DOE Official Floats NSR ‘Carve-Out’ for Some Coal Plants

The Energy Department’s top fossil energy official said [in December that] he might seek exemption or relaxation of “new source review” requirements for certain U.S. coal-fired power plants that are boosting efficiency through retrofits if the plants are also good candidates for subsequent installation of carbon capture and storage systems.

And in a related development, Energy Secretary Steven Chu [in December] awarded almost $1 billion in cost-share funds to three projects to demonstrate advanced, commercial-scale coal technologies with carbon capture and storage (CCS), a process seen as key to continued widespread use of coal given worldwide concern about the buildup of carbon dioxide (CO2) and other greenhouse gasses in the atmosphere.

DOE awarded $334 million to a team led by American Electric Power Co. that is developing a CCS project at AEP’s Mountaineer coal plant near New Haven, W.Va.; $295 million to a project led by a subsidiary of Southern Co., that is retrofitting a Southern coal plant in Alabama with CCS; and $350 million to Summit Texas Clean Energy LLC for CCS technologies that will be deployed at a planned 400 megawatt coal plant in Texas.

Meanwhile, DOE Assistant Secretary for Fossil Energy James Markowsky appeared to float a trial balloon [on Dec. 4] on a linked and controversial policy matter: the Clean Air Act’s new source review (NSR) provisions, which require utilities to install new pollution controls if they make major modifications to power plants that result in increased emissions.

“We think there is an opportunity of maybe carving out part of the fleet and having a relaxation [of new source review standards] so we can do things that we feel we can do with existing technologies and increase their efficiency and…reduce CO2,” said Markowsky in a presentation to the National Coal Council (NCC), a panel of mostly industry officials that advises the energy secretary on coal matters.

Markowsky expanded slightly on his idea to reporters after his presentation.

“If it’s attractive to [the Environmental Protection Agency], maybe we can carve out a fleet….. Say, for instance, you have part of the fleet that has high probability of being retrofitted with carbon capture and storage in the future—[they] would be good candidates to improve their efficiency right now,” Markowski said.

EPA is not currently re-writing underlying NSR rules, but the agency is fielding comments from an advisory committee on the subject and it is unclear whether the Obama administration wants to re-work the controversial rule, which utility officials have long complained is hindering them from making needed upgrades and expansions of coal plants.

Pressed on what plants might be good candidates for loosened NSR rules, Markowsky pointed to plants that have installed flue gas desulfurization (FGD) technology, which strips sulfur dioxide from coal plant smokestack emissions.

“Right now, half the fleet is retrofitted with FGD; if they are going to be excellent candidates for CCS, maybe that part of the fleet should be candidates for allowing them to enhance their efficiency right now with just a routine kind of upgrade of equipment.”

Asked if he meant those plants should be fully exempted from NSR review, Markowsky appeared to say that NSR requirements should at least be loosened.

He said the good CCS-candidate plants should be allowed to make efficiency improvements “without going through the kind of process that would trip a lot of other things because that right now is holding back the industry from doing these types of enhancements.”

Markowsky told reporters that the idea is just a “concept.” But he told the coal council in his presentation that “we [DOE] are working very closely with EPA on that [NSR]” and that he had a meeting on the subject with EPA officials scheduled for [Dec. 11].

Coal-burning utilities have attacked EPA enforcement of NSR requirements in numerous lawsuits, largely by arguing that federal law makes clear that NSR should not apply to plant modifications that constitute routine maintenance.

The Bush administration re-wrote the NSR rules to that effect, only to have the federal courts scrap the rules as unlawful.

The Obama administration has yet to indicate how it will move on the matter, and Markowsky’s comments appear to indicate a new NSR-related initiative for the new DOE leadership.

In an initial reaction to Markowsky’s comments, some environmentalists panned it.

“This notion he is floating is nowhere on EPA’s radar screen by any of the public indicators,” said John Walke, director of the Natural Resources Defense Council’s Clean Air Program. “These kinds of proposals are code for allowing utilities to increase smog and soot in exchange for marginal improvements in energy efficiency.”

The CCS grants announced [in December] are among the largest DOE awards to date to help develop carbon capture technologies.

The AEP-led project will deploy a chilled ammonia CCS process expected to capture at least 90 percent of the CO2 in a 235 MW flue gas stream at the existing 1,300 MW Mountaineer plant. The captured CO2 will be transported by pipeline and injected into saline formation near the capture facility. Besides AEP, the project includes APCo, Schlumberger Carbon Services, Battelle Memorial Institute, CONSOL Energy, Alstom and an advisory team of geologic experts.

The Southern project, led by Southern Company Services, will install CO2 capture technology on a 160 MW flue gas stream at Plant Barry, located north of Mobile, Ala. Project partners include Mitsubishi Heavy Industries America and Schlumberger Carbon Services.

The Summit Texas project will integrate Siemens gasification and power generating technology with CCS technologies to capture 90 percent of the CO2 at a 400 MW plant to be built near Midland-Odessa, Texas.

Jeff Beattie is a reporter for COAL POWER’s sister publication, The Energy Daily, where this story originally appeared.

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