February 2013 - Power Air Quality Insights 95

Implementation of the Utility MACT Rule is Hot Topic Hour on Thursday, February 28, 2013

Late in December of 2011, the U.S. EPA released the final “Utility MACT” rule also referred to as the “Mercury and Air Toxics Standards” (MATS) rule establishing mercury and air toxics standards for coal- and oil-fired electric generating units (EGU) larger than 25 MW. Of all the regulations facing the power generation industry, the Utility MACT is likely the single rule with the greatest potential impact on the industry.

All existing EGUs will have three years to comply with the standards, although the rule allows states to grant specific units an additional year for equipment installation. Industry experts predict that all coal-fired units would be required to install a scrubber (wet or dry), activated carbon injection (ACI) and a baghouse/fabric filter for compliance with the MACT at a cost far greater than the 9.6 billion dollars that EPA estimated in the rule making. Many persons in the utility industry and others are concerned that the timeframe for achieving compliance and the cost of compliance will force utilities to shut down many EGUs and cause serious issues with the reliability of electric supply.

The publication of this rule raises many serious questions for the utility industry. What is the best strategy to adopt? Will legal challenges delay or soften the rule? What do we need to do to comply while maintaining our power supply commitments? Can we achieve compliance in this short timeframe and at which plants? What is the most economic solution for our investors or ratepayers?

The following speakers will discuss the current status of legal challenges to the rule and help us assess and understand the impacts of the new EGU MACT rules such as legal issues related to not achieving compliance in time, cost implications, power reliability issues, how to use the available options in the revised rule and key issues to be considered when developing a timely compliance strategy. Also coordination with other rules such as CASPR and the technical solutions for maintaining compliance for existing units as well as the control technologies and equipment that can be utilized to achieve the emissions limits imposed by the MACT for new plants being considered.

Block M. Andrews, Strategic Environmental Solutions Associate, Burns & McDonnell Engineering, will discuss current MATS implementation, risks and strategic considerations.

Richard (Rich) A. Mimna, Ph.D, Senior Research Associate at Calgon Carbon Corporation, will present “How to Guarantee the Lowest Cost Activated Carbon Treatment Solution.” Activated carbon injection (ACI) is certainly one of the most proven and mature technologies for mercury removal from coal-fired flue gas. However, with so many different variables that can impact activated carbon’s mercury capture performance, Calgon has designed a variety of carbon products to overcome specific problems and meet customer targets such as the presence of SO₃ and the need to preserve flyash quality for use in Portland cement. Other products are designed to work in conjunction with other technologies such as boiler chemical additives or dry sorbent injection. That said, ascertaining which product will ultimately deliver the best cost performance at a particular site can still be a challenge. This is best determined through testing. This presentation will describe how to design and optimize an activated carbon testing program to arrive at the most cost effective emissions control solution and present actual case studies and results of testing programs.

Ann Weeks of the Clean Air Task Force, will discuss the history and current status of the MATS Rule and the expected timeline for both the current litigation and for MATS Rule implementation.

Jarret McClendon, Applications Engineer at Natronx Technologies, LLC, will present “HCl Reduction with Trona for MATS Compliance”.

To register for the February 28, 2013 “Hot Topic Hour” at 10:00 a.m. Central time, click on:

On Thursday at 10:00 a.m. Central time, McIlvaine hosts a 90 minute web meeting on important energy and pollution control subjects. Power webinars are free for subscribers to either Power Plant Air Quality Decisions or Utility Environmental Upgrade Tracking System. The cost is $125.00 for non-subscribers. Market Intelligence webinars are free to McIlvaine market report subscribers and are $400.00 for non-subscribers.

