cleaner environment with the need to keep the grid reliable and prevent prices from rocketing too much higher.

 
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“We’re facing a set of questions that are new to the industry,” says Clair Moeller, who oversees transmission and technology for the Midcontinent Independent System Operator, which coordinates much of the electric grid between Minnesota and Louisiana.

Coal is the workhorse of the U.S. power system. It is used to produce 40 percent of the nation’s electricity, more than any other fuel. Because it is cheap and abundant and can be stored on power plant grounds, it helps keep prices stable and power flowing even when demand spikes.

Natural gas, which accounts for 26 percent of the nation’s electricity, has dropped in price and become more plentiful because of the fracking boom. But its price is on the rise again, and it is still generally more expensive to produce electricity with gas than with coal. Also, gas isn’t stored at power plants because the cost is prohibitive. That means it is subject to shortages and soaring prices.

During the brutally cold and snowy winter that just ended, utilities in several states struggled to secure natural gas because so much was also needed to heat homes. Some utilities couldn’t run gas-fired plants at all, and power prices soared 1,000 percent in some regions.

As Indiana has reduced its reliance on coal to 84 percent from 97 percent over the last decade, its power prices rose far faster than those of its neighbors and the rest of the country.

That makes things tough on customers, especially big power users like Rochester Metal Products Corp., in Rochester, Indiana. The hulking furnaces it uses to melt scrap iron consume enough electricity to power 7,000 households.

“As Indiana’s price of electricity becomes less and less competitive, so do we,” says Doug Smith, the company’s maintenance and engineering manager.

Burning coal releases toxic chemicals, soot and smog-forming chemicals, as well as twice the amount of carbon dioxide that natural gas produces. The Supreme Court last month gave an important approval to one Environmental Protection Agency clean-air rule. That cleared the way for a new rule expected to be announced by President Barack Obama early next month.

This rule, the first to govern emissions of carbon dioxide from existing power plants, could accelerate the move away from coal – if it survives the legal and political challenges that are sure to come.

Already, the current rules are expected to force power companies to shut down 68 coal plants across 20 states between 2014 and 2017, according to Bentek Energy, a market analysis firm.

The Energy Department estimates coal plants with the output to supply 33 million homes will close by 2020.

“We haven’t operated at those low levels (of generation) for at least 30 years,” says MISO’s Clair Moeller.

To meet high demand this past winter, American Electric Power, which serves 5 million customers in 11 states, needed to run 89 percent of the coal plants it will soon have to shut down, says AEP CEO Nick Akins.

This raises concerns that the power system soon won’t have enough wiggle room to handle extreme weather, making blackouts more likely.

“It’s a warning of what may be to come,” Moeller says.

EPA administrator Gina McCarthy, responding to critics, notes that pollution also imposes costs on the economy because it harms human health and the environment. And she has also forcefully promised that the coming carbon dioxide rule will keep costs in check and power flowing.

“EPA is not going to threaten electric reliability,” she told a gathering of executives in Houston in March. “That is our No. 1 priority.”

Richard Sedano of the Regulatory Assistance Project, which advises officials on regulatory policy, says the transition to cleaner sources can be smooth with proper planning.

States, utilities and the federal government have helped reduce the need for more power plants through efficiency programs and standards for energy-conserving lights and appliances. Utilities are building new transmission lines and updating grids. And customers are generating more of their own power with solar panels and managing their consumption through digital meters and other technology.

Also, power prices across the U.S. are relatively low compared to those in the rest of the developed world. Adjusted for inflation, the national average residential price is nearly 30 percent lower than in 1984.

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AP Writer Rick Callahan contributed to this story from Indianapolis. Jonathan Fahey can be reached at http://twitter.com/JonathanFahey

Read more at http://www.philly.com/philly/business/20140521_ap_891faa766ac6481e83c27218163d9f69.html#tolTWlyZPxKedr5v.99

H. JOSEF HEBERT | June 19, 2009 05:16 AM EST 

 


WASHINGTON — Finding an economical way to capture carbon dioxide from existing coal burning power plants is key to getting China to reduce its greenhouse gas emissions as well as for U.S. efforts to combat global warming, says a study being released Friday.

The report by the Massachusetts Institute of Technology concludes that the United States cannot meet its targets for stabilizing greenhouse gases unless it finds a way to economically capture carbon dioxide emissions coming from existing coal-burning power plants.

coal plants generate about half of the country’s electricity and 80 percent of the nearly 2 billion tons of carbon dioxide released annually into the atmosphere from power production. China also relies heavily on coal for electricity production and in the last five years has been on a rush to build new coal plants _ none of them designed to capture carbon dioxide.

“There is no credible pathway towards stringent greenhouse gas stabilization targets without CO2 emission reductions from existing coal power plants,” says the report. Members of Congress, where a bill to limit U.S. greenhouse gas emissions could come up for a House vote as early as next week, were being briefed on the MIT report.

Carbon dioxide has been captured and put into the ground in relatively small scale projects _ mostly in connection with enhanced oil recovery, for years, but never in the huge volumes that would be needed to capture emissions from a large coal plant.

The MIT report says there are multiple technologies being explored for carbon capture, but the government still has not adequately supported carbon capture research and is moving too slowly to develop large demonstration projects to show that capturing carbon dioxide and injecting it into the ground will work at the scale needed.

The report, a copy of which was provided to The Associated Press in advance of a press conference Friday, says the federal government and industry need to “dramatically expand” its support for carbon capture research and development to the tune of $12 billion to $15 billion over the next decade. 

Such technology, if shown to work in U.S. plants, could get China to reduce greenhouse gases from its rapidly growing network of coal burning power plants, the report says.

“We’ve got to address the carbon emissions from our current fleet (of coal plants) and also have to think how the technology we develop can be applied in China,” Ernest Moniz, director of the MIT Energy Initiative and co-author of the report, said in an interview.

Together, the U.S. and China account for 20 percent of the world’s carbon dioxide from coal burning power plants, said Moniz. If China doesn’t address emissions from its coal plants “we really can’t address the climate issue in a serious way.”

The MIT report summarizes a consensus view of participants in a symposium sponsored by MIT’s Energy Initiative on the feasibility of retrofitting existing coal plants with carbon capture technology. Participants included 54 representatives utilities, academia, government, public interest groups and industry.

The report said about half of the U.S. coal plants _ most of those producing 300 megawatts or more of power _ may be suitable for carbon capture technology. Many of the smaller plants, accounting for about 30 percent of electricity production, can achieve emission reductions through increased efficiency, use of a mix of coal and biomass as fuel and other measures. Other plants, especially the oldest, may have to be replaced, said Moniz.

Wayne Leonard, chief executive of Entergy Corp., who was a co-chairman of the symposium, said the symposium’s conclusions should be viewed “in an international context” especially as carbon capture technology development relates to China.

“In the U.S. coal is the reality. But in China and India it is the future” and they won’t abandon it because of climate change, said Leonard. “But offering them a technological solution, a solution that we are actively developing and deploying ourselves on our own coal plants, would be something that has a far better chance of success in getting them to act.”

While Entergy, the New Orleans-based utility, relies on coal for less than 10 percent of its electricity production, it was a co-sponsor with MIT of the carbon capture symposium on which Friday’s report is based.