The EPA recently issued details of a pending new regulation that will substantially reduce all new Coal Power plant carbon emissions.  This proposed regulation would effectively reduce the carbon emissions of new Coal Power plants by over half the emission levels of existing operating plants.  In addition the EPA has indicated new carbon reduction regulations for existing plants will be forthcoming.  To comply with these future regulations the EPA has identified ‘Best Available Control Technologies’ that include large improvements in ‘power generation efficiency’ and installing ‘carbon capture and sequester’ (CCS) systems.  While substantially reducing future and existing Coal Power plants’ carbon emissions is very technically feasible, a major concern is the actual costs.  If Coal Power plant efficiency and CCS technology upgrade costs are significantly more expensive than alternative lower carbon power generation sources, the eventual shutdown of most or all Coal Power plants could become the most probably outcome of these new and developing EPA regulations.  What would be the most likely alternative to state-of-art Clean Coal Power with CCS technology and how would this action impact the U.S. Power Sector and available energy supplies?

EPA Regulation Compliance Technologies – The proposed regulation would reduce all new Coal Power plants’ carbon (equivalent) emissions down to as low as 1000 lbs. per MWh (‘gross’).  This represents about a 55% reduction of operating Coal Power plants carbon emissions, which currently average about 2150 lbs. carbon/MWh (‘net’).  To feasible accomplish new regulatory carbon emission reductions would require at minimum building new CCS systems to reduce stack emissions by at least 65% (assuming about a 10% difference between ‘gross’ and ‘net’ emissions; further details to be covered in a future TEC post).  This option requires at minimum a huge, costly CCS installation at each Conventional Coal Power (steam boiler-turbine) plant.

An alternative to building Conventional Coal Power plants with very large CCS systems is a combination making substantial efficiency improvements via the state-of-art ‘coal gasification’ (CG) process and feeding the ‘syngas’ to a state-of-art ‘combined cycle gas turbine’ (CCGT) generator.  The combination of gasifying coal and fueling CCGT’s with the syngas can effectively reduce coal fuel consumption by up to 30% compared to a Conventional Coal Power plants per MWh generation.  Reduced CG-CCGT coal consumption also reduces the associated carbon emissions up to 30%.  To reduce the carbon emissions by an additional 35% as needed to achieve EPA target levels of 1000 lbs./MWh requires installing a (somewhat smaller) CCS systems on the CG-CCGT flue gas-exhaust. 

Projected U.S. Power Supply and Mix – The EIA routinely develops U.S. energy supply-demand projections using a sophisticated computer program, the National Energy Model System (NEMS).  To develop projections out to 2040, the EIA incorporates enormous amounts of energy-market statistical data, and develops assumptions based on existing government regulations and other factors that can significantly affect future energy balances and markets.  In the case of the most recent EIA projection, AEO 2013, the Electric Sector power supply and generation mix includes all implemented State and Federal Regulations, and renewable power standards and financial support that can affect current and future-new power generation capacities and mixes.  The AEO 2103 was developed prior to the pending EPA Coal Power plant carbon emission regulations.  Refer to the following graph.

Figure 1 – EIA AEO 2013 Electric Power Generation: 2005-2040

Billion (B) KWh per year


Data Source: EIA AEO 2013 (Reference case) Electric Power Sector Electricity Supply, Disposition, Prices and Emissions and EIA MER Table 7.2b Note: ‘Other’ power generation includes Petroleum Oil and non-renewable fuels.

Prior to 2013 electricity produced from coal was in very significant decline due to rapid increases in shale (natural) gas production, lower natural gas market prices vs. coal, and fuels switching from coal-to-natural gas.  The EIA currently projects Coal Power generation will decline slightly until 2016 and then actually increase by 20% in 2040.  Natural gas, Nuclear and Renewable power (including hydropower) are projected to increase by 30%, 17% and 71% respectively, 2012-2040.  Total U.S. power consumption is projected to increase by 28% during the same period.  The largest projected increase in U.S. 2012-2040 power generation is Coal (+220 B WKh), followed by Renewables (+182 B KWh), Natural gas (+162 B KWh) and Nuclear (+138 B KWh). 