DATE	Non-Subscribers Cost	SUBJECT	Webinar Type
February 28, 2013	$125.00	Implementation of the Utility MACT Rule	Power
March 7, 2013	$125.00	HRSG Design, Operation and Maintenance Considerations	Power
March 14, 2013	$125.00	Inlet Air Pretreatment for Gas Turbines	Power
March 21, 2013	$125.00	Industrial Boiler MACT Impact and Control Options	Power
March 28, 2013	$125.00	Mercury Measurement and Control	Power
April 4, 2013	$125.00	Fabric Selection for Particulate Control	Power
April 11, 2013	$125.00	Air Pollution Control for Gas Turbines	Power
April 18, 2013	$125.00	Multi-pollutant Control Technology	Power
April 25, 2013	$125.00	Control Technologies for Fine Particulate Matter	Power
May 2, 2013	$125.00	Flyash Pond and Wastewater Treatment Issues	Power
May 9, 2013	$125.00	Clean Coal Technologies	Power
May 16, 2013	$125.00	Power Plant Automation and Control	Power
May 23, 2013	$125.00	Cooling Towers	Power
May 30, 2013	$400.00	Air Pollution Control Markets (geographic trends, regulatory developments, competition, technology developments)	Market Intelligence
June 6, 2013	$125.00	Report from Power-Gen Europe (update on regulations, speaker and exhibitor highlights)	Power
June 13, 2013	$125.00	Monitoring and Optimizing Fuel Feed, Metering and Combustion in Boilers	Power
June 20, 2013	$125.00	Dry Sorbent Injection and Material Handling for APC	Power
June 27, 2013	$400.00	Power Generation Forecast for Nuclear, Fossil and Renewables	Market Intelligence
July 11, 2013	$125.00	New Developments in Power Plant Air Pollution Control	Power
July 18, 2013	$125.00	Measurement and Control of HCl	Power
July 25, 2013	$125.00	GHG Compliance Strategies, Reduction Technologies and Measurement	Power
August 1, 2013	$125.00	Update on Coal Ash and CCP Issues and Standards	Power
August 8, 2013	$125.00	Improving Power Plant Efficiency and Power Generation	Power
August 15, 2013	$125.00	Control and Treatment Technology for FGD Wastewater	Power
August 22, 2013	$125.00	Status of Carbon Capture and Storage Programs and Technology	Power
August 29, 2013	$125.00	Pumps for Power Plant Cooling Water and Water Treatment Applications	Power

Coal-fired Power Plant Retirements will be Significant but Not a Dominant Factor in Future Capital Expenditures

Hundreds of coal-fired power plants have been or are going to be retired. The peak year will be 2015 when just fewer than 70 units are slated for retirement or switch to natural gas. McIlvaine tracks each retirement initiative along with upgrade expenditures at each plant in the Utility Environmental Upgrade Tracking System. (www.mcilvainecompany.com)

Plant Name	EPA unit id	State	Size MW	Plant Startup
Ashtabula	7	OH	46	1972
Avon Lake	12	OH	680	1970
B C Cobb	4	MI	156	1956
B C Cobb	5	MI	156	1957
Big Cajun 2	2B2	LA	559.1	1981
Big Sandy	BSU2	KY	816	1969
BL England	2	NJ	163.2	1964
Carbon	1	UT	75	1954
Carbon	2	UT	113.6	1957
Colbert	1	AL	200	1954
Colbert	2	AL	200	1955
Colbert	3	AL	200	1955
Colbert	4	AL	200	1955
E C Gaston	1	AL	250	1960
E C Gaston	2	AL	272	1960
E C Gaston	3	AL	250	1961
E C Gaston	4	AL	250	1962
Eastlake	1	OH	123	1953
Eastlake	2	OH	123	1953
Eastlake	3	OH	123	1954
Eastlake	4	OH	208	1956
Eastlake	5	OH	680	1972
Harbor Beach	1	MI	108	1968
Harllee Branch	3	GA	544	1968
Harllee Branch	4	GA	544	1969
Huntington Beach	1	CA	217.6	1958
Johnsonville	1	TN	125	1951
Johnsonville	2	TN	125	1951
Johnsonville	3	TN	125	1952
Johnsonville	4	TN	125	1952
Johnsonville	5	TN	147	1952
Johnsonville	6	TN	147	1953
Lake Shore	18	OH	256	1962
McManus	1	GA	50	1952
McManus	2	GA	94	1959
Miami Fort	6	OH	168	1960
New Castle	2	PA	40.2	1947
New Castle	3	PA	98	1952
New Castle	4	PA	114	1958
New Castle	5	PA	136	1964
North Branch	1A	WV	74	1992
North Branch	1B	WV	74	1992
Portland	1	PA	161.5	1958
Portland	2	PA	233	1962
Pulliam	5	WI	50	1949
Pulliam	6	WI	63	1951
Ratts	1SG1	IN	116.5	1968
Ratts	2SG1	IN	166.5	1968
Shawnee	1	KY	175	1953
Shawnee	2	KY	175	1953
Shawnee	3	KY	175	1953
Shawville	1	PA	132.5	1954
Shawville	2	PA	132.5	1954
Shawville	3	PA	187.5	1959
Shawville	4	PA	187.5	1960
Silver Lake	3	MN	25	1962
Silver Lake	4	MN	54	1969
Sunbury	1A	PA	75	1949
Sunbury	2A	PA	75	1949
Sunbury	3	PA	103.5	1951
Sunbury	4	PA	156.2	1953
Syl Laskin	1	MN	58	1953
Syl Laskin	2	MN	58	1953
Titus	1	PA	75	1951
Titus	2	PA	75	1951
Titus	3	PA	75	1953
W C Beckjord	3	OH	125	1954
W C Beckjord	4	OH	163	1958
W C Beckjord	5	OH	240	1962
W C Beckjord	6	OH	434	1969
Weston	1	WI	60	1956
Weston	2	WI	81.6	1960
Widows Creek	6	AL	141	1954
Yates	Y1BR	GA	100	1950
Yates	Y2BR	GA	100	1950
Yates	Y3BR	GA	100	1953
Yates	Y4BR	GA	125	1957
Yates	Y5BR	GA	125	1958
Yorktown	3	VA	882	1974

