Testimony To EPA on Carbon Rule for New Coal and Gas Power Plants, Feb. 6, 2014

Richard H. Ball, Retired Energy Policy and Technology Analyst

SUMMARY OF FINDINGS AND RECOMMENDATIONS

I support the proposed NSPS rule as a very important step forward in reducing U.S. carbon emissions and a signal to the rest of the World about our seriousness in mitigating global warming and ocean acidification. However, I believe the proposed regulations are quite conservative and it would be possible and desirable to strengthen and improve upon this rule in several key respects, as follows:

• The rule for natural gas plants could be made more stringent to better reflect the best available technologies for generating electricity from natural gas. For example, many new CCGT plants in service achieve

carbon emissions of less than 8001b/MWh g ro..l.z 

### Natural gas effectively is getting a 

### free ride on CO2 control.

• The proposed coal plant standard, while a huge step forward, still appears weaker than it should be since it is based on only a 40% crapture rate by CCS equipment. Several coal plants under construction and desfgns exist for all types of new coal plants with CCS that incorporate capture rates of up t 90%. Such plants with 90% capture translate to COz emission rates ess uc than 300 lb/MWhgoss.i It probably would be economical y inefficient to build a coal plant with a more modest rate of capture and then have to require a later major retrofit to a higher level when it becomes necessary to reduce carbon

emissions even further in the future.

• Greenhouse gases (GHG) other than COz should be taken into account, especially methane (which is the major component of natural gas) and considerable leakage occurs in the natural gas production and use cycle.

• If CCS is applicable to coal-fired power plants, in theory it should be even more applicable to natural gas-fired CCGT plants because it is technically easier and more cost-effective to apply carbon capture to more thermally efficient plants (although none appear to have actually been demonstrated). Designs for NGCC with 90% capture indicate COz emission rates of less than 1001b/MWh (net or gross). 1

• From a systems perspective, several other attributes of power plants than just lb of COz per kWh at the stack affect the overall contribution to the electric grid. These attributes potentially could be evaluated and possibly included in an integrated rule, at least in a future iteration of the NSPS. They include:

1o Ability of the plant to ramp power output up and down rapidly to respond to grid needs, which can greatly affect the ability to integrate intermittent renewables into the grid and the need to operate higher emitting sources such as peaking turbines or old coal and gas plants (thereby further reducing greenhouse gas emissions beyond those of the unit in question).

o Consideration of fuel cycle emissions of GHGs from production of natural gas and other fuels used in power plants. That might place natural gas plants on a more level playing field with other fuels and thus be viewed as more fair. (However, in accounting for methane emissions in general, EPA should use a more realistic formula for its impact than the simple GWP 100-year estimate of 21, which is now out of date and does not reflect the latest atmospheric chemistry nor its short-term impact, which can lead to effective GWP values greater than 100.)

• However, since some of those improvements might complicate the regulatory process and since basing the coal standard on partial implementation of CCS arguably will have little or no practical effect in the next few years, I would urge EPA to move forward with the rule as proposed in preference to delaying the process, but preferably with tighter numerical limits. More far-reaching improvements should be considered for implementation in the next few years.

• EPA and other agencies of the Federal Government should be moving forward to analyze the overall longer-term impacts of all fossil plants that may be constructed in the near future and considering whether effort should be put into encouraging demonstration of CCS technology applied to natural gas plants.

DISCUSSION

Natural Gas Standard.

In the case of carbon emissions from natural gas plants, it is clear that, short of CCS, the technology for reducing emissions cannot be separated from the overall generation technology: there does not seem to be a separate control technology as such. Hence it is appropriate for EPA to identify a level of BSER in terms of an emission stiindard that is specific to the best performing generation technology. The natural gas power plant NSPS rule does not appear to me fully to reflect the best performing CCGT natural gas plants currently available on the market. Annual average data from several new power plants indicate they achieve gross rates of

about 780 lb/MWh g ,oss , well below the proposed NSPS rule. z Hence, basing the rule on the best units should permit a standard much lower than 10001b/MWh.

