Cleaning Up or Shutting Down Older Power Plants Shouldn’tAffect the Grid

Report suggests that tough new environmental standards should not affect power producers' ability to keep the grid humming

Tough new rules to clean up emissions from dirty power plants should not affect the reliability of the nation’s power grid, according to a new study commissioned by some of the country’s biggest power producers.

The 27-page report analyzes the likely impact of more stringent pollution standards proposed by the federal Environmental Protection Agency, including a new rule proposed earlier this month that would govern emissions from power plants in 31 eastern states. The primary pollutants involved in the study are sulfur dioxide, nitrogen oxide, mercury and other hazardous substances.

The report comes as some investment analysts have questioned whether the expected retirement of older coal-powered plants might hinder the reliability of the electric power grid. Earlier this year reported that some coal plants in New Jersey may have to shut down or switch to new less-polluting fuels to remain open, although state energy officials predicted it would not affect the grid’s reliability.

In summary, the report concluded that power generators, even those faced with retiring old, inefficient coal plants, have a wide array of solutions to help keep the lights on for consumers and the power humming on the grid.

“There’ s no single silver bullet to solve this,’’ said Chris Van Atten, managing director of M.J. Bradley & Associates, one of the authors of the report. “There will be investments in new pollution control technologies. There will be new power plants built. There will be changes in how plants are dispatched.’’

For clean air advocates, the report underscores their argument that a clean environment and healthy economy are not in conflict.

“The report offers very constructive solutions that say we can have clean air and energy that is affordable,’’ said Jim Walke (CQ), clean air director for the Natural Resources Defense Council.

Despite gains in cleaning up the nation’s air over the three decades the Clean Air Act has been in effect, the federal government said that 127 million Americans still live in counties with unhealthy air as of 2008, including most of New Jersey, which has never complied with some sections of the law.

With federal environmental officials trying to dramatically curtail primary pollutants from power plants that cause smog and other adverse health effects, owners of power plants face some tough choices: close down, invest in new pollution controls, or switch to cleaner burning fuels, such as natural gas.

In New Jersey, Public Service Enterprise Group, one of the sponsors of the study, has spent more than $1 billion adding sophisticated pollution controls, which will be installed by the end of the year at its two coal plants in Hudson and Mercer County. Once installed, the power stations will be among the cleanest coal-fired stations in the nation, according to environmental officials.

“In New Jersey, most of the coal plants have made the investments needed to meet future environmental requirements,” Van Atten said. “You are well ahead of the curve in this area.”

Still, some smaller power plants, such as a 25-megawatt facility in Vineland will cease operations by the end of the year under a consent agreement between the owners and the New Jersey Department of Environmental Protection.

A similar scenario is in store across the nation, according to the report. As many as one fourth of the coal-fired plants in the country will either have to switch to an alternative fuel, shut down, or invest in pollution controls.

But the report also recommends industry take a proactive role in dealing with the new mandates, since there is plenty of time to build new cleaner plants, install updated pollution technology or take steps to reduce capacity needs during times of peak demand.

“Without threatening reliability, the industry is well-positioned to respond to EPA’s proposed road map to help millions of Americans breathe easier,” the report said.

One added benefit of the new rule is many of the older, inefficient coal plants could wind up being replaced by less polluting natural gas plants, especially given the steep drop in prices for the fuel. Two years ago, gas-fired plants ran only about one-third of the time, compared to coal plants’ 56 percent run rate.

“It should give utilities the impetus to change their plants from coal to natural gas,” argued Jeff Tittel, executive director of the New Jersey Sierra Club, citing the drop in natural gas prices and recent discoveries of new supplies . “It’s a lot cheaper than coal.”

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