Coal power plants are getting life extensions
BIG STONE CITY, S.D. — The nation's big coal-burning power plants are not ready to become dinosaurs.
Utilities are making substantial investments to keep their largest coal generating stations operating for decades — and emitting millions of tons of carbon dioxide annually.
Upgrades planned or under way at more than 100 Midwestern coal power plants will reduce emissions of mercury or other air pollutants. But they won't affect greenhouse gas emissions that the Obama administration says it will regulate in 2015 to address climate change.
“Companies are making, in some cases billion-dollar decisions on these plants, and it would be unfortunate if greenhouse gas regulation down the road ends up undermining those investments,” said Eric Holdsworth, director of climate programs for the Edison Electric Institute, a power industry trade group. “That is a very big concern.”
Retrofits to large coal plants are taking place even as utilities are shutting down small, older coal-fired units. Utility executives say the large coal plants will be needed for a long time, and investing in air-pollution controls to cut emissions such as mercury still makes sense. Coal generates about 40 percent of the nation's electrical supply.
FirstEnergy Corp., Pennsylvania's largest electric provider, shocked some in July by announcing it would close Hatfield's Ferry Power Station and Mitchell Power Station in Western Pennsylvania. Combined they produce 2,080 megawatts, but they wouldn't be profitable if the company spent the $275 million it needed to meet new federal mercury and toxic air-pollution standards, the company said.
It will, however, spend $650 million to get its other plants in line, the company said. In the tri-state area power companies are closing a dozen plants, but also doing multi-million-dollar updates on seven others.
On a hilltop three miles west of the Minnesota-South Dakota border, the Big Stone power plant is undergoing a $405 million retrofit, one of the largest such upgrades in the Midwest. This summer, 225 workers are pouring concrete and erecting steel to house air-pollution control equipment. The workforce is expected to double before the job is done in 2015.
Big Stone is a prime example of the class of coal plants the utility industry wants to preserve. They are large, averaging about 350 megawatts, and capable of powering thousands of homes and businesses. Most were built in the 1970s but need mercury or other air-pollution controls to keep operating.
“We have to make our decisions based on what we know today and the laws and the rules that are in place,” said Jan Rudolf, vice president for energy supply at Otter Tail Power, Big Stone's operator.
When the work is finished at Big Stone, its 498-foot-tall smokestack will emit far fewer pollutants, improving air quality as far as 300 miles away in northern Minnesota's Boundary Waters Canoe Area Wilderness. The plant's carbon dioxide output, 2.6 million metric tons a year, won't go down.
As for future greenhouse gas regulation, Rudolf said, “I have been in the business long enough to know you just have to wait and see what comes out.”
Otter Tail Power Co. of Fergus Falls, Minn., and two other utilities that co-own the plant looked at other options to comply with air-quality rules, such as replacing it with a natural gas-burning generator. Those units typically emit about half as much carbon dioxide as coal burners. But the company and Minnesota utility regulators concluded that the retrofit represented the best deal, even if carbon dioxide regulation adds costs in the future.
More than 100 other coal plants on the 11-state Midwest power grid are planning or undergoing environmental retrofits, according to the grid operator.
In June, the Obama administration ordered the Environmental Protection Agency to draft greenhouse gas regulations for existing power plants by next June and finalize them a year later. No practical carbon dioxide-removal technology exists, so the regulations likely will rely on other approaches, such as market-driven incentives. The Obama directive called for regulatory flexibility.
“Those standards are not going to shut down every coal plant in the United States,” said Daniel Lashof, director of climate and clean air programs for the Natural Resources Defense Council, an environmental group that has proposed giving each state a carbon-reduction benchmark.
Greenhouse gas regulation likely will focus on energy conservation and expanding clean sources such as wind power — strategies already employed in some places, Lashof said.
“On average, you would run coal plants less,” he said.
In another era, environmentalists might have applauded utilities such as Otter Tail for reducing mercury and haze-causing emissions at a coal plant. But increasingly, environmental groups say such investments are a mistake because greenhouse gas regulation looms.
“The amount of carbon coming out of these power plants is something a lot of people are not aware of,” said J. Drake Hamilton, science policy director for St. Paul, Minn.-based Fresh Energy, which joined other environmental groups to oppose the Big Stone upgrade. “They are by far the No. 1 source of carbon pollution in the state and in the country. To continue year after year adding to that very negative legacy is not a viable policy.”