Arizona Public Service’s (APS) plan to close three older coal-fueled units at the Four Corners Power Plant in New Mexico and buy out Southern California Edison’s 48% share of the two remaining units is a creative means of surviving the U.S. Environmental Protection Agency’s (EPA) committed action against coal-fueled generation.

The Impact of Mandatory Upgrades on Utilities’ Bottom Lines

Hamstrung by the EPA’s endless stream of regulatory revelations, utilities are searching for reliable and affordable means of producing power while escaping the imposition of billions in regulatory-related upgrade costs. In this case, APS was facing a $1 billion price tag to meet the EPA’s demands for, among other things, an 80% reduction in nitrogen oxide (NOx) emissions. Required upgrades would have tacked an additional 3% to 4% onto the bills of each APS customer. With its new proposal, APS is now looking at a $295 million outlay to buy the stake in Units 4 and 5 and an additional $290 million for emissions controls.

APS’s proposal was made possible because Southern California Edison is being forced out of coal-fueled generation by stringent state regulations. So, what will be a loss for the people of California, in terms of utility rates and power supply, could work in favor of APS customers as they save more than a half billion dollars, reduce emissions, and end up with more generation capacity than when they started.

This type of switch may be effective for one utility and its customers. However, APS’s situation is unique, and as permitting processes and regulations continue to place a bull’s eye on the development of new coal generation, other utilities will likely lack the option to buy out a competitor’s stake in adjacent plants. So, utilities and rate payers will be saddled with the costs of navigating the latest regulatory maze or be forced to close facilities that regulations and unworkable New Source Review rules are turning into “marginal plants.”

The Coal 2.0 Alliance: Promoting Pre-Combustion Technologies

The members of one American Coal Council committee are offering utilities another option. Their Coal 2.0 Alliance is focused on advancing the development and use of pre-combustion and coal preparation technologies by promoting awareness of their benefits. Pre-combustion technologies produce engineered fuels that result in increased plant efficiency as well as lower sulfur dioxide (SO2), NOx, mercury, and carbon dioxide (CO2) emissions at plants that use them.

A number of processes are in commercial operation and under development that treat coal prior to combustion, making it a cleaner, more efficient fuel. Those processes involve coal preparation (cleaning), upgrading (dewatering with heat and/or microwaves), and treatment with additives to alter combustion characteristics. The environmental benefits of these technologies can be further enhanced if other combustion technologies (oxy-coal combustion) or post-combustion technologies (fabric filters, electrostatic precipitation, and scrubbers) are also used.

Depending on the specific technology employed and the feed coal being used, the energy content of lower rank feedstock coals can be increased from 30% to 200%. Higher energy content equates to more efficient combustion, and studies conducted by the Electric Power Research Institute and the Coal Utilization Research Council indicate that for each 1% increase in combustion efficiency there is a 2.5% reduction in CO2 emissions from power plants. At the same time, emissions of mercury can be reduced from 15% to 90%, NOx can be reduced from 10% to 50%, and SO2 can be reduced 10% to 80%.

Direct emissions reductions are not the only benefits associated with using pre-combustion technologies. They can also aid in fuel sourcing decisions as increasing international demand tightens some coal markets. They can enhance transportation efficiencies, because reduced moisture content can equate to a 30% decrease in load volumes and associated transportation costs. Pre-combustion technologies also can be applied universally for proposed new coal generation and in the existing fleet without additional capital expenditures.

Utilities can rely on pre-combustion technologies to provide a single, consistent fuel resource that has reduced risk of spontaneous combustion, reduced mill demands, and improved combustion characteristics. Those features lead to reduced outages from slagging, reduced need for sootblowing, and reduced unburned carbon loss.

New offerings from Coal 2.0 Alliance members will also aid in meeting state renewable portfolio standards and provide the positive aspects of biomass co-firing, including reduced greenhouse gas emissions. Engineered fuels now offer coal and biomass briquettes/pellets and coal “look alike” products that improve the energy density and reduce the grindability and handling challenges typically associated with biomass.

A Low-Cost Approach to Improving Environmental Performance

Pre-combustion technologies represent an excellent low–capital cost opportunity to significantly improve boiler performance and reduce emissions. This is especially true in cases where utilities are using fuels below boiler design specifications. Engineered fuels provide the opportunity to improve on coal—our most abundant, secure, and affordable fossil energy resource. By applying these technologies along with combustion and post-combustion stage technologies, our coal use will help to power us well into the future.

Jason Hayes, ME Des, is communications director for the American Coal Council (