Financial Times
US Coal-Fired Power Stations Under Threat

Sunday, August 28, 2011

The US power industry is facing its biggest shake-up since the Three Mile Island accident of 1979.

That incident killed off investment in new nuclear plants for a generation. This time, it is coal-fired power stations that are under threat.

New regulations governing pollution from coal plants that have been proposed by the US government’s Environmental Protection Agency could force up to 20 per cent of those plants to shut down, according to analysts and industry executives.

The first to take effect is the Cross-State Air Pollution Rule, which cuts the permitted emissions of sulphur dioxide and nitrogen oxides, the gases that cause acid rain. It was set out in detail in July and will be enforced from the start of 2012.

Brannin McBee, of Bentek Energy, a consultancy, says he expects the EPA will give the industry more time, perhaps by phasing in its new restrictions over a number of years.

There is simply not enough capacity in the US to fit all the desulphurisation equipment and build the new gas-fired plants and pipelines that will be needed within the EPA’s timetable.

However, he adds, the EPA seems determined to press ahead with its strategy.

“The general consensus in the industry is that the new rules will have to be delayed somehow,” he says.

“But we do believe the new limits will come in some way or another.”

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