Retrofit of U.S. Coal-Fired Generation Fleet Topic at Coal-Gen 2012 in Kentucky

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Written by Brock Ramey, North American Power Research Manager (Sugar Land, Texas)--Beginning tomorrow, Power Industry leaders, electrical generation companies, and various support and service professionals (who provide assistance to the power industry) will be meeting at the Kentucky International Convention Center in Louisville, Kentucky. Some of the major topics of discussion will include: the extent of coal-fired generation retrofits required to meet environmental emissions regulations outlined by the U.S. Environmental Protection Agency (EPA); how much of the U.S. base load generation capacity is going to be retired due to these regulations vs. what is going to be retired due to old age; and what the best locations and methods are to address these hurdles.

Over the last two years, the Obama Administration and the EPA have directed a number of regulations at the coal industry, especially coal-fired generation. Some of these regulations, such as the Cross State Air Pollution Rule (CSAPR), have been released and challenged in the public eye, as well as placed on stay by the U.S. Court of Appeals for further judicial review. During this process, the agency has made and continues to make changes to the regulation. The Mercury Air Toxic Standard is another regulation that was released and implemented; now, as it moves forward, it has had numerous changes along the way with portions temporary stayed by the agency itself. The upholding of the National Ambient Air Quality Standards for Sulfur Dioxide and Nitrous Oxide by the courts happened earlier this summer, and the introduction of greenhouse gas regulations that would require massive changes to not only coal-fired generation, but the industry as whole. These regulations, combined with others coming down the pike addressing water cooling, ash handling, and haze have states', operators' and "John Q. Public's" heads spinning with confusion and disbelief. How is this beneficial to a country that is in the condition economically that we are in? How does this promote job growth for the millions unemployed currently here in the U.S.?

This week will not only focus on discussion's about regulations and how best to address them and what facilities have already done or are planning to do to meet these multitude of requirements. Owners and operators, as well as industry specialists, will address how to make the existing fleet more efficient and cost-effective when it comes to the operational side of things.

The reason for this is simple. As far as base load generation goes, no matter how hard the current administration, the EPA, special interest groups and others try, there is one thing the nation needs to understand quickly: Coal-fired generation is an extremely important part of our power supply matrix, and it is not going anywhere. Retrofits will be made, efficiency changes will be implemented, some of the fleet will be retired and some will be converted, but pushing coal out as a large part of our energy matrix is a massive mistake that this country cannot afford at this time.

We have recently seen some easing of these regulations, and federal agencies are working hand-in-hand with states and electrical generational utilities to make sure we can get this done. But there is a very long road of compromises and negotiations ahead of us before we reach the middle ground. Companies are realizing that spending and retirements to meet some regulations may not be as dramatic as they thought; however, other regulations, we are discovering, are driving the industry toward two to three fuel types that are currently favorable without regard to what might happen in the next decade--such as a rise in natural gas prices.

This week also will give service providers in technology development, like Alstom Power, Mitsubishi Power Systems Americas (Orlando, Florida), and Eco Power Solutions (Louisville), a chance to meet with industry leaders and discuss new ways to meet more than just the environmental regulations front. Combining that with the engineering and construction knowledge from companies like Zachry Holding (San Antonio, Texas), KBR (NYSE:KBR) (Houston, Texas), Burns & McDonnell (Overland Park, Kansas) and Kiewit Power (Overland Park), not to mention the numerous other companies present here this week, should make for the industry walking away with a stronger sense of what can be done to address a lot of what is facing the industry on the regulation side of the house. On the operations side of things, companies like North American Energy Services Corporation (NAES) (Issaquah, Washington) are on hand to share their years of experience and knowledge in power plant operations and maintenance with the industry and how things can be address on that front as well.

Industrial Info Resources is currently tracking more than 35 gigawatts of coal-fired generation that is due to be retired between now and 2016. Some of this generation will be retiring due to age and some will be retiring due to environmental regulations. Most of this loss will be within the 200-megawatt and below range. IIR also is currently tracking more than 169 environmental emissions-driven projects currently in development from 2013 forward.

So, please feel free to come by and meet the IIR team at the Kentucky International Convention Center in Louisville, Kentucky, at booth 833. Take a tour of what is currently going on in the generation industry and what lines of industry market information and trend spending IIR can supply for you.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info'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.