Reducing Coal Plant Emissions by Cofiring with Natural Gas

Using its existing authority under the Clean Air Act, the Environmental Protection Agency (EPA) can jump-start the Biden administration’s plan to reduce US greenhouse gas emissions by 52 percent and contribute important air quality benefits in this decade.Under Section 111(d) of the Clean Air Act, the EPA can establish guidelines and require states to develop standards of performance for existing sources of air pollution. These performance standards are emissions limits that the EPA administrator determines are achievable using an adequately demonstrated best system of emissions reductions. This provision has been successfully exercised many times; however, the two times it has been used to regulate carbon dioxide (CO2) emissions at existing electricity-generating units (EGUs), it has failed in the courts. We describe and model an approach that is likely to be more successful, based on the opportunity to use natural gas to cofire with coal to reduce emissions at coal EGUs.The Obama administration took a broad approach in its Clean Power Plan (CPP), which identified performance standards for the entire power system. This approach was stayed (frozen) by the courts for review based on its breadth, since it identified emissions reductions that were conditioned on actions (such as expanded use of renewable energy) that could be taken at sources other than the regulated existing fossil units. The Trump administration withdrew the CPP before the court’s review was complete and, as a replacement, proposed the Affordable Clean Energy (ACE) rule, which in turn was struck down by the courts because it proposed a standard based on a set of technologies that was too narrow, resulting in emissions reductions that would be insignificant.We describe a performance standard, based on the opportunity to cofire with natural gas at coal EGUs, that would address most of the concerns that have been raised before the courts. Natural gas cofiring is already a demonstrated and widespread practice. Although the ACE rule explicitly rejected gas cofiring as a basis for a performance standard, previous analysis provided to EPA indicated that in 2017, gas cofiring occurred at 35 percent of coal EGUs across 33 states. Indeed, if the monthly maximum use of gas at these units were achieved in every month, emissions reductions comparable to those anticipated by all other measures in the ACE rule could be achieved. Because a performance standard based on the opportunity for cofiring applies to an individual facility, it does not raise concerns about measures taken outside regulated emissions sources. This approach is based on a broader set of technologies than those included in the ACE rule and is likely to achieve more significant emissions reductions. Importantly, it would provide a soft landing for coal units that choose to phase out production and reduce emissions at units that continue to operate.We model a natural gas cofiring standard using RFF’s Haiku electricity market model, including gas price forecasts from Annual Energy Outlook 2019, and site-specific estimates of the capital cost to expand gas delivery provided by Natural Resources Defense Council. We identify five key findings.