New EPA Carbon Standards



Author: Velocity Suite Power Markets Analyst

On September 20th, 2013, the EPA proposed new carbon pollution standards for new power plants in the United States under the Clean Air Act. In the article, they discussed how “new large natural gas-fired turbines would need to meet a limit of 1,000 pounds of CO2 per megawatt-hour.” In the proposal, they also discussed the proposed rates for coal-fired units and small natural gas units. For these units, the rate would be set at 1,100 CO2 lbs/MWh.

The new proposed standards could drastically change the generation footprint in the United States in the future, as the majority of future generation would be built from high-efficiency, low-emissions turbines.

To get an idea of the current emissions trends for large natural gas and coal units for currently operational plants, we can use the Velocity Suite to calculate average CO2 rates and compare them to the upper-bound rate of 1,100 lbs/MWh in the new proposed EPA standards. Using the US EPA CEMS hourly generation & emissions data for 2013 in the Velocity Suite, there are 986 currently operational natural gas and coal-fired units (roughly 280,000 MW of capacity) that have an annual weighted average CO2 rate – in lbs/MWh – less than or equal to the proposed 1,100 CO2 lbs/MWh rate. Conversely, there are over 2,300 operational natural gas and coal-fired units (roughly 500,000 MW of capacity) with CO2 rates above the proposed 1,100 lbs/MWh CO2 rate. Under this proposed rule for new power plants, approximately 30% of current generation would be at or below this level of emissions.

Using the information from above, we can start to visualize where the United States currently sits in regards to natural gas capacity, coal capacity and emissions. Below is a map created from the Velocity Suite mapping natural gas and coal units alongside their current annual weighted average CO2 rate for 2013.
EV_MarketOps_4_EPA_CO2_Rate_Map
Although only 30% of current generation would meet the standards, it is good to remember that this proposed rule will only effect new generation coming online in the future. Since the release of the proposed standards, the EPA has hosted multiple public hearing sessions across the United States regarding the rule, and will have another public hearing on February 6th, 2014 in Washington DC.

More information on the new carbon pollution standards can be found using the link below; this is the full article released from the EPA, as well as links to the entire proposed rule.

EPA News Release 09/20/2013 – Proposed Carbon Pollution Standards >>

With the new rule, we can start asking how it will impact capacity and generation across the United States in the future. What types of new technology will we see? Will the United States start to develop more combined cycle or peaking capacity units? Regardless of what rules are developed, the Velocity Suite team will be prepared to collect additional data as it is posted. And we’ll also keep our eyes and ears open for additional analysis opportunities based on public hearing results.

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