1

Technical Support Document (TSD)

for the Transport Rule

Docket ID No. EPA-HQ-OAR-2009-0234

Coal-to-Gas Conversion (C2G)

U.S. Environmental Protection Agency

Office of Air and Radiation

March 4, 2011
2

Coal-to-Gas Conversions (C2G)

Section V in the preamble to the Toxics Rule discusses coal-to-gas conversion 

(C2G) as a retrofit technology option to reduce air pollutant emissions. C2G is provided 

as a retrofit option to all coal boilers larger than 25 MW in EPA’s IPM modeling of the 

Toxics Rule. This retrofit option is comprehensively modeled with explicit retrofit capital 

and O&M costs, pipeline extension costs, and heat rate penalties. As mentioned in the 

preamble, the C2G option was not selected in IPM as an economic choice for coal boilers 

to comply with the Toxics Rule. This TSD provides a brief explanation of the main 

reasons why C2G was not an economic choice. 

The Toxics Rule requires all EGU coal boilers larger than 25 MW to achieve

significant reductions in mercury, HCl, and total PM emissions. In addition to the C2G

conversion option, there are other retrofit options available in IPM to reduce these

emissions. They include activated carbon injection (ACI), flue gas desulfurization (FGD), 

and dry alkali sorbent injection (DSI), any of which can individually or in combination 

make a significant reduction in such emissions.

Table 1 shows the calculated cost-of-electricity (COE) based on characteristics of 

a representative actual “model plant” in the Proposed Toxics Rule policy modeling. The 

model plant represents a 303 MW existing coal unit. The performance and incremental 

costs of the various retrofit options are based on the parameters of actual retrofits offered 

to such a unit in the IPM model.

Table 1 – Incremental cost-of-electricity for retrofit options on a typical model plant

Retrofit Options

Base Unit DSI Dry FGD ACI C2G

Unit size (MW) 303 303 303 303 303

Heat Rate (Btu/kWh) 10,502 10,539 10,656 10,506 11,027

Capital Cost of Retrofit ($/kW) including pipeline 47 507 11 323

Fixed O&M of Retrofit ($/kW) 0.8 8.5 0.0 -8.9

Variable O&M of Retrofit ($/kW) 4.49 1.48 1.83 -0.33

Capital Charge Rate (%) 11.3% 11.3% 11.3% 11.3%

Capacity Factor (%) 80% 80% 80% 80% 80%

Fuel Coal Coal Coal Coal Gas

Fuel Price ($/MMBtu) 2.13 2.13 2.13 2.13 5.74

Incremental Fixed Costs (mills/kWh) 0.9 9.4 0.2 3.9

Incremental Variable O&M Costs (mills/kWh) 4.5 1.5 1.8 (0.3)

Base and Incremental Fuel Costs (mills/kWh) 22.4 0.1 0.3 0.0 40.9

Total Incremental Cost-of-Electricity (mills/kWh) Base 5.4 11.2 2.0 44.5

Note that while the combined capital cost and O&M costs for a C2G retrofit could 

be less than that of a combined retrofit with ACI and either DSI or FGD, the greatly 

increased fuel costs of C2G cause its total incremental COE ($44.5/MWh) to be between 

4 to 22 times the COE impact of the other retrofit options available. The C2G option for 
3

this case is therefore uneconomic under the relative fuel cost projections in IPM 

modeling of the Toxics Rule.

The COE comparison allows consideration of the relative cost-effectiveness of 

using C2G to obtain beyond-the-floor reductions in the emission rates of toxic air 

pollutants. For example, DSI is assumed to achieve 90% reduction of HCl in the Toxics 

Rule modeling, whereas switching the boiler to gas-fired generation would effectively 

reduce 100% of previous HCl emissions. Therefore, for each 100 tons of uncontrolled 

HCl emissions, DSI would capture 90 while C2G would increase that capture further by 

10 tons, which is about an 11% increase in capture – however, the COE impact increases 

by 724%. For a similar comparison on mercury, ACI is assumed to capture 90% while 

C2G would effectively capture 100%, and this 11% increase in capture would be coupled 

with a 2,125% increase in that unit’s COE impact.

For these reasons, EPA does not believe it is cost-effective to require beyond-thefloor emission reductions from coal-to-gas fuel switching in the Toxics Rule.