EGU GHG NSPS Proposal

Briefing for OMB / Interagency Working Group

July 11, 2013

Kemper County Energy Facility – 75% complete in April 

2013 – Coal IGCC unit in MS will capture 65% CO2for EOR.

Great Plains Synfuels Plant – Coal gasification 

facility in Beulah, ND has been capturing 50% CO2

for EOR use since 2000. 

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Overview

► Reaction to Original Proposal

► New Approach for EGU GHG NSPS Rulemaking

► Best System of Emission Reduction (BSER)

► Standards for New Fossil Fuel-fired Boilers and IGCC Units

► Standards for New Natural Gas-fired Stationary Combustion Turbines

► Units Not Subject to a CO2 Standard

► Other Key Components of the Rule

► Compliance flexibilities

► Endangerment finding

► Conventional coal projects currently under development (e.g. transitional 

sources)

► Economic Analysis

► Appendix

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Reaction to Original Proposal

► EPA received almost 2.7 million public comments on the 

proposed rule – the most ever received for any EPA proposal 

► Industry and some others opposed the approach of setting a 

“fuel neutral” standard

► Opposed combining sources into a common subpart and finding 

NGCC to be the BSER for all new fossil-fired EGUs serving 

intermediate and baseload demand

► Claimed that this was inconsistent with previous agency action

► Claimed that EPA should make separate BSER findings for natural 

gas-fired and coal-fired sources – and set separate standards

► Environmental groups and some others generally supported 

proposed approach; some suggested that EPA should require 

deeper GHG reductions and cover all fossil-fired EGUs (e.g., 

also cover “peaking units”)

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New Approach for EGU GHG NSPS Rulemaking

► Issue a final action that rescinds previous proposal and, at the 

same time, issue a new proposal with a revised approach 

► Propose separate standards of performance for sources within 

existing subparts

► Stationary combustion turbines within subpart KKKK

► Fossil fuel-fired boilers and IGCC units within subpart Da

► Make separate BSER findings for sources within each subpart

► Do not set standards for modified or reconstructed units at this 

time

► Preamble makes it clear that nothing in the proposal sets a floor for 

BACT for modified and reconstructed units

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Best System of Emission Reduction (BSER)

► CAA §111 - Standard of performance should reflect the degree of 

emission limitation achievable through application of the “best system of 

emission reduction which (taking into account the cost of achieving such 

reduction and any nonair quality health and environmental impact and 

energy requirements)... has been adequately demonstrated.”

► Four Key Factors in BSER Determination

► Feasibility – system of emission reductions must be technically feasible

► Costs – costs of the system must not be unreasonable

► Size of reductions – EPA may consider the amount of emission reductions 

the system would generate

► Technology – designed to promote the implementation and further 

development of technology

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Standards for New Fossil Fuel-fired Boilers and 

IGCC Units (Subpart Da)

► Level of standard

► Find that partial CO2 capture using CCS is the BSER for these new units

► Propose a limit of 1,100 lb CO2/MWh based on partial capture from flue gas or 

syngas stream

► Request comment on a range from 1,000 – 1,200 lb CO2/MWh

► Emission standard must be met on a 12 operating-month rolling average

► Partial capture CCS meets the criteria of BSER

► Feasibility – a number of examples in operation, under construction and or 

under development most notably:

• Great Plains Synfuels Plant – North Dakota

– Capturing 50% of CO2for more than 10 years

– Gasification component of IGCC

• Kemper County Energy Facility (582 MW IGCC) – Mississippi

– 65% capture

– Under construction (over 75% complete)

• Boundary Dam (rebuild;110 MW PC) – Canada 

– 90% capture

– Expected to be in operation by Spring of 2014

► Costs – comparable to cost of other generation technologies meeting similar 

function (see next slide)

► Size of reductions – range of CO2 capture needed to meet standard (25 – 40%)

► Technology – promotes development of CCS

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Standards for New Fossil Fuel-fired Boilers and 

IGCC Units (cont.) 

► Cost of generation when CCS is added to achieve the 1,100 lb/MWh 

standard of performance

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Notes: 

• Low EOR price = $20/ton + TSM costs; High EOR price = $40/ton + TSM costs

• Cost for IGCC units based on GE gasifier using bituminous coal; coal price = $2.94MMBtu

• Cost for coal-fired units does not reflects 3% cost adder to account for uncertainty regarding future carbon liability 

(consistent with EIA methodology); with these adders, SCPC costs $92/MWh and IGCC costs $112/MWh

