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43 New Coal Plants Would Escape Climate Bill CO2 Standards

A new burst of coal-fired power plant construction now underway – the largest in decades – will put 43 new coal plants on American soil in the next five years, and all of them will escape the performance standards written into the climate bill now moving through Congress.

The 43 plants are either already under construction, near construction or permitted. They fall under a designation called “progressing projects” in a report (attached below) published by the National Energy Technology Laboratory, and under provisions in the American Clean Energy and Security (ACES) bill now awaiting Senate action, they would all be grandfathered in without direct restriction on their CO2 emissions.

“I’d definitely call it a bubble,” said Erik Shuster, the author of the report, who works in NETL’s Office of Systems Analysis and Planning.

Between 2000 and 2008, less than 5,600 MW of new coal-fired electric generation capacity came online, according to Shuster’s analysis. The 43 progressing plants are projected to add four times that generating capacity – 22,236 MW – in the coming five years. Collectively, they will produce more than 150 million tons of new CO2 emissions every year for many decades.

The ACES bill contains tough performance standards that would essentially require new coal plants to capture and store at least 50 percent of their CO2 emissions no later than 2025, but these 43 progressing projects – and potentially others – would escape those standards, thanks to a change in a single word in the legislation now more than 1,600 pages long.

When the discussion draft of the climate bill was first released by Reps. Henry Waxman (D-Calif.) and Ed Markey (D-Mass.) in late March, it stipulated that coal plants "finally" permitted after Jan. 1, 2009, would be subject to new performance standards. But the word "finally" was changed to "initially" in the version that was approved by the House and sent to the Senate.

With that single word change, the 43 progressing coal plants were grandfathered into the clean energy future and will escape any CO2 emission standards for coal plants if the measure becomes law.

In addition, the pending legislation preempts the EPA from regulating coal plants for CO2 emissions, leaving this new fleet of coal plants out of the reach of regulatory control as well as the new law.

The Sierra Club, which recently announced that its Beyond Coal campaign had helped to halt construction of a 100th coal plant since 2001, is working to improve the legislation.

"We’re looking to the Senate to strengthen the bill in order to help clean up the oldest, dirtiest coal plants while accelerating the transition away from coal going forward," said Mary Anne Hitt, the campaign's deputy director.

History Repeating Itself?

The grandfathering of coal plants is something that Congress has done before, with disastrous environmental results. When the Clean Air Act was passed in 1970 and 1977, Congress decided to exempt existing coal plants from the new clean air standards. Lawmakers believed they could control emissions without causing economic disruption by imposing standards only on brand new coal plants.

Analysts were predicting then that existing coal plants would be replaced by cleaner burning plants within one to three decades, and they backed up their projections with historical evidence. Between the end of World War II and the 1960s, utilities had been retiring their older plants after 35 to 45 years of use and building new ones to replace them. Lawmakers also intended for the grandfathered plants to eventually come under Clean Air Act regulations when they made substantial modifications and triggered New Source Review.

What actually happened after the passage of the Clean Air Act was contrary to these expert expectations. The grandfathering provision, together with incentives created by deregulated energy markets, instead encouraged utilities to delay construction of new plants and to extend the lives of aging, high-polluting plants.

"The owners of the plants very carefully flew them under the radar," said Seth Kaplan, a senior attorney specializing in climate issue at the Conservation Law Foundation. "They became very skilled at making incremental upgrades to avoid triggering New Source Review."

Grandfathering ended up being a perverse subsidy that discouraged innovation, prolonged the use of inefficient technologies, and allowed for continued air pollution. Few of these coal plants have been retired to the present day. The average age of a coal plant in the U.S. is about 40 years.

Over the years, there were many attempts to bring grandfathered coal plants under tighter control, with fierce battles fought during the Clinton administration. A study conducted in 1999, which called for legislation to bring these grandfathered plants under Clean Air Act regulation, showed that 94 percent of the aging plants, after complying with modern regulations, would remain competitive. They would spew out significantly lower amounts of acid rain causing emissions, and the cost of the upgrades would raise electric rates a mere 4 percent, the study found.

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Tracking New Coal. NREL Report.pdf1.24 MB
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