Page D 1

Section D:

Projected Impacts on Generation and Fuel Use
Coal Production for Electricity Generation in 1990 and Page D 2 

2000 and Projected Production with Clear Skies in 2020 

West 

Interior 

Appalachia 2000 Actual 

2020, Clear Skies 

Coal Production for the Power Sector 

Scale: Appalachia 2000 = 299 million tons 

Notes: 2020 national coal production projections are EPA estimates from IPM. 1990 data is from the Coal Industry 

Annual 1994, Table 4 (DOE/EIA-0584 (2000)). 2000 data is from the Coal Industry Annual 2000, Table 4 and Table 63 

(DOE/EIA-0584 (2000)), January, 2002. 2020 production for the power generation sector is derived from the 

Integrated Planning Model. 2020 production for other sectors is derived from the National Energy Modeling System. 

In 1990, EIA did not report the coal produced for power generators. From 1998-2000, 85% of coal produced was for 

the power generation sector. For an estimate of coal produced for the power generation sector in 1990, EPA assumed 

the same percentage (85%). 

Note: The analysis presented represents EPA’s estimates. 

likely show different impacts. 

 EIA’s modeling would 
Page D3 

Coal Production and Coal Miner Employment

� Under Clear Skies, coal production shifts to the Interior and Appalachian regions, 

which require considerably more labor for mining. 

Coal Production for the Power Sector 

(million tons) 

Region 2000 Clear Skies in 2020 

Appalachia 299 305 

Interior 131 220 

West 475 473 

Total 905 998 

Data for 2000 is from EIA's Coal Industry Annual, Table 63 

� Coal miners, a group sensitive to possible changes in future fuel consumption, 

would see an increase in job opportunities. 

Notes: 

Change in Coal Mining Jobs, Relative to the Base Case 

Coal Producing Region 2020 

Appalachia 1,194 

Interior 2,836 

West -1,033 

Net Change 2,997 

1) Changes to coal miner jobs is the difference between coal miner employment in the policy case and the base case.

2) Coal miner productivity taken from EIA’s Coal Industry Annual 2000. Coal miner productivity increases vary (2.1%-2.8%).

3) Data reflects employment and employment changes for EGU coal production only (roughly 85-90% of total coal production).

4) The base case in IPM includes Title IV, the NOx SIP Call, NSR settlements, and state-specific caps in CT, MA, MO, NC, NH, TX, and WI. It does not include mercury MACT in 2007 or any

other potential future regulations to implement the current Clean Air Act.
Page D4 

Projected Generation Mix in 2020

Note: Projections are from EPA’s modeling using IPM. Coal units with SO2 and/or NOx controls includes units with advanced post-combustion SO2 and/or NOx controls (scrubbers for SO2 

removal and SCR or SNCR for NOx removal). Coal units without SO2 and/or NOx controls could include PM and/or NOx combustion controls. The base case in IPM includes Title IV, the 

NOx SIP Call, NSR settlements, and state-specific caps in CT, MA, MO, NC, NH, TX, and WI. The “Other” category includes generation from nuclear, hydro, solar, wind, geothermal, 

biomass, landfill gas, and fuel cells. Control technology percentages are approximations. SO2 controls include a very small amount of IGCC. 

Note: The analysis presented represents EPA’s estimates. EIA’s modeling would likely show different impacts. 
Page D 5

Projected Generation Mix in 2010 & 2020

Projected Generation Mix in 2010 

-

1,000 

2,000 

3,000 

4,000 

5,000 

6,000 

Base Case in 2010 Clear Skies in 2010 

TWh 

Coal Oil/Gas Nuclear Other Hydro 

Projected Generation Mix in 2020 

-

1,000 

2,000 

3,000 

4,000 

5,000 

6,000 

Base Case in 2020 Clear Skies in 2020 

TWh 

Coal Oil/Gas Nuclear Other Hydro 

Note: Projections are from EPA’s modeling using IPM. The base case in IPM includes Title IV, the NOx SIP Call, NSR settlements, and state-specific caps in CT, MA, MO, NC, NH, TX, 

and WI. The “Other” category includes generation from solar, wind, geothermal, biomass, landfill gas, and fuel cells. 

Note: The analysis presented represents EPA’s estimates. EIA’s modeling would likely show different impacts. 
Page D6 

Projected Coal Capacity with Further Emissions Controls

• In 2020 with Clear Skies, 81% of all coal-fired capacity is 

projected to have one or more of the following: selective 

catalytic reduction (SCR) for NOx, flue gas desulfization 

(scrubbers) for SO2, and/or activated carbon injection (ACI) 

for mercury. Of this capacity, 34% is due to Clear Skies. 

There will be about 300 GW of coal-fired units in 2020. 

• Graphics show cumulative capacity with existing controls, 

controls projected to be retrofitted under the NOx SIP call, 

NSR settlements and state enacted programs, CAA Title IV, 

and controls projected to be retrofitted with Clear Skies. 

Note: The analysis presented represents EPA’s estimates. EIA’s modeling would likely show different impacts. 
Page D 7 Units Repowering and Uneconomic to Maintain Due 

to Clear Skies 

• The IPM model can determine that specific generating units are uneconomic to maintain, based on 

their fuel, operating and fixed costs, and whether they are needed to meet both demand and 

reliability reserve requirements. 

• In practice, units projected as uneconomic to maintain may be "mothballed“, actually retired, or kept 

in service to ensure transmission reliability in certain parts of the grid. Our modeling is unable to 

distinguish between these potential outcomes. 

• “Repowering” converts units to combined-cycle natural gas or IGCC. 

