The Clean Power Plan's effect on coal

August 12, 2015 | By Barbara Vergetis Lundin

The federal Clean Power Plan (CPP), which targets the carbon emissions of fossil fuel-producing power plants, will have a negative impact on the United States' coal industry, with the potential loss of up to 60 gigawatts (GW) of coal power capacity by 2020, according to research and consulting firm GlobalData.

Credit: leungchopan

Of the 326 GW of current coal power capacity in the U.S., around 20 GW is expected to retire in the next five years and an additional 30 to 40 GW will find it difficult to meet the emission standards set by the U.S. Environmental Protection Agency (EPA), GlobalData predicts.

"Despite a decline in coal-based power generation over the last decade, coal generated around 39 percent of U.S. electricity in 2014 and remains the largest source of carbon emissions. However, with the CPP's aim of reducing emissions by 32 percent by 2030 from 2005 levels, coal will continue to decline," said Pavan Vyakaranam, associate power project manager, GlobalData.

GlobalData believes the future U.S. power sector will try to balance low-cost natural gas power with clean power generation from renewable sources.

In 2014, natural gas contributed around 27 percent of total U.S. power generation, hydropower accounted for six percent, and other renewables -- including wind, solar, biopower and geothermal power -- had a seven percent share.

While increasing renewables will require substantial investment, some states, such as Texas and California, have successfully increased renewable capacity and could encourage others to follow their lead.

"With the U.S. boasting significant renewable power potential, the CPP has created a huge opportunity for companies in this sector. Additionally, natural gas would benefit with new investment, as well as with the conversion of some coal power plants to gas," Vyakaranam said. "On the other hand, independent power producers and utilities with high exposure to coal in their portfolios will lose out, particularly those companies which operate the fleet of ageing coal power plants, as it is highly likely that these facilities will not meet the new EPA standards."

The American Coalition for Clean Coal Electricity (ACCCE) has blasted both the plan and President Obama about the reliability impacts -- and the legality -- of the rule, saying that "EPA's rule packs a double punch, as it will also force an additional 49,000 MW of electricity supply to close, according to EPA's own calculations. This is more than the entire electricity supply of New England. The Federal Energy Regulatory Commission -- the independent agency tasked with protecting the reliability of our nation's energy transmission system -- has been outspoken in its concerns about the serious reliability impacts of the rule."

For more:
- see this report

http://www.fierceenergy.com/story/clean-power-plans-effect-coal/2015-08-12