# Presentation: 457018

## Multi-Emissions Strategies at Electric Power Plants

**J. Alan Beamon**
**Energy Information Administration**

## Numerous Multi-Emission Proposals

- Jeffords
- McCain / Lieberman
- Carper
- Clear Skies
- Some just cover the power sector, while others are broader.
- Some focus on 3-P (SO2, NOx, Hg) while others include carbon.

## Two EIA Multi-Emission Report

- _Reducing Emissions of Sulfur Dioxide, Nitrogen Oxides, and Mercury from Electric Power Plants_, September 2001, prepared at the request of Senators Smith, Voinovich, and Brownback
- _Analysis of Strategies for Reducing Multiple Emissions from Electric Power Plants with Advanced Technology Scenarios_, October 2001, prepared at the request of Senators Jeffords and Lieberman

## The Smith/Voinovich/Brownback Report

- Three emission scenarios
- Each emission targeted at 50, 65, and 75 percent below base, respectively
- NOx and Hg bases are 1997 levels
- SO2 base is Phase II target of the Clean Air Act Amendments of 1990

## The Smith/Voinovich/Brownback Report (contd.)

- Emission reduction programs begin in 2002 with half of reductions occurring by 2007 and full compliance by 2012
- Programs are assumed to cover all generators except industrial cogenerators
- Half of required mercury reductions come from plant specific actions rather than through trading
- Programs are patterned after the SO2 system created in the Clean Air Act Amendments in 1990

## Capacity Adding Emissions Control Equipment Through 2020

**Capacity Adding Emissions Control Equipment Through 2020**

- 0

- 50

- 100

- 150

- 200

- 250

- SO2 Scrubber

- NOx - SCR

- NOx - SNCR

- Mercury Fabric Filter

- Mercury Spray Cooler

**Gigawatts**

- Reference

- 50 Percent

- 65 Percent

- 75 Percent

**Notes:**
Scrubbers
Reference 17.5
50 %         90.0
65 %       127.3
75 %       151.5
With 90 gigs of existing scrubbers approximately 80 % of coal plants to be scrubbed in the 75 % case
SCRs
Reference 91.1
50 %         98.0
65 %       156.3
75 %       218.1

In the more stringent cases the amount of control equipment expected to be added will have to be carefully managed to avoid system reliability (and pricing) problems.  Also, the costs of adding these controls to some older, smaller units could be more than are represented in this analysis.
Note that in the 50-Percent case the amount of NOx control equipment added is less than in the reference case.  This occurs because the reference case includes the 19-State summer SIP call beginning in 2004.

## 1999 and 2020 Coal and Natural Gas Generation

**1999 and 2020 Coal and Natural Gas Generation**

- 0

- 500

- 1000

- 1500

- 2000

- 2500

**Natural Gas**

**Coal**

**Billion Kilowatthours**

- 1999 Level

- Reference

- 50 Percent

- 65 Percent

- 75 Percent

**Notes:**
Coal generation in 2020 is projected to be between 4 and 10 percent below the reference case while gas generation is about the same percentage higher.

However, in all cases coal generation is still projected to be higher in 2020 than it is today.

## 2020 Allowance Prices

**2020 Allowance Prices**

- 0

- 500

- 1,000

- 1,500

- 2,000

- 2,500

- 3,000

- Reference

- 50 Percent

- 65 Percent

- 75 Percent

**SO2 and NOx in 1999 Dollars per Ton**

- 0

- 10,000

- 20,000

- 30,000

- 40,000

- 50,000

- 60,000

- 70,000

- 80,000

- 90,000

**Mercury in 1999 Dollars per Pound**

- NOx

- SO2

- Mercury

**Notes:**
SO2 2020
Reference     200
50 %             719
65 %            1390
75 %            1737
NOx 2020
50 %            1108
65 %            1457
75 %            2825
Mercury 2020
50 %            21119
65 %            41190
75 %            85225

The higher prices in the more stringent cases result from the need to add controls to units where the retrofit costs are higher together with the need to control units that are already relatively clean.

## Average Electricity Prices, 2020

**Average Electricity Prices, 2020**

- 6.13

- 6.22

- 6.35

- 6.48

- 5.9

- 6

- 6.1

- 6.2

- 6.3

- 6.4

- 6.5

- 6.6

- Reference

- 50 Percent

- 65 Percent

- 75 Percent

**1999 Cents per Kilowatt-Hour**

**Notes:**
Price impacts in 2020:
                                           % > Reference
50 %		1.5 %
65 %		3.6 %
75 %		5.7 %

Electricity Demand in 2020
Reference	4763
50 %		4749	0.3 % less
65 %		4736	0.6 % less
75 %		4716	1.0 % less

## Projected Change in Supplier Resource Costs from 

**Projected Change in Supplier Resource Costs from**** **

**Reference Case, 2001-2020**

- 28

- 66

- 89

- 0

- 10

- 20

- 30

- 40

- 50

- 60

- 70

- 80

- 90

- 100

- 50 Percent

- 65 Percent

- 75 Percent

**Billion 1999 Dollars**

**Notes:**
These costs include the costs of retrofitting plants with emissions control equipment, the operations and maintenance costs associated with this new equipment, and the higher cost of fuel due to switching from coal to natural gas.
These costs do not include allowance costs which reflect wealth transfers rather than real economic costs.
Also these costs do not include the costs normally associated with financing and earning a profit on retrofit investments.