The power plants planning to retire in 2015 are mostly more than 50 years old. Some will be 65 years old by the 2015 retirement date. Most are small with some as small as 25 MW. The average is less than 200 MW. The total capacity being retired in 2015 (the peak year) is less than five percent of the total coal-fired capacity in the U.S.

While all the power plants listed have announced plans to retire or switch to gas, there are still some potential routes whereby these plants could again burn coal. NRG Energy has committed to burning natural gas at one of the Big Cajun plants. But the best hedge may be to just use natural gas in the existing coal-fired boiler rather than build the gas turbine to replace it. It is an inefficient way to use natural gas, but if the gas use will only be for a few years, then it can be an attractive alternative.

Another option is to build the gas turbine but mothball the existing plant in case it is needed in the future. After the experience a decade ago where natural gas prices rose quickly to levels which made electricity generation from gas highly unprofitable, most utilities want to retain a balanced mix of fuel sources.

Sales of selective catalytic reduction (SCR) and selective non-catalytic reduction (SNCR) NO_xcontrol systems plus the associated catalyst will be $5.5 billion in 2014. This is the latest forecast in NO_x Control World Markets published by the McIlvaine Company. (www.mcilvainecompany.com)

SCR system and catalyst revenues will exceed $4.9 billion. SNCR system revenues will exceed $600 million. These totals do not include the revenues for the sale of ammonia and urea. They also do not include SCR systems for mobile vehicles which are covered in another McIlvaine report.

Most of the expenditures will be by owners of coal-fired boilers. However, the percentage growth rate in the gas turbine segment will be higher than for coal. China will continue to be the largest purchaser of systems. It has held this lead for some time. But it is only recently that it also became the leading purchaser of replacement catalysts.

A strong segment in the industry is the treatment of existing catalyst for reuse. Cleaning, rejuvenation and regeneration are the three treatment options. Treatment is reducing the market for new catalyst. On the other hand, the rapid growth for systems has challenged catalyst manufacturers to keep up with demand. Many new catalyst manufacturing plants have been established in China.

The Chinese market for new systems has already exceeded that of the former leader (U.S.). China is committed to install SCR on most of its coal-fired power plants. The U.S. still has 40 percent of its capacity without SCR and will, therefore, remain an attractive market.

The cement industry will not be a major purchaser of SCR in 2014, but is likely to accelerate purchases in future years. The industry is already purchasing many SNCR systems.

The revenues are also expanding due to a new role for selective catalytic reduction. Purchasers are willing to pay more for catalyst which will reduce the conversion of SO₂ to SO₃. At the same time, they are also willing to pay more for catalyst which will oxidize mercury. Most suppliers are offering these options.

All around the country utilities are setting up programs to purchase solar energy. McIlvaine tracks these developments in Renewable Energy Projects and Update.

