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Natural Gas Fuel Switching Consequences for Public Power Utilities 2012-2017 Theresa Pugh

Natural Gas Fuel Switching Consequences for Public Power Utilities 2012-2017 Theresa Pugh April 14, 2010 APPA CEO Climate Change Task Force. Door #2. Door #1. Door #3.

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Natural Gas Fuel Switching Consequences for Public Power Utilities 2012-2017 Theresa Pugh

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  1. Natural Gas Fuel Switching Consequences for Public Power Utilities2012-2017 Theresa Pugh April 14, 2010 APPA CEO Climate Change Task Force

  2. Door #2 Door #1 Door #3 Retrofit existing fired power plant with Hazardous Air Pollutant Controls (Minimum of Scrubbers or Baghouses Activated Carbon & ESP) and CCS meeting roughly natural gas standard for CO2 Use Clean Air Act’s NSPS for reasonable, available and cost effective energy efficiency (DSM) and renewables [heavy lift] Fuel Switch to Natural Gas (and deal with hedging, build new infrastructure & price volatility issues)

  3. '11 '12 '13 '16 '15 '17 '08 '09 '10 '14 Possible Timeline for Environmental Regulatory Requirements for the Utility Industry Ozone SO2/NO2 CAIR Water Beginning CAIR Phase I Seasonal NOx Cap SO2 Primary NAAQS Revised Ozone NAAQS Reconsidered Ozone NAAQS Effluent Guidelines Final rule expected Effluent Guidelines Compliance 3-5 yrs after final rule Proposed CAIR Replacement Rule Expected SO2/NO2 Secondary NAAQS Next Ozone NAAQS Revision Final CAIR Replacement Rule Expected CAIR Vacated 316(b) Compliance 3-4 yrs after final rule Effluent Guidelines proposed rule expected 316(b) final rule expected CAIR Remanded NO2 Primary NAAQS CO2 Regulation PM-2.5 SIPs due (‘06) Begin CAIR Phase I Annual SO2 Cap PM-2.5 SIPs due (‘97) Next PM-2.5 NAAQS Revision Beginning CAIR Phase II Annual SO2 & NOx Caps Begin CAIR Phase I Annual NOx Cap Final Rule for CCBs Mgmt New PM-2.5 NAAQS Designations Beginning CAIR Phase II Seasonal NOx Cap CAMR & Delisting Rule vacated HAPS MACT final rule expected Begin Compliance Requirements under Final CCB Rule (ground water monitoring, double monitors, closure, dry ash conversion) HAPS MACT Compliance 3 yrs after final rule Compliance with CAIR Replacement Rule HAPs MACT proposed rule Proposed Rule for CCBs Management Final EPA Nonattainment Designations 316(b) proposed rule expected Ash Hg/HAPS CO2 PM2.5 3 -- adapted from Wegman (EPA 2003) Updated 2.15.10

  4. Retrofit Decisions Driven by HAPs & CAIR Regulations Before CO2 CURRENT CAPITAL COST AND COST-EFFECTIVENESS OF POWER PLANT EMISSIONS CONTROL TECHNOLOGIES Prepared by J. Edward Cichanowicz Prepared for Utility Air Regulatory Group January 2010 “The capital cost of retrofitting either wet FGD or SCR increased over the recent 4-year period, from about 2005 through 2009, and specifically for a 500 MW plant, by approximately $50-65/kW. This same rate of cost escalation is anticipated to continue for the next 4-6 years, elevating the cost of equipment installed in 2014 and 2015 for a CAIR Phase 2 mandate and the anticipated HAPs MACT rule.”

  5. Update screen shot

  6. Current Natural Gas Pipeline

  7. Current U. S. Natural Gas Storage Maps (no differentiation for storage capacity)

  8. Table 6: Gas Burn by State if Existing Coal-Fired MW Converted to Natural Gas

  9. Switching from Coal to Natural Gas: Understanding the Environmental and  Operational Impacts At APPA National Conference, June 19-23, 2010, Orlando, FL Cost to Members: $375; Cost to Non-Members: $750 Sunday, June 20, 2010 - Full day • 8:30 a.m. – 4:30 p.m. The U. S. Environmental Protection Agency’s “perfect storm” of new environmental regulations (air, climate, water and waste) may lead many utilities to switch from coal to natural gas for base load energy production to reduce carbon dioxide, sulfur dioxide and fine particulate matter.  While natural gas may be an easier environmental choice, the utility’s operational issues may grow far more complex when producing electricity with natural gas. Operational issues range from anticipating how much gas to use in lieu of coal, the purchasing (“nomination”) process, natural gas transportation issues, and local storage when the gas is not used within 24 hours. The speaker will address all aspects of natural gas use, from nomination, to setting up procurement operations, to re-sale of natural gas in the market if storage is not available. Instructors:Ted Chapman, Director, Standard & Poor's, Dallas, Texas; Catherine Elder, Senior Associate, Aspen Environmental Group, Sacramento, Calif.; Doug Hunter, General Manager, Utah Associated Municipal Power Systems, Salt Lake City, Utah; and Joanie Teofilo, Vice President, Risk Control & CRO, The Energy Authority, Jacksonville, Fla. http://www.appanet.org/events/annualeventdetail.cfm?ItemNumber=26074&sn.ItemNumber=0

  10. APPA Contacts CO2, EPA liaison, CAA, & new generation (including renewables) Theresa Pugh Director, Environmental Services 202-467-2943 TPugh@APPAnet.org GHG Reporting, 316(b), biomass and effluent guidelines J.P. Blackford Environmental Services Engineer 202-467-2956 JPBlackford@APPAnet.org

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