Brattle Group: EPA regulations may shut up to 67,000 MW of US coal plants

A new study by Brattle Group, a US-based consulting company, has advanced that emerging US Environmental Protection Agency (EPA) regulations on air quality and water for coal-fired power plants could result in over 50,000 MW of coal plant retirements and require an investment of up to $180 billion for the remaining plants to comply with the likely mandates. According to the study, by Brattle economists Metin Celebi and Frank Graves, the regulations are expected to force coal plants to decide between retiring versus installing expensive control equipment to reduce emissions of SO2, NOx, particulates, and hazardous air pollutants such as mercury, as well as cooling towers to reduce the use of cooling water. Before even considering the potential effect of possible government efforts to reduce carbon dioxide emissions to combat global warming, the report estimated 40,000 MW to 55,000 MW of coal capacity could retire if the EPA mandates further reductions of sulfur dioxide, nitrogen oxide, particulates, mercury and other harmful emissions by 2015. Another 11,000 to 12,000 MW could retire if cooling towers are also mandated, the study pointed out. Celebi and Graves estimate that 40,000 to 55,000 MW of coal capacity, depending on the cost of retrofits, would retire if scrubbers and selective catalytic reduction (SCR) equipment were to be mandated by 2015 for all coal units. This would bring the total retirements to between 50,000 to 67,000 MW, or roughly 20 percent of installed coal plant capacity. “In contrast to other studies projecting that mostly old and small coal units are at risk for retirement, our analysis finds that roughly one-third of the retirements will be from power plants that are less than 40 years old and larger than 500 MW, resulting in significant challenges for the coal industry as a whole,” Celebi said in the release.