Generating Capacity and Emissions Control Retrofit Decisions

Capacity Additions

As might be expected, coal, natural gas, and renewable generating capacity changes in the various cases tend to parallel the generation and fuel use changes discussed previously. In the 2-P and 3-P cases, fewer new coal plants are built while more new natural gas plants are built. Among the Clear Skies cases, new coal capacity additions through 2025 range from 50 gigawatts to 55 gigawatts, compared with 77 gigawatts in the Reference case. Because of the GPS emission allowance system used in the Carper bill, the reduction in coal capacity additions is lower in the 2-P and 3-P cases, ranging from 70 gigawatts to 72 gigawatts, only slightly below the 77 gigawatts projected in the Reference case. The output subsidy associated with the GPS and the fact that new coal plants receive NOx and Hg allowances dampen the reduction in new coal plant builds tha would otherwise occur.

The result is different in the Carper 4-P cases where, relative to the Reference case, new coal plant additions are much lower while retirements are higher (Figure 14). In fact, in the Carper 4-P case without offsets, no new coal plants are projected to be built while nearly 38 gigawatts of existing coal plants are retired.

In the Carper 4-P cases, new renewable capacity is projected to increase significantly, especially in the cases with fewer offsets available (Figure 15). The renewables expect ed to see the largest growth are biomass and wind. For example, among the Carper 4-P cases, biomass capacity in 2025 is projected to range from 12 gigawatts to 72 gigawat ts, compared to 11 gigawatts in the Reference case. Similarly, wind capacity in 2025 in the Carper 4-P cases is projected to range from 16 gigawatts to 76 gigawatts, compared to 11 gigawatts in the Reference case.

Emissions Control Equipment

While generating capacity investment decisions are not expected to change significantly in the 2-P and 3-P cases, power c ompanies are projected to make significant investments in emissions control equipment to meet the NOx, SO2, and Hg caps in the bills. For NOx control they are expected to turn mainly to selective catalytic control (SCR) systems. Under Clear Skies, power companies are projected to add between 170 gigawatts and 175 gigawatts of SCR capacity by 2025 (Figure 16). SCR additions are expected to be slightly higher in the 3-P cases because SCRs also help to reduce mercury emissions fo r some plants and coal types. With the same NOx emissions cap, the amount of capacity expected to add SCRs in the Carper 2-P and 3-P cases is similar though slightly lower. Between the Carper 2-P and 3-P cases, the amount of capacity projected to add SCRs ranges from 163 gigawatts to 172 gigawatts.

In the Carper 4-P cases, the amount of capacity projected to add SCRs is generally low er than in the 2-P and 3-P cases because of the reduced use of coal in these cases due to the li mit on CO2 emissions. For example, in the Carper 4-P case without offsets, the amount of capacity projected to add SCRs is 140 gigawatts.

In the Clear Skies 2-P and 3-P cases, power generators are projected to add between 85 gigawatts and 99 gigawatts of SO2 scrubber capacity (Figure 17). With approximately 90 gigawatts of SO2 scrubbers on existing plants today, approximately two-thirds of all coal capacity will have SO2 scrubbers by 2025. Those plants not adding SO2 scrubbers are expected to turn to low-sulfur coal to reduce their emissions.

The tighter SO2 emissions cap leads to greater additions of SO2 scrubbers in the Carper 2P and 3-P cases (Figure 18). In these cases, the amount of capacity adding SO2 scrubbers is projected to range from 115 gigawatts to 117 gigawatts. As with the amount of SCRs added, the amount of SO2 scrubbers expected to be added is lower in the 4-P cases, particularly in the Carper 4-P case without offsets. In this case, only 72 gigawatts of capacity are projected to add SO2 scrubbers because of lower coal use.

To meet the mercury emissions cap, power plants are expected to rely on the mercury reductions that come from equipment primarily designed to remove NOx, SO2, and particulates (which are often referred to as co-benefits) and the use of activated carbon injection (ACI) systems designed specifically to remove mercury. ACI can be used with existing particulate control devices, i.e., electrostatic precipitators or fabric filters, or with a supplemental fabric specifically designed to remove mercury. The ACI fabric filter systems are more expensive but also more effective when a higher percentage of mercury must be removed. In the Clear Skies 3-P case, less than six gigawatts of ACI fabric filter systems are expected to be used (Figure 19). However, in the Clear Skies 3-P case without the mercury safety valve, over 52 gigawatts of ACI fabric filter systems are projected to be added.

Because of the requirement that all coal plants remove at least 70 percent of the mercury in the coal that they use and the tighter mercury caps in S. 843, ACI fabric filter systems are expected to be the key compliance strategy for reducing mercury emissions in the Carper 3-P and 4-P cases. By 2025 between 132 gigawatts and 140 gigawatts of capacity are projected to add ACI fabric filter systems in the Carper 3-P and 4-P cases (Figure 20).