Cost and Performance of State-of-Art Clean Coal Technology – To maximize the efficiency and minimize the carbon emissions of future new Clean Coal Power generation will require building a combination of state-of-art CG-CCGT plus CCS.  State-of-art Clean Coal Power will most likely be based on ‘Integrated Gasification Combined Cycle’ (IGCC) electric power generation technologies.  While from an Engineering perspective, this very innovative IGCC technology can very feasibly achieve the new EPA carbon emission standards, its complexity will also be very challenging to operate reliably and build economically.

The U.S. currently does not have any industrial scale (500+ MW) Clean Coal Power Plants in operation.  The most promising example is the Kemper, Mississippi Power Plant currently under construction.  This plant’s designed is based on state-of-art IGCC+CCS technology and the captured carbon dioxide (CO2) will be sold to off-shore Gulf of Mexico ‘Enhanced Oil Recovery’ (EOR) production facilities.  The Kemper Clean Coal project is ideally located adjacent existing lignite (low cost) coal deposits and the off-shore oil production CO2 markets required for EOR operations. 

The Kemper Clean Coal project has unfortunately turned out to be much more expensive than originally estimated.  A combination of technical-project challenges has increased the total project cost up to $4.7 Billion.  The plant is designed to produce 582 MW, which makes the average unit cost of $8.1 Million per MW.  This cost level is well above most recent EIA estimates (refer to Capital Costs for Electric Plants, ‘Findings’ Table 2).  The Kemper Clean Coal Power plant is currently estimated to cost about the same as a new Nuclear Power Plant.

Justifying the construction of state-of-art IGCC+CSS Clean Coal Power Plants in the future is going to be very difficult based on other lower carbon alternative technologies.  State-of-art CCGT Natural Gas (NG) has very successfully displaced Conventional Coal Power in recent years due to lower energy costs, increased efficiency and much lower capital costs.  These same CCGT NG Power Plants also are capable of easily meeting the currently proposed EPA 1000 lbs. carbon/MWh regulations without the need for costly CCS technology.  As a result the EIA estimates that new CCGT NG Plants should cost less than 20% than a new IGCC+CSS Clean Coal Power Plant.  Also, most Renewable Power sources (wind, solar PV, hydropower) are estimated to be significantly cheaper than IGCC+CSS Clean Coal Power Plants.  This being the case, which technologies are most likely to be built in the future to meet increasing consumer demand and comply with EPA carbon emission regulations?

The Most Feasible Option to Replacing Coal Power Generation – Based on the very high costs of future Clean Coal Power, recent market influences that led to coal-to-natural gas fuels switching, and the relatively low cost of new state-of-art CCGT NG Power creates a large incentive to expand this much lower cost NG technology over most other Clean Power technologies including Renewables.  Based on the EIA AEO 2013 report a new projection was developed that assumes all Coal Power is displaced by Natural Gas Power by 2040.  Refer to the following graph.

Figure 2 – Modified AEO 2013 Electric Power Generation Projection: 2005-2040

Billion (B) KWh per year


Data Source: Original basis was the EIA AEO 2013 and EIA MER data illustrated in Figure 1.  Beginning 2015 Coal Power is reduced linearly to zero in 2040.  This Coal Power capacity is replaced by adding average Natural Gas Power capacity.  Note: ‘Other’ power is relatively small and shown as the bottom ‘brown’ graph area.

The above graph illustrates that beginning 2015 about 15 existing Coal Power plants will be shutdown each year, resulting in no Coal Power operations by 2040.  This lost power capacity is replaced by added Natural Gas Power capacity each year.  No change in Nuclear, Renewable or Other Power generation from the original EIA AEO 2013 report has been made in this new analysis-projection.  During 2015-2040 a total of 1829 Billion KWh of Coal Power is replaced by Natural Gas.  Natural Gas Power will need to be expanded from 1,132 Billion KWh in 2015 up to 3,412 Billion KWh in 2040 in order to displace all Coal Power generation and supply projected AEO 2013 Natural Gas Power growth.

