Aging Coal Plants Carry High Hidden Costs, Particularly to Health

A new study from the National Research Council holds a warning for lawmakers about the true costs of the nation's aging power plants and the danger of grandfathering clauses.

The council was asked by Congress to study the external costs of the most common types of energy production and use — costs that aren’t incorporated into the market price of energy or into government policies, such as damages to health, environment and infrastructure.

The results were released on Monday, and they are startling.

“Just the damages from external effects the committee was able to quantify add up to more than $120 billion for the year 2005,” the council writes.

“There is little doubt that this aggregate total substantially underestimates the damages, because it does not include many other kinds of damages that could not be quantified for reasons explained in the report, such as damages related to some pollutants, climate change, ecosystems, infrastructure and security.”

The study looked at costs associated with various types of energy used for transportation, electricity and heat. The largest chunk of that $120 billion, more than half of it, came from the coal-fired production of electricity.

The researchers estimated the external costs related coal-fired electric power – not including damages related to climate change – to be $62 billion for 2005 alone. (They looked at 406 power plants across the continental United States representing 95% of coal power generated.)

That works out to 3.2 cents per kilowatt-hour across all the coal plants, but a more important lesson surfaces when costs are compared plant to plant:

— The top 10% of the worst offenders, those coal plant with the highest calculated damages per plant, accounted for 25% of the total generation, but they were responsible for 43% of the damage.

— The bottom half in the list also accounted for 25% of total generation, but only 12% of the damage.

— The range: $8.7 million annually for the least damaging plant to $575 million for the worst.

Most of the variation is in emissions intensity, or emissions per kWh, rather than tons of pollution produced, the authors write. Those variations “reflected the sulfur content of the coal burned; the adoption or not of control technologies (such as scrubbers) and the vintage of the plant — newer plants were subject to more stringent pollution control requirements.”

When the Clean Air Act was passed in 1970, existing coal plants were grandfathered in with the expectation that they would soon be replaced. Instead, their owners modified the aging plants repeatedly to keep them running rather than building new plants that would be required to meet Clean Air Act requirements. The act's New Source Review provision was intended to keep tabs on these modifications, but it was frequently skirted. Today, the average age of the U.S. coal-fired power plant fleet is about 40 years and several have been around since the 1950s.

The National Research Council's new study on the external costs of energy was ordered under the Energy Policy Act of 2005 and finally funded in 2008.

It takes into account damages such as costs to human health — an estimated 18,000 premature deaths per year — agriculture, forestry, building materials and the visibility of vistas. More than 90% of the monetized damages caused by the pollution from coal-fired power were associated with human health, with sulfur dioxide considered the worst culprit. The map shows where those damages are greatest.