Cleaning Coal

Cleaning Coal

Location: New York
Author: Ken Silverstein, EnergyBiz Insider, Editor-in-Chief
Date: Monday, June 16, 2008
Regulatory pressure is bringing about the improvements. But the bottom line is that major utilities with coal-fired operations are investing in modern pollution control equipment.

While it may not be the ideal solution, it is a step forward. The country is now grappling with how to add generation capacity and specifically the role of coal-fired plants. Pressure is building for those generators to be cleaned up and as a result, industry analysts expect that most such facilities will add scrubbing equipment by the end of the decade or they will shut down. While the costs will be passed on to ratepayers, the plants would produce cleaner energy and the investments in technology would spawn new jobs.

Some high-powered utilities are applying new technologies to clean up their power production. Allegheny Energy, American Electric Power and Duke Energy are among those installing "scrubbers" and other types of equipment in existing or newer coal-fired power plants as a way to reduce harmful emissions.

The moves are all to comply with or exceed the requirements of the Clean Air Act, which requires utilities to implement anti-pollution equipment on all new construction or if they upgrade their older facilities to produce more power or to extend their lives. In some cases, utilities are taking action to meet state requirements.

In AEP's case, it has spent $533 million to install scrubbers at one of its West Virginia plants. That has the potential to reduce sulfur dioxide emissions that cause acid rain by 98 percent. Altogether, the company will spend $3 billion a year through 2010 on environmental technologies at all of its coal-fired plants, including about $70 million at one of them to try and sequester a certain portion of its carbon dioxide emissions.

"These investments not only provide long-term environmental benefits by significantly reducing emissions from our coal-fueled plants, they also extend the environmental life of these low-cost facilities and prevent the need to build thousands of megawatts of new power plants that would exponentially increase electricity prices for our customers," says Michael Morris, chief executive of AEP.

Morris goes on to say that while new generation will be sorely needed to meet the expected growing demand for electricity, the company must still equip its current coal-fired facilities with the latest environmental controls -- a move that is not just ecologically prudent but one that would also prevent the "premature retirement" of those facilities.

The utilities have stepped to the plate, albeit they have been forced by federal and state and laws. The Clean Air Act, in fact, is credited with reducing harmful emissions from power plants by 29 percent since 1970. Requiring scrubbers would do even better. But they cost about $100 million each and millions more to operate. That said, about 140 scrubbers function at about 540 coal plants.

Scrubbing Devices

Power plants are among the biggest polluters, releasing 11.4 million tons of sulfur dioxide, or 62 percent of the acid rain emitted. They also spew 5.2 million tons of nitrogen oxides, or 21 percent of the smog, all according to the U.S. Environmental Protection Agency. Scrubbers remove sulfur dioxide by injecting a mixture of limestone and water into the emissions stream after it leaves the boilers.

Allegheny Energy is now spending $550 million to install scrubbers at it coal-fired units in Pennsylvania and West Virginia -- projects that it expects to be completed by 2010. It is part of a settlement with regulators. But the end result is that both its sulfur dioxide and mercury emissions will be sharply reduced.

After three years, meantime, Duke Energy has finished installing scrubbing devices at one of the nation's largest coal facilities in North Carolina, at a cost of $500 million. It's all part of a state law passed in 2002 that requires utilities operating there to significantly cut their sulfur dioxide and nitrogen oxide emissions.

All told, 14 coal-powered plants operate in the state, with Duke and Progress Energy each owning 7 of them. For its part, Duke says that its sulfur dioxide emissions will be lessened by at least 95 percent. Progress says that it will install scrubbers on at least five of the seven plants that it controls. Separate equipment will be installed to cut nitrogen oxide emissions, which is a central cause of ozone-related respiratory illness.

The moves by Duke, however, have not absolved it of criticism. It is planning to go forward on an 800-megawatt coal-fired generator in the western part of the state. Several environmental groups have asked the courts to stop the $2.4 billion project, saying that it would violate federal clean air laws. In a concessionary move, the company did say it would close four older coal generators once the project is finished in 2012. It also notes that it expects to build a coal gasification plant in Indiana, which purports to remove all pollutants before they go out the smokestack.

If coal is to continue to fire most of the nation's power generators, then environmental organizations insist that plants use the most sophisticated pollution controls available. That would also include investing carbon capture and sequestration technologies. Most such groups, however, are dubious of coal's prospects and insist that federal and state guidelines favor sustainable forms of generation.

"Utilities must produce electricity that is clean, reliable and affordable -- three critical but sometimes conflicting priorities that require a delicate balancing act," says Duke's CEO Jim Rogers, a shareholder's meeting. "We face tough realities and difficult choices."

Obviously, there's no magic wand. In time, older coal-fired units will be retired. For now, it appears that the industry will comply with federal and state laws and work to clean them up. It is clear, though, that all future plants will minimize emissions by using cutting-edge technologies.