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Researched by Industrial Info Resources (Sugar Land, Texas)--Earlier this week, the Environmental Protection Agency (EPA) finalized the Cross-State Air Pollution Rule (CSAPR), or Clean Air Transport Rule, that that was proposed last year. CSAPR replaces the EPA's 2005 Clean Air Interstate Rule (CAIR), which was remanded in 2008. The new ruling addresses sulfur dioxide (SO2) and nitrogen trioxide (NOx) emissions in 28 states--a smaller number than the EPA initially projected, which was 31 states and the District of Columbia. Regulations are standard throughout the 28 states, except for six states where the NOx-ozone regulation remains only a proposal: Iowa, Kansas, Michigan, Missouri, Oklahoma and Wisconsin. Finalization of the proposal in these states is scheduled for October 2011.
The ruling will call for the annual reduction of SO2 and NOx emissions to 6.4 million tons and 1.4 million tons, respectively, by 2014. This would reduce SO2 and NOx emissions 73% and 54%, respectively, from the 2005 levels. The EPA realizes the rule will affect more than 3,642 coal-, oil- and gas-fired generation units. Industrial Info is tracking 887 coal-fired units that will be affected. But approximately 70% of the power generated will come from these coal-fired units in the regulated areas that have or are planning to install state-of-the art SO2 controls, such as scrubbers; 50% of this generation has or will have NOx controls installed, such as selective cataylitic reduction devices (SCRs).
The rule outlines items such as installation of new environmental emission controls; fuel conversions; fuel switching; and the upgrading of existing environmental controls that will help generating units meet the required limits.
The rule is separated into two phases. Phase I, which will go into effect by January 2012, addresses NOx and SO2 emissions. The states affected by the ozone portion of this rule have until May 2012 for compliance. Phase I also addresses the PM2.5 rule that was proposed this summer. Phase II of the ruling goes into effect by January 2014. The interesting part of the EPA's rule is that even with all the emission requirements going out between now and middle of 2014, the agency still is projecting that two areas of the country will not be able to meet the ozone portion and the PM 2.5 requirements of the regulations. The EPA projects that the Houston-Galveston metropolitan area will be unable to meet the ozone requirement, and that the Pennsylvania area that includes Liberty and Clairton will be unable to meet the 24-hour fine particle standard.
Industrial Info is tracking more than 100 emissions projects throughout North America with a total investment value of more than $9 billion. The company is also tracking more than 115 coal-fired units that are being considered for retirement due to this regulation, which equates to an estimated 24 gigawatts of electrical generation. We expect to see more announcements in the future of plant and unit closures, after cost evaluations are completed by electricity generators.
The factors many of them will be looking at are such things such as the size, age and condition of the units; and the cost of the emissions retrofits, compared to the development and construction of other assets, such as natural gas-fired, combined-cycle power plants. Companies such as Duke Energy Corporation (NYSE:DUK) (Charlotte, North Carolina), Dominion Resources Incorporated (NYSE:D) (Richmond, Virginia), American Electric Power (NYSE:AEP) (AEP) (Columbus, Ohio) are already planning on replacing certain assets with combined-cycle facilities. For example, AEP is currently evaluating its Rockport generating station in Rockport, Indiana, for closure. Sources inside AEP have stated that if met with the full brunt of all the proposed EPA regulations, the estimated cost to bring the plant into compliance could be well over $1.5 billion. That is approximately two times the initial cost of the facility during its original construction.
View Plant Profile - 1010400
Industrial Info Resources (IIR) is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. IIR's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
The ruling will call for the annual reduction of SO2 and NOx emissions to 6.4 million tons and 1.4 million tons, respectively, by 2014. This would reduce SO2 and NOx emissions 73% and 54%, respectively, from the 2005 levels. The EPA realizes the rule will affect more than 3,642 coal-, oil- and gas-fired generation units. Industrial Info is tracking 887 coal-fired units that will be affected. But approximately 70% of the power generated will come from these coal-fired units in the regulated areas that have or are planning to install state-of-the art SO2 controls, such as scrubbers; 50% of this generation has or will have NOx controls installed, such as selective cataylitic reduction devices (SCRs).
The rule outlines items such as installation of new environmental emission controls; fuel conversions; fuel switching; and the upgrading of existing environmental controls that will help generating units meet the required limits.
The rule is separated into two phases. Phase I, which will go into effect by January 2012, addresses NOx and SO2 emissions. The states affected by the ozone portion of this rule have until May 2012 for compliance. Phase I also addresses the PM2.5 rule that was proposed this summer. Phase II of the ruling goes into effect by January 2014. The interesting part of the EPA's rule is that even with all the emission requirements going out between now and middle of 2014, the agency still is projecting that two areas of the country will not be able to meet the ozone portion and the PM 2.5 requirements of the regulations. The EPA projects that the Houston-Galveston metropolitan area will be unable to meet the ozone requirement, and that the Pennsylvania area that includes Liberty and Clairton will be unable to meet the 24-hour fine particle standard.
Industrial Info is tracking more than 100 emissions projects throughout North America with a total investment value of more than $9 billion. The company is also tracking more than 115 coal-fired units that are being considered for retirement due to this regulation, which equates to an estimated 24 gigawatts of electrical generation. We expect to see more announcements in the future of plant and unit closures, after cost evaluations are completed by electricity generators.
The factors many of them will be looking at are such things such as the size, age and condition of the units; and the cost of the emissions retrofits, compared to the development and construction of other assets, such as natural gas-fired, combined-cycle power plants. Companies such as Duke Energy Corporation (NYSE:DUK) (Charlotte, North Carolina), Dominion Resources Incorporated (NYSE:D) (Richmond, Virginia), American Electric Power (NYSE:AEP) (AEP) (Columbus, Ohio) are already planning on replacing certain assets with combined-cycle facilities. For example, AEP is currently evaluating its Rockport generating station in Rockport, Indiana, for closure. Sources inside AEP have stated that if met with the full brunt of all the proposed EPA regulations, the estimated cost to bring the plant into compliance could be well over $1.5 billion. That is approximately two times the initial cost of the facility during its original construction.
View Plant Profile - 1010400
Industrial Info Resources (IIR) is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. IIR's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
