December 6, 2011
Who’s Killing the Coal-Fired Power Plant?
This article from Politico suggests that many companies are shutting down older, dirtier coal plants because it makes economic sense, not because of the impact of new air pollution regulations from the U.S. Environmental Protection Agency. The economic case is due largely to the discovery of the Marcellus Shale in the mid-Atlantic region, along with more cost-efficient hydraulic fracturing due to changing technology, which has resulted in natural gas prices dropping dramatically in recent years and they’re expected to stay that way. As reported in a previous blog energy [November 29, NERC Finds that Grid Reliability May Be Jeopardized by EPA Rules], the North American Electric Reliability Corp. says in its most recent report that the main new sources of power added to the grid in the immediate future will be natural gas, solar and wind power projects. In addition to the impact of low natural gas prices, the recession has cut into demand for electricity, and many utilities do not expect power demand to hit pre-recession levels until 2012. While there is no question that EPA rules — particularly EPA’s Cross-State Air Pollution Rule and its mercury and air toxics rule for power plants — are forcing or accelerating shutdowns of many older, polluting coal-fired power plants, there are other economic forces at work. It is thus unfair to lay the blame for the decline in coal-fired electric generation over the next several years entirely at the doorstep of the EPA, as popular as that may be in many political circles.