Pending greenhouse gas regulations cloud the future of coal-burning power plants. But electric utilities are investing to keep large facilities going.
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 underway 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, including a dozen in Minnesota over the next few years. Utility executives say the large coal plants will be needed for a long time, and investing in air pollution controls to cut emissions like mercury still makes sense. Coal generates about 40 percent of the U.S. electrical supply.
On a hilltop 3 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 new 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 air 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.”
Use coal plants less?
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. They includes plants in Cohasset, Minn., Alma, Wis., and Genoa, Wis.
In June, the Obama administration ordered the U.S. 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 also 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 like wind power — strategies already employed in Minnesota, Lashof said.
“On average, you would run coal plants less,” he said.