2Peaking turbine units, not included in the rule, are less efficient and thus achieve

poorer emission rates. However, some new CCGT units (e.g., GE's F1exEfficiency units) have much better ramp-up and down performance and thus could also serve some of the load following functions for which peaking turbines are now applied, thus reducing the need for stand-alone peaking turbines. They also have greater potential to perform load following and thus assist integration of intermittent renewables such as wind and solar power into the grid. Perhaps credit for such technology could be incorporated into the formula for an overall carbon standard. (While it is not clear how to do that in the context of a pure NSPS standard, it might be factored into the future rule for reducing overall carbon emissions from electricity production from new and old units within some utility system or state, depending how that rule is formulated.)

EPA argues that a CCS-based standard for natural gas plants cannot be justified at this time because the technology has not been tested. That is unfortunate from a CO2-mitigaton strategy perspective because many new CCGT gas plants currently are being built and they may continue to operate for decades into the future when accelerated reductions in GHG emissions will become necessary. In addition, the amount of upstream emissions of inethane from natural gas production activities currently is controversial, potentially greatly increasing the total GHG footprint of these plants. If implemented as proposed, it will be important to revisit this standard ASAP and for the Federal Government to implement policies to demonstrate CCS on such plants so that future regulation is possible. A neglected issue in decision-making on new plant installations is whether they should be designed and sited so that future retrofit with CCS is feasible, which does not appear to be the case for plants that have recently been built or proposed in my state of Virginia.



### Coal Standard.

Carbon ernissions will depend on the degree of COz capture, which in turn will affect costs and net energy output Capture rates in plant engineering designs assume that up to 90% removal is feasible from different coal technologies, ranging from IGCC to conventional PC subcritical combustion. For all the five coal technologies studied by DOE/NETL, CO2 emissions varied from well under to just slightly over 2001b/MWh (about one fifth of the 11001b proposed standard). For purposes of a longer-term carbon mitigation strategy it makes sense to me to set a higher standard so that no coal plants are built that are economically suboptimal due to the need to later retrofit them or else suffer the climate impact consequences of continued operation at much higher emissions than necessary. However, EPA makes the case that partial CCS implementation at much less than 90% capture might not pass all the BSER criteria of adequate demonstration and cost Setting a higher removal/lower emission standard might jeopardize the standard. Given the need for prompt action to curb CO2 emissions, it arguably makes sense to proceed with the proposed standard. Again, I believe this standard should be re-visfted

3ASAP and revised to be more stringent as soon as more data on demonstrated CCS

systems is available to justify it.



### Conclusions

It appears that natural gas CCGT plants are getting a free pass on CO2 controls. Justification for a standard of 10001b/MWh appears inadequate in view of current CCGT technology already in widespread operation. This is not a technology forcing

standard.

Since CCS is not required for natural gas, the proposed standards effectively favor natural gas over solid fossil fuels and thus exacerbate the current competitive advantage of natural gas over coal and continue its advantage over carbon-free renewable sources. While EPA justifies the proposed standards by the current technological situation, strategically this will lead to over-dependence on natural gas investments that will persist in time and make carbon mitigation policy more difficult in the future at a time when U.S. and global GHG emissions. In addition, unless much more stringent regulations and greatly improved industry best practices can reduce fugitive emissions of inethane in the natural gas fuel cycle, especially gas production and processing, purported advantages of natural for electricity production are likely to be an illusion. EPA Carbon rules for both existing and new plants, augmented by other government policies, will be required to achieve a satisfactory degree of GHG mitigation or the stock of power plants, including natural gas plants built in the near future, will seriously undermine mitigation efforts.

1 "Cost and Performance Baseline for Fossil Energy Plants Volume 1: Bituminous Coal and Naturral Gas to Electricity°, Revision 2a, September 2013, DOE/NETL-2010/1397

2 "How Stringent is the EPA's Proposed Carbon Pollution Standard for New Power Plants?" By Matthew J. Kotchen* and Erin T. Mansurt, NBER, August 3, 2012.

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