October 5, 2012 / 8:10 PM / 7 years ago

US can save $100 bln if EPA flexible on power plant rules-study

* EPA regs could cost economy $275 bln in 2010-2035
    * EPRI wants a couple more years to comply with rules
    * Cheap natgas could cause 100 GW of coal retirements

    Oct 5 (Reuters) - The U.S. electric power industry's
research arm released a study on Friday saying power companies
could save the economy about $100 billion between 2010 and 2035
if U.S. pollution rules were more flexible.
    The Electric Power Research Institute (EPRI) estimated it
would cost the U.S. economy up to $275 billion to meet current
and pending U.S. Environmental Protection Agency (EPA)
regulations from 2010-2035 if the current timeline is followed.
    The study released Friday was an update of a study issued in
    The EPA wants electric companies to reduce power plant
emissions, reduce the amount of water used to cool generating
facilities and regulate the handling and storage of coal ash.
    EPRI said its proposed "flexible path" would reduce costs
while achieving the same level of compliance.
    Under the current course, EPRI said as little as 203
gigawatts (GW) of existing coal-fired capacity would remain
financially viable, with up to 61 GW retired or converted to
burn other fuels.
    In EPRI's "flexible" alternative, 288 GW of coal generation
would remain financially viable with only 36 GW retiring or
converted to burn other fuels.
    The United States has about 1,039 GW of generating capacity,
including about 317 GW fueled by coal. A gigawatt represents
1,000 megawatts. One megawatt is enough power for about 1,000
    Power generators have already said they would plan to shut
more than 30 GW of coal-fired generation between 2012 and 2016,
EPRI said citing federal data. See Reuters factbox on coal units
to retire or convert to other fuels 
    EPA regulations require controls be in place to reduce
mercury by about 2015, sulfur dioxide by about 2015, nitrogen
oxide by about 2018 and cooling water intake by about 2018.
    Under EPRI's flexible approach, the utilities would get a
couple more years to reduce the emissions.
    Separately, EPRI said its study was very sensitive to
natural gas prices.
    If natural gas prices average $6.50 per million British
thermal units (mmBtu) from 2010-2035 as the U.S. Energy
Information Administration (EIA) has forecast, EPRI estimated
about 55 GW of coal capacity could retire or convert to other
    But if natural gas prices average $8.50 per mmBtu from
2010-2035, EPRI forecast just 30 GW of coal could retire or
    And at an average natural gas price of $4.50 per mmBtu over
that time, EPRI forecast over 100 GW of coal could retire or
    Over the past decade, natural gas has traded in a wide range
from less than $2 per mmBtu to more than $15, averaging about
$6. The current spot cost is $3.40.
    The biggest coal fired generating companies in the United
States include units of American Electric Power Co, Duke
Energy Corp, Southern Co, Xcel Energy Inc
, GenOn Energy Inc and FirstEnergy Corp.
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