By Ed Crooks in New York
New controls on carbon dioxide emitted by power stations proposed by the US Environmental Protection Agency would ban the construction of new coal-fired plants lacking costly special equipment.
The regulations are the latest move in the EPA’s drive to regulate CO2, thought to contribute to global warming, which has led to the agency coming under fire from Republican politicians and some industry organisations.
The EPA said in a statement: “Greenhouse gas pollution threatens Americans’ health and welfare by leading to long lasting changes in our climate that can have a range of negative effects on human health and the environment.”
Business groups said the proposal would drive up energy prices and damage jobs and investment. Coal plants account for about a fifth of the new generation capacity the US is expected to add during 2010-15.
The EPA rules would apply only to new plants. Existing plants, which generated 42 per cent of US electricity last year, would be unaffected, as would plants set to start construction within the next 12 months.
Lisa Jackson, the agency’s administrator, told reporters: “We don’t have plans to address existing plants.”
She added: “If we were to propose a standard for existing plants, it will be informed by an extensive transparent process ... [to] adopt the common sense approach that ... ensures that any standard is achievable.”
The rules for new plants, covering all fossil fuel generators larger than 25 megawatts, impose a limit of 1,000 pounds of carbon dioxide emitted for each megawatt hour of electricity generated. That level will make it impossible to build new coal-fired plants without equipment to capture and store at least some of their emissions.
Carbon capture technology as applied to coal-fired plants is still in its infancy and faces obstacles in terms of cost and public acceptability.
Modern gas-fired plants, however, would generally be allowed without any additional modifications.
Research for the UK government last year suggested that a typical modern combined cycle gas turbine plant would emit about 780 pounds of CO2 per megawatt hour, while an advanced “supercritical” coal plant would emit about 1,600lbs per MWh.
The EPA’s move formalises a trend away from coal-fired power generation that has been driven by market forces because of the low cost of natural gas resulting from the shale revolution.
The share of electricity generated from coal in the US fell to near a 35-year low last year as utilities shifted to cheaper gas.
The US is set to add only 9,300MW of coal-fired generation capacity during 2010-15, according to the government’s Energy Information Administration, compared to about 14,000MW for each of gas-fired capacity and renewables such as wind and solar power.
Over that period, US coal-fired capacity is expected to drop by 6 per cent, the EIA says, but will still be 289,000MW in 2015.
Kevin Kennedy of the World Resources Institute, an environmental think-tank, urged the EPA to tackle existing plants as well.
He said: “Existing plants represent a significant opportunity to improve efficiency and reduce US greenhouse gas emissions. We can achieve these reductions at low cost while providing power plants flexibility in complying with them.”
The EPA has already increased the pressure on existing plants with a series of new rules intended to curb smog, acid rain and other toxic pollution.
Bruce Josten of the US Chamber of Commerce, the business group, said the EPA proposals showed that President Barack Obama’s administration’s energy policy was not “all of the above”, as the administration has described it, but “some of the above”.
He added: “Today’s announcement is another in a long string of actions this administration has taken that weaken our energy security and raise energy prices.”
He also said the chamber was “evaluating all of its options to overturn this rule if it is ultimately issued”, including legal action.
The Heartland Institute, a free-market group, said the “big winner” from the new rules would be “Obama’s good friend, GE chairman Jeff Immelt”.
With solar and wind power unable to fill the gap left by 50,000MW of coal-fired generating capacity that is set to shut down, it said, the result would be more investment in new gas turbines, supplied by General Electric.
“This move reeks of more crony capitalism hiding behind the dubious cloak of eco-purity,” the institute said.
An announcement expected from the administration on Wednesday may show a more supportive stance on fossil fuels. Ken Salazar, the interior secretary, plans to reveal “next steps for potential energy development” off the US Atlantic coast, a move that may clear the way for oil and gas development in the region, which is presently closed to drilling.