Technology

Cost of Electricity

($/MWh) Data Source

Natural gas combined cycle unit @ $5.0/MMBtu 52 DOE/NETL

Natural gas combined cycle unit @ $10.0/MMBtu 86 DOE/NETL

Supercritical pulverized coal unit w/o CCS 81 DOE/NETL

Supercritical pulverized coal unit + 39% CCS 110 DOE/NETL

Supercritical pulverized coal unit + 39% CCS + low EOR 96 DOE/NETL

Supercritical pulverized coal unit + 39% CCS + High EOR 88 DOE/NETL

Supercritical pulverized coal unit + 90% CCS 147 DOE/NETL

Integrated gasification combined cycle w/o CCS 97 DOE/NETL

Integrated gasification combined cycle unit + 25% CCS 109 DOE/NETL

Integrated gasification combined cycle unit + 25% CCS + Low EOR 101 DOE/NETL

Integrated gasification combined cycle unit + 25% CCS + High EOR 97 DOE/NETL

Integrated gasification combined cycle unit + 90% CCS 136 DOE/NETL

Nuclear 103-114 EIA

Biomass 97-130 EIA

Geothermal 80-99 EIA
Standards for New Fossil Fuel-fired Boilers and 

IGCC Units (cont)

► Other options considered:

► Based on super-critical boiler or IGCC unit

• Does not result in meaningful emission reductions

• Does not help advance low GHG coal-based technologies (and may hinder 

them)

– More difficult for many regulated utilities to get rate recovery for 

emission levels not legally required

► Based on full (i.e., 90%) implementation of carbon capture and storage 

(CCS)

• Not as well demonstrated as partial capture

• Considerable cost ($136/MWh to $147/MWh without revenue from EOR)

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Standards for New Natural Gas-fired Stationary 

Combustion Turbines 

► Propose standards for subcategories based on turbine size

► Find modern, efficient NGCC units to be BSER

► Propose a limit of 1,000 lb CO2/MWh for units greater than 850 MMBtu/hr (~ 100 MWe 

turbine)

• Request comment on a range from 950 – 1,100 lb/MWh

► Propose a limit of 1,100 lb CO2/MWh for units less than or equal to 850 MMBtu/hr

Request comment on a range from 1,000 – 1,150 lb/MWh

► Consistent with emission data (which shows that smaller turbines are less efficient) and 

with existing subcategories in subpart KKKK (for criteria pollutants)

► Compliance demonstrated on a 12 operating-month rolling average basis

• New, modern NGCC units can meet these proposed emission limits with no add-on control 

technology

► Reject CCS as BSER because we do not have the information to determine if it is 

technically feasible

• No large scale projects in operation or under development

• Challenges of implementing CCS on units with large amounts of cycling

• Differences in composition of flue gas stream

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Compliance Flexibilities

► EPA wanted to provide owners/operators flexibility on when and 

how they install and operate add-on CCS technology

► Original proposal

► Offered 30-year averaging alternative compliance option for new 

coal- and petcoke-fired EGUs

► New proposal

► Propose 60 operating-month rolling average alternative compliance 

option 

• Emission limit would be more stringent (request comment on a range 

between 1,000 - 1,050 lb CO2/MWh)

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Endangerment Finding

► Original proposal

► Determined that a new endangerment finding was not necessary

► New proposal

► No endangerment finding is necessary

• We are not proposing to list a new category of sources

► Rationale will include: 

• Reliance on existing GHG endangerment record

• Brief review of new assessments by the National Academies

• Brief summary and response to major arguments by commenters in 

preamble

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Geologic Sequestration Requirements

Verifying that captured CO2is geologically sequestered

Providing a mechanism to demonstrate that use of captured CO2 in 

enhanced oil recovery (EOR) can qualify as geologic sequestration 

(GS) 

► Original proposal

► In original proposal, there were no requirements that tied existing GS 

regulations for accounting to NSPS compliance

► New proposal

► Subpart RR of EPA’s Greenhouse Gas Reporting Program (GHGRP) 

provides a mechanism for facilities to demonstrate GS using existing 

regulatory framework 

► This proposal includes provisions that CO2 captured at an EGU must be 

reported in accordance with GHGRP under subpart PP (CO2 supply) and 

subpart RR (Geologic Sequestration)

► Seek comment on this approach and on alternative uses of captured CO2

• Propose that any alternative would need to demonstrate permanent storage 

to a similar degree as geologic sequestration

• Propose that alternatives could not be used until EPA finalizes a mechanism 

for that alternative to demonstrate permanent storage of CO2 

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Conventional Coal Projects Currently Under Development

► Three potential sources

► One publicly stated it is still deciding whether to proceed:

• Wolverine (MI)

► Two submitted information suggesting they have commenced 

construction for NSPS purposes:

• Holcomb (KS) 

• Washington County (GA)

► New Proposal

► Wolverine:

• Specifically exclude Wolverine and take comment on whether to later:

– Separately propose making project subject to 1,100 lb CO2/MWh standard

– Separately propose subcategory with alternate CO2 standard

► Holcomb and Washington County:

• Both are existing sources, if current information is correct

• Explain that, if they have NOT commenced construction, they would be 

treated like Wolverine

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Economic Analysis

► The economic analysis is based on projections (by EPA, EIA and 

others) that, at least through 2030, the only new, unplanned coalfired EGUs that will commence construction will include CCS