Impacts of Shutting Down All Coal Power and Replacing It with Natural Gas Power – One option to complying with EPA new and pending carbon emission reductions in 2040 could be installing up to 269,000 MW of IGCC+CCS Clean Coal Power Plant capacity (AEO 2013 Table A9 capacity basis).  State-of-art Clean Coal Power could reduce Conventional (not-so-clean) Coal Power carbon emissions by about half or a total of 860 Million Metric Tons per year (MMT/yr.) by 2040. 

The capital costs for new state-of-art Clean Coal Power capacity would be quite substantial.  Based on the recent Kemper, MS actual project cost experience, the cost of total new IGCC+CCS Clean Coal Power to replace all existing Conventional Coal Power capacity would be over $2.2 Trillion (2012 dollar basis; and depending on each new plant’s infrastructure costs for power grid integration, coal supply access, and captured CO2 transportation-sequestering facilities).  In contrast, total new CCGT NG Power capacity capital costs would be about $350 Billion plus infrastructure costs (EIA AEO Table 2 cost basis).  So on a capital and variable cost basis (fuel cost, maintenance, etc.), U.S. Consumers’ power costs would be significantly lower with Natural Gas Power vs. Clean Coal Power.  Note: this analysis assumes that domestic shale gas continues to expand at historic rates and meets nearly all future U.S. consumption requirements.

State-of-art Natural Gas Power generates less than half the carbon emissions of Conventional Coal Power per KWh.  Based on displacing all Coal Power with Natural Gas Power per Figure 2, the Power Sector’s carbon emissions would be decreased by about 1,180 MMT/yr.  This represents a 50% reduction in total projected U.S. Power Sector carbon emissions in 2040 and a 20% reduction in total U.S. (all end-use sectors) carbon emissions.

To evaluate the impact of more than doubling future Natural Gas Power generation capacity as required to displace all Coal Power, a detailed analysis of the EIA AEO 2013 natural gas ‘net imports’ was developed.  Refer to the following graph.

Figure 3 – AEO 2013 and Zero Coal Analysis Natural Gas ‘Net Imports’: 2005-2040

Trillion Cubic Feet per Year


Data Source – EIA AEO 2013 Natural Gas Supply, Disposition and Prices and adjusted (S/D Coal & Expand NG Power) based on Figure 2 data.

The original AEO 2013 (Reference case) report projected U.S. natural gas ‘net imports’ would decline to zero in 2020 and new ‘exports’ would increase significantly through 2040.  Excess domestic natural gas supply and exports would keep U.S. consumer prices well below world market levels and support relatively higher national Energy Security for this critical lower carbon fuel.  The EIA original reduction in imports and increasing exports projection would immediately change if all existing Coal Power was totally replaced by Natural Gas Power.  In this case U.S. natural gas net imports would rapidly and continuously increase to well beyond historic highs (25% in 2040 based on Figure 3 vs. 16% historic high in 2007). 

In Conclusion – Displacing all Coal Power with state-of-art Natural Gas Power has its advantages and disadvantages.  The advantages include substantially reduced capital costs compared to IGCC+CCS Clean Coal Power and the ability to achieve a significantly greater (about 320 MMT/yr.) future reduction of total U.S. carbon emissions.  The lower complexity and cost CCGT NG (without CCS) Power plants will likely be much more reliable (greater capacity factors and lower maintenance costs) compared to IGCC+CCS Clean Coal plants.  In addition, Natural Gas Power can readily displace all existing baseload, fully dispatchable Coal Power required to balance Power Grids’ supply-demand 24-hours per day and ensure Power Grids’ continuous reliabilities.  The major disadvantage of displacing all Coal Power with Natural Gas will be a potentially large increase in natural gas imports, likely increases in U.S. market and Consumer heating and power costs, and a decrease in national Energy Security.

So, if substantially expanding Natural Gas Power generation capacity does not appear to be the optimal solution to displacing all Coal Power, what are the most feasible and balanced solutions to reducing future U.S. Power Sector carbon emissions?  More optimal solutions will be covered in a future TEC post: “Impacts of Shutting Down (All) Most Coal Power: Part 2”.