## Annual Change in Resource Costs 

**Annual Change in Resource Costs **
**From Reference Case**

- 3.1

- 5.7

- 7.2

- 4.8

- 9.1

- 12.3

- 0

- 2

- 4

- 6

- 8

- 10

- 12

- 14

- 50 Percent Reduction

- 65 Percent Reduction

- 75 Percent Reduction

**Billion 1999 $**

- 2010

- 2020

**Notes:**
When the financing costs and normal profits on investments in retrofits are included the annual resource costs of the emission reduction programs are projected to range between 3.1 and 7.2 billion per year in 2010 and 4.8 and 12.3 billion per year in 2020.

## The Jeffords/Lieberman Report

- Assumed Reductions in NOx, SO2, CO2, Hg
- Four Sets of Technology Assumptions:  AEO2001 Reference and Advanced Technology Cases, and CEF Moderate and Advanced Technology Cases
- Cases With and Without Emission Controls

## Emission Levels, Reference Case Projections for 2010

**and 2020, and Target Caps for Electricity Generators**

**1997**

**2010**

**2020**

**Target**

**0**

**2,000**

**4,000**

**6,000**

**8,000**

**Thousand Tons per Year**

**Nitrogen Oxides**

**6191**

**4340**

**4480**

**1548**

**1997**

**2010**

**2020**

**Target**

**0**

**4,000**

**8,000**

**12,000**

**16,000**

**Thousand Tons per Year**

**Sulfur Dioxide**

**13090**

**9700**

**8950**

**2240**

**1990**

**2010**

**2020**

**Target**

**0**

**200**

**400**

**600**

**800**

**Million MetricTons Carbon Equivalent per Year**

**Carbon**
**Dioxide**

**475**

**691**

**773**

**475**

**1999**

**2010**

**2020**

**Target**

**0**

**15**

**30**

**45**

**60**

**Tons per Year**

**Mercury**

**43**

**46**

**45**

**4.3**

## Emission Allowance Prices in Four Cases, 2020

**(1999 dollars per ton)**

**Mercury in 1999 dollars per pound**

**Sulfur**
**Dioxide**

**Nitrogen**
**Oxides**

**Carbon**
**Dioxide**

**0**

**50,000**

**100,000**

**150,000**

**200,000**

**250,000**

**Reference with Limits**

**Advanced Technology with Limits**

**CEF-JL Moderate with Limits**

**CEF-JL Advanced with Limits**

**Mercury**

**0**

**200**

**400**

**600**

**800**

**1,000**

**Sulfur Dioxide, Nitrogen Oxides, and Carbon Dioxide in**
**1999 dollars per ton**

**221**

**703**

**905**

**662**

**81**

**122**

**58**

**68**

**50**

**153,000**

**187,000**

**234,000**

**198,000**

## Projected Additions of Emissions Control Equipment,

**SO****2**
**Scrubber**

**Selective Catalytic**
**Reduction**

**Selective**
**Noncatalytic**
**Reduction**

**Mercury Fabric**
**Filter**

**Mercury**
**Spray Cooler**

**0**

**20**

**40**

**60**

**80**

**100**

**120**

**Reference**

**Reference with Limits**

**Advanced Technology**

**Advanced Technology**
**with Limits**

**CEF-JL Moderate**

**CEF-JL Moderate with Limits**

**CEF-JL Advanced**

**CEF-JL Advanced with Limits**

**Projected Additions of Emissions Control Equipment,**
**1999-2020 (gigawatts)**

## Change in Coal vs. Natural Gas, Renewable, and Nuclear

**Reference**

**Advanced**
**Technology**

**CEF-JL**
**Moderate**

**CEF-JL**
**Advanced**

**Reference**

**Advanced**
**Technology**

**CEF-JL**
**Moderate**

**CEF-JL**
**Advanced**

**0**

**500**

**1,000**

**1,500**

**-500**

**-1,000**

**-1,500**

**Coal**

**Natural Gas**

**Renewable**

**Nuclear**

**Electricity Demand**

**Change in Coal vs. Natural Gas, Renewable, and Nuclear**
**Generation and Electricity Demand in Four Cases, 2020**
**(billion kilowatthours)**

## Impacts of Emission Limits on Cumulative Resource

**Reference**

**Advanced**
**Technology**

**CEF-JL**
**Moderate**

**CEF-JL**
**Advanced**

**0**

**50**

**100**

**150**

**200**

**Impacts of Emission Limits on Cumulative Resource**
**Costs for Electricity Generators, 2001-2020**
**(billion 1999 dollars)**

**177**

**141**

**162**

**149**

## Electricity Prices, 1990-2020

**1990**

**1999**

**2005**

**2010**

**2015**

**2020**

**2005**

**2010**

**2015**

**2020**

**0**

**2**

**4**

**6**

**8**

**10**

**Reference**

**Reference with Limits**

**Advanced Technology**

**Advanced Technology with Limits**

**Electricity Prices, 1990-2020**
**(1999 cents per kilowatthour)**

**Reference**

**CEF-JL Moderate**

**CEF-JL Moderate with Limits**

**CEF-JL Advanced**

**CEF-JL Advanced with Limits**

## Summary

- Addition of emission reduction equipment is the main response to SO**2**, NOx, and Hg emission reductions
- Reductions in CO**2** require switching from coal to natural gas, and reduced electricity demand
- Average electricity prices rise as much as 33 percent in 2020 under a 4-pollutant strategy, and about 6 percent under a 3-pollutant strategy
- Cumulative incremental resource costs for electricity production range from $141 to $177 billion under a 4-pollutant strategy, and from $28 to $89 billion under a 3-pollutant strategy
- Advanced technology reduces the direct cost of emissions control, but consumers and producers could incur costs of more efficient equipment

## Uncertainties

- Measurement and control of mercury emissions
- Understanding of factors driving mercury emissions is improving but many unknowns remain
- Technologies for mercury removal from coal plants relatively new compared to SO2 and NOx controls
- Ability of lower carbon fuels to replace coal generation