► With these forecasts, the rule has no cost impact

► Additional scenarios (e.g., higher gas prices and higher demand) 

provide similar results through 2020

► Performed comparison of costs and benefits of coal with and without 

partial CCS

► Coal with partial CCS had positive net benefits when:

• Revenue from EOR and social cost of carbon at the 3% discount rate with lower 

primary health co-benefit estimate

• No revenue from EOR and social cost of carbon at the 3% (95th percentile) 

discount rate with higher primary health co-benefit estimate

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Appendix

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Original Proposal

► Published on April 13, 2012 (77 FR 22392)

► Proposed to create a new subpart (TTTT) that includes certain 

sources from subparts Da (boilers and IGCC units) and KKKK 

(stationary combustion turbines)

► Proposed a single “fuel neutral” standard of 1,000 lb CO2/MWh

► Found natural gas combined cycle (NGCC) technology to be the 

best system of emission reduction (BSER) for all new fossil fuelfired EGUs serving intermediate- and base-load demand

► Proposed to exempt simple cycle turbines and all new EGUs in 

non-continental areas (Hawaii and U.S. territories)

► Did not propose standards for modified or reconstructed units

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Current Full-Scale CCS projects 

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Project Location Type Status

Great Plains Synfuels Plant Beulah, ND Coal gasification w/ 

50% CCS

Has been capturing CO2for 

EOR since 2000

Kemper County Energy 

Facility Kemper Co, MS Coal IGCC w/ 65% CCS April 2013 - 75% complete

Boundary Dam Integrated 

Project

Saskatchewan, 

Canada

Coal-fired PC boiler w/ 

90% CCS

Under construction; 

expected operation in 2014

Texas Clean Energy Project Odessa, TX Coal IGCC w/ 90% 

CCS

Signed construction and plant 

output contracts 

Hydrogen Energy California Kern Co, CA Coal/petcoke IGCC w/ 

90% CCS

Nearing decision on PSD 

permit
Status of Potential Transitional Projects Identified in Original 

Proposal

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Project (State) Project Type Development Status

Potential Transitional Sources with CCS

Power County (ID) Gasifier with CCS Not an EGU

Taylorville (IL) IGCC with CCS PSD permit withdrawn

Cash Creek (KY) IGCC with CCS Converted to NGCC project

Good Spring (PA) IGCC with CCS Converted to NGCC project

Texas Clean Energy (TX) IGCC with CCS Announced contracts to commence construction; capable of 

meeting proposed standard

Trailblazer (TX) SCPC with CCS Development status canceled; capable of meeting proposed 

standard

Potential Transitional Sources Without CCS

Washington County (GA) SCPC without CCS Announced contracts to commence construction (but no 

applicability determination)

Holcomb (KS) SCPC without CCS Announced contracts to commence construction (but no 

applicability determination)

De Young (MI) CFB without CCS Replaced by NGCC project

Wolverine (MI) CFB without CCS Remains under development; no contracts announced

Coleto Creek (TX) SCPC without CCS Canceled

Limestone (TX) SCPC without CCS Canceled

White Stallion (TX) CFB without CCS Canceled

Bonanza (UT) CFB without CCS PSD permit never effective; developer submitted information to 

DOE identifying project as canceled

Two Elk (WY) PC without CCS State agency has treated as having commenced construction

Other Sources Identified by Developers

Mesaba (MN) IGCC without CCS Converted to NGCC project

Las Brisas (TX) CFB without CCS Permitting process suspended by developer

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2012 Proposal vs. 2013 Proposal

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Category 2012 Proposal 2013 Proposal

Differences

Standards:

• Combustion Turbines

• Utility Boilers and IGCCs

• Same for both • Separate standards

Utility Boilers and IGCCs • 1,000 lb CO2/MWh • 1,100 lb CO2/MWh

Large vs. Small Combustion Turbines • Same for both: 1,000 lb CO2/MWh • Large: 1,000 lb CO2/MWh

• Small: 1,100 lb CO2/MWh

CFR Subparts • Create new subpart (TTTT) • Use separate existing subparts (KKKK 

and Da)

BSER Determination • No separate determination • Separate determination for gas 

turbines and boilers/IGCC units

Remote non-continental EGUs • Exempted all units in non-continental 

areas

• Non-gas fired turbines exempted 

regardless of location

Similarities

Source category contribution • Category significantly contributes to 

GHG emissions

• Category significantly contributes to 

GHG emissions

Primary economic analysis • No cost (because no new coal)

• No impact on electricity prices

• No cost (because no new coal)

• No impact on electricity prices

Treatment of modified and 

reconstructed sources

• Standards do NOT apply • Standards do NOT apply
Key Legal Considerations for BSER

► Feasibility

► Senate report makes it clear that it did not intend that the technology 

“must be in actual routine use somewhere.” The essential question 

was, would the technology be available for installation on new plants

► Costs

► “EPA’s choice [for BSER] will be sustained unless the environmental 

or economic costs of using the technology are exorbitant”

► Size of reductions

► Goal is “reducing emissions as much as practicable”

► Technology

► Goal is “forc[ing] the development of improved technologies”

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