Regulatory Drivers for Existing Coal-Fired Power Plants

Regulatory and legislative requirements have predominantly driven the need to develop NOx control technologies for existing coal-fired power plants. The first driver was the Title IV acid rain program, established through the 1990 Clean Air Act Amendments (CAAA). This program included a two-phase strategy to reduce NOx emissions from coal-fired power plants – Phase I started January 1, 1996 and Phase II started January 1, 2000. The Title IV NOx program was implemented through unit-specific NOx emission rate limits ranging from 0.40 to 0.86 lb/MMBtu depending on the type of boiler/burner configuration and based on application of LNB technology.

The second driver was the Title I National Ambient Air Quality Standards (NAAQS) for ozone that led to EPA's NOx SIP (state implementation plan) Call Rule in 1998, requiring 21 eastern states and the District of Columbia to participate in a regional cap-and-trade program based on an equivalent NOx emission rate of 0.15 lb/MMBtu beginning in 2003-04. Since conventional LNB could not achieve this level of emissions, compliance required the development and implementation of post-combustion NOx controls such as SCR. Recent experience with SCR indicates that emission rates as low as 0.05 lb/MMBtu are achievable. However, being a cap-and-trade program, power plants had the option to either reduce their NOx emissions to the level of their NOx allowance allocation or acquire additional NOx allowances from other plants that over comply. EPA has estimated that approximately 111 GW of SCR will have been installed on U.S. coal-fired power plants by 2010 for compliance with the NOx SIP call.

A third regulatory driver for NOx control technology development resulted from EPA's revision to the fine particulate matter (PM) and ozone NAAQS in 1997, which eventually led to the Clean Air Interstate Rule (CAIR) finalized in May 2005. The NOx emission reductions under CAIR, impacting 28 eastern states and the District of Columbia , will be implemented as a cap-and-trade program in two phases, with a Phase I compliance date of January 1, 2009, and a Phase II compliance date of January 1, 2015. The NOx emission caps were calculated using emission rates of 0.15 lb/MMBtu for 2010 and 0.125 lb/MMBtu for 2015. EPA has estimated that a total of approximately 154 GW of SCR will have been installed on U.S. coal-fired power plants by 2020 for compliance with the NOx SIP call and CAIR.

Future Regulatory/Legislative Drivers

The three regulatory drivers described above led to the commercial development and deployment of LNB and SCR NOx control technologies that enables power industry compliance with those requirements. However, it is likely that future regulatory/legislative drivers will increase the stringency of NOx emission control requirements. As a result, a larger proportion of the existing fleet of coal-fired power plants could be required to install additional NOx control technologies. The following is a brief summary of those drivers.

Regional Haze Rule – In July 1999 EPA published a regional haze regulation to improve visibility in national parks and wilderness areas. Further reductions in power plant NOx and SO2 emissions are being targeted as compliance strategies. The regional haze rule requires the installation of best available retrofit technology (BART) for existing pre-New Source Performance Standard (NSPS) power plants that entered operation between 1962 and 1977. The BART provision could require the installation of advanced in-furnace or post-combustion NOx controls on these plants. According to EPA, states are required to identify BART sources and submit implementation plans by December 2007. Implementation of BART NOx controls would then occur between 2014 and 2018. However, EPA published amendments – known as the Clean Air Visibility Rule, CAVR – to the regional haze rule in July 2005 to clarify BART emission control requirements. CAVR allows states covered by CAIR to use the CAIR NOx and SO2 controls as a substitute for BART. As a result, the regional haze rule primarily affects power plants in the Western U.S. not covered by CAIR.

Multi-pollutant Control Legislation – In the past several years, the Administration and Congressional members have proposed legislation for multi-pollutant control that would limit emissions of SO2, NOx, mercury, and in some cases CO2 from fossil-fueled power plants. Although enactment of such legislation is uncertain, there is significant potential for more stringent NOx emissions control requirements in the near future.

In 2002, the Bush Administration announced its Clear Skies Initiative (CSI) multi-pollutant control proposal. The CSI proposal would require significant emission reductions of SO2, NOx, and mercury implemented in two phases using an allowance-based cap-and-trade program. The CSI proposal required a reduction in NOx emissions equivalent to an approximately 59% reduction below 2001 baseline levels beginning in 2008 and a 67% reduction beginning in 2018. The Clear Skies Act (CSA) legislation to adopt the CSI requirements was originally introduced in both the U.S. House and Senate in 2002, 2003, and 2005, but has yet to be enacted.

In addition to CSA, alternative CAA amendments have been introduced in Congress over the past few years. Of those alternatives, the two that have received the most attention are The Clean Power Act (Sen. Jeffords) and The Clean Air Planning Act (Sen. Carper). The three legislative proposals are significantly different on matters such as compliance methods, targets, deadlines, and regional definitions. Additionally, both the Clean Power Act and the Clean Air Planning Act regulate CO2 to some degree.

Regional NOx Emission Reduction Regulations – The District of Columbia and 12 Northeast state members of the Ozone Transport Commission (OTC) are developing a model rule – known as CAIR-Plus – to achieve NOx and SO2 reductions in the Northeast greater than required under EPA's CAIR as a means to better achieve attainment with the revised PM and ozone NAAQS. For NOx, the proposed CAIR-Plus imposes annual caps based on an emission rate of 0.12 lb/MMBtu in 2009 and 0.08 lb/MMBtu in 2012. As a result, CAIR-Plus is approximately 20% more stringent than CAIR for Phase I (0.15 lb/MMBtu) and 36% more stringent than CAIR for Phase II (0.125 lb/MMBtu).

State-Specific NOx Emission Reduction Regulations – In addition to complying with the national and regional NOx requirements discussed above, several states have also implemented more stringent NOx emission reduction regulations for coal-fired power plants to address local PM and ozone NAAQS nonattainment areas. As EPA continues to review and revise the NAAQS, it is likely that more states may decide to further regulate NOx emissions.

Regulatory Drivers for New Coal-Fired Power Plants

New coal-fired power plants are required to meet both NSPS and New Source Review (NSR) NOx emission requirements. Additionally, existing sources that undergo reconstruction or a major modification are also subject to NSR. The NOx NSPS for coal-fired plants built after August 17, 1971 and prior to July 9, 1997 ranges from 0.5 to 0.8 lb/MMBtu depending on coal rank and the date construction was commenced. The NOx NSPS was changed to a generation output-based standard of 1.6 lb/MWh (approximately equivalent to 0.15 lb/MMBtu at a heat rate of 10,500 Btu/kWh) for new coal-fired plants that commenced construction after July 9, 1997. The most recent NSPS revision applies to units built after Feb. 28, 2005, with separate limits for new units (1.0 lb/MWh), existing reconstructed units (0.11 lb/MMBtu), or existing modified units (0.15 lb/MMBtu).

The NOx NSR requirements are established on a case-by-case basis by the state environmental agency during the permitting process for a new plant and are likely to be much more stringent than NSPS. Under NSR, a new plant is required to install either Best Available Control Technology (BACT) if located in an ozone NAAQS attainment area, or Lowest Achievable Emission Rate (LAER) technology if located in an ozone NAAQS nonattainment area. Recent state BACT/LAER determinations have established NOx emission rate limits for new coal-fired plants between 0.05 and 0.10 lb/MMBtu and required the installation of LNB and SCR.

The NSPS for NOx are as follows: