Summary
Some in Congress are using the debate in Washington, DC on carbon tax to also include additional limits on mercury, nitrous oxide (NOx), and sulfur dioxide emissions (SO2) from coal plants. Many proposals have been floated in Congress (one of which is linked here) to limit these emissions. If any of these proposals were to pass and become law, it will have significant impact on electricity generation.
Analysis
If Congress passes and the President signs a mercury, NOx, and SO2 limiting measure for coal plants, even without passing a CO2 limiting measure, it would have the following affects on the electricity industry:
*Increased pollution control equipment (scrubbers) on coal plants to reduce SO2 emissions, including those on some plants that already have switched to low-sulfur Powder River Basin Coal because it is likely that the current low-sulfur coal mix and scrubbers will not meet the new rules.
*Increased pollution control equipment (SCR/NSCR) on coal plants to reduce NOx emissions.
*Retirement of small and/or inefficient coal plants, rather than incur the high capital retrofit costs versus generating on an alternative or new generating resource.
*Increased pollution control equipment on coal plants to reduce mercury and a great increase in activated carbon usage for mercury collection. This could be especially big if Congress does not allow trading of mercury allowances for compliance in the nation and instead goes with a “command-and-control” requirement across the nation’s coal plants.
*Significant reduction in coal demand and an increase in natural gas demand as the installed generating base changes and the dispatch economics changes. The railroads would see their coal volumes fall as well.
*Increased transmission spending to coincide with serving the new generating resources likely to supplant some of the existing coal plants.