COAL 

• Relative to the Base Case, Clear Skies modeling is projecting that about 5.2 GW of coal-fired 

capacity will no longer be economic to maintain and that over 100 MW will repower to natural gas. 

• 54 units at 30 different coal plants are projected to be uneconomic as a result of Clear Skies. 

• Most of these units are a part of larger plants which include multiple units that are expected to 

keep generating. Only four plants are projected to have all of their units uneconomic to 

maintain, and only one of these is larger than 110 MW. 

• The uneconomic units are not concentrated in one or two states – the state with the most 

uneconomic capacity has only 19% of the total. 

• Units < 100 MW are 45% of the uneconomic coal unit capacity and 88% of the units. 

Coal Units (GW) Uneconomic Repowering 

Base Case 1.0 0.0 

Clear Skies 6.2 0.1 

Note: All uneconomic determinations take place in 2005, repowerings to natural gas in 2010 
Page D 8 Units Repowering and Uneconomic to Maintain Due 

to Clear Skies 

OIL/GAS STEAM 

• Clear Skies is expected to result in slightly less oil/gas steam units which are uneconomic to maintain 

and about the same level of repowering relative to the base case. 

Oil / Gas Steam Units Uneconomic Repowering 

(Cumulative GW) 2005 2010 2005 2010 2015 2020 

Base Case 30.7 30.7 0.0 2.1 4.1 4.1 

Clear Skies 29.1 29.1 0.0 2.3 3.8 4.1 

EFFECT OF OVERBUILD 

• The uneconomic coal plants are a consequence of the overbuild of new gas-fired combined cycle 

plants since 2000. A sensitivity analysis run assuming optimal capacity builds from the year 2000 

(rather than the overbuild) projects no coal capacity as uneconomic to maintain. 

• Without the current overbuild, significantly fewer oil/gas steam units are uneconomic to maintain and 

many of those originally deemed uneconomic in 2005 would be repowered in 2010. 

Sensitivity w/o overbuild Uneconomic Repowering 

(Cumulative GW) 2005 2010 2005 2010 2015 2020 

Oil / Gas Steam Units 0.9 2.1 0.0 17.1 20.7 20.7 

Coal Units 0.0 0.0 0.0 0.1 0.0 0.0 
Page D9 

Co-benefits Emissions

• In 2010, mercury emissions 

are projected to be reduced 

to 34 tons based on the 

mercury emission 

reductions that will occur 

from the emission controls 

plants will install to meet the 

SO2 and NOx caps. 

• In 2010, an additional 1 GW 

of scrubbers and 3 GW of 

SCR is projected with Clear 

Skies to comply with the 

mercury cap; these retrofits 

are not projected under a 

*Baseline mercury emissions are projected to decline from 48 tons in 1999 to 45 tons policy scenario that covers

in 2004 after implementation of Title IV and the NOx SIP call. SO2 and NOx only. 

Note: The analysis presented represents EPA’s estimates. EIA’s modeling would likely show different impacts. 
Page D10 

Impact of Changes in IPM Modeling Assumptions 

• EPA has explored the impact of changing assumptions in the model to: 

– AEO 2003 natural gas prices 

– AEO 2003 electricity growth 

– Mercury emission modification factors (EMFs) used by EIA 

• To measure the pure impact of the assumptions, as opposed to the 

safety valve effect, a Clear Skies Case without the safety valve was used 

in IPM modeling of power grid behavior and emissions. With the safety 

valve modeled, the impacts would be smaller than those shown. (The 

sensitivity analysis did not extend to air quality and benefits analysis.) 

• The assumptions used in the sensitivities for natural gas prices, 

electricity growth and mercury removal efficiencies were those used by 

EIA in its 2003 modeling. 
Effects of Assumptions for Natural Gas Prices, Electricity Page D11 

Growth, and Emission Modification Factors (EMFs) 

2010 2020 

• Projected annual costs decline 

or remain about the same when 

the model is run with EIA’s 

natural gas assumptions, 

electricity growth assumptions, 

and/or EMFs. Assumptions 

lead to building much cleaner 

new coal-fired capacity that 

leads to lower overall cost. 

• Annual costs increase less than 

10% by 2020. 

• Coal-fired generation increases. 

• Allowance prices are relatively 

close, except for mercury. 
Page D12 Effects of Assumptions for Natural Gas Prices, 

Electricity Growth, and EMFs 

Projected Marginal Cost of SO2 Reductions ($1999) 

0 

200 

400 

600 

800 

1,000 

1,200 

1,400 

2010 2015 2020 

$/ton 

Clear Skies without safety valve using EPA assumptions 

Clear Skies without safety valve using EIA's assumptions for Growth and Gas 

Clear Skies without safety valve using EIA's assumptions for Growth, Gas, and EMF's 

Projected Marginal Costs of NOx Reductions ($1999) - Zone 2 

0 

250 

500 

750 

1,000 

1,250 

1,500 

1,750 

2010 2015 2020 

$/ton 

Clear Skies without safety valve using EPA assumptions 

Clear Skies without safety valve using EIA assumptions for Growth and Gas 

Clear Skies without safety valve using EIA assumptions for Growth, Gas, and EMF's 

Projected Marginal Costs of NOx Reductions ($1999) - Zone 1 

0 

250 

500 

750 

1,000 

1,250 

1,500 

1,750 

2010 2015 2020 

$/ton 

Clear Skies without safety valve using EPA assumptions 

Clear Skies without safety valve using EIA assumptions for Growth and Gas 

Clear Skies without safety valve using EIA assumptions for Growth, Gas, and EMF's