Georgia Power filed a new solar initiative, the Georgia Power Advanced Solar Initiative ("GPASI"), with the Georgia Public Service Commission (PSC). If approved, the initiative would create the largest voluntarily developed solar portfolio from an investor-owned utility. Through GPASI, Georgia Power would acquire 210 megawatts of additional solar capacity through long term contracts over a three-year period.

To meet the target of 210 megawatts, Georgia Power's Utility Scale program would purchase 60 megawatts annually for three years through a competitive request for proposal (RFP) program with projects ranging in size from 1-20 megawatts. By as early as 2013, a Distributed Scale program would provide opportunities for up to 10 megawatts per year of smaller solar projects with specific reservations for Small Scale (less than 100 kW) and Medium Scale (100-1,000 kW) projects.

RFPs for the Utility Scale program will be conducted in 2013, 2014, and 2015, and require commercial operation dates in 2015, 2016 and 2017. Georgia Power could begin signing solar contracts under the Distributed Scale program as early as first quarter of 2013.

Developed in cooperation with the PSC, the GPASI will complement the company's existing solar resources, which include leading-edge research and demonstration projects and a 50-megawatt Large Scale Solar program already in place.

Detroit Edison has issued a Request for Proposals (RFP) to purchase one or more large solar photovoltaic installation as part of its utility-owned SolarCurrents program.

The utility is seeking photovoltaic installations that can range in size from 500 kilowatts to 2 megawatts.

Detroit Edison already owns and operates a number of large solar installations, including projects at Monroe County Community College, General Motors' Detroit-Hamtramck Assembly Plant, Ford Motor Co.'s Wayne Assembly Plant and Blue Cross Blue Shield of Michigan's downtown Detroit parking garage. The company also has several projects on DTE Energy property.

DTE Energy's company-owned SolarCurrents pilot program calls for generating 15 megawatts of photovoltaic electricity throughout Southeast Michigan by 2015 as part of the company's plan to meet Michigan's renewable energy goals.

The RFP will be conducted in two steps. The first will identify potential sites and the second will seek design and pricing information for the most desirable sites. Solar installations proposed in response to the RFP must be in Detroit Edison's service area, and current owners of property must be full-service bundled electric customers. Preference will be given for projects in Detroit.

This is the third year that FPL has offered rebates for residential and business customers who install solar water heating or solar photovoltaic (PV) systems as part of a pilot program approved by the Florida Public Service Commission to help reduce energy consumption and peak demand.

Rebate reservations for all available 2013 funding will be issued on a first-come, first-served basis. Interested customers must apply online for a reservation and then complete the required process to receive a rebate.

"We expect all funding for next year to be reserved quickly so interested customers should plan to apply as soon as the application period opens," said Marlene Santos, FPL vice president of customer service.

After the available funding has been fully reserved, a limited number of customers who did not receive a reservation will be placed on a "standby list" in the order in which their applications were received. Customers will be notified if they are on the standby list, and they will be contacted should funds become available due to cancelled reservations.

In addition to rebates, FPL's 2013 solar program supports solar installations at schools, solar water heating for low-income customers, and community renewable energy research and demonstration projects.

Economists at The Brattle Group announced that they will administer the Request for Proposal (RFP) process for the purchase of 14,500 Solar Photovoltaic Alternative Energy Certificates (SPAECs) annually over a ten-year period on behalf of FirstEnergy's Pennsylvania Utilities. Specifically, FirstEnergy seeks to purchase 2,000 SPAECs annually for Pennsylvania Power Company (Penn Power), 7,000 SPAECs annually for Pennsylvania Electric Company (Penelec), and 5,500 SPAECs annually for Metropolitan Edison Company (Met-Ed).

Bidders in this RFP can offer to sell tranches of SPAECs, where each tranche represents a commitment to sell 500 SPAECs annually over a ten-year period. Economists at The Brattle Group will act as the Independent Evaluator for this RFP process and additional RFP processes to be conducted in 2013.

191 Waukegan Road Suite 208 | Northfield | IL 60093
Ph: 847-784-0012 | Fax: 847-784-0061

Industry	2014
Coal-Fired Power	4,380
Gas Turbines	279
Incinerators	64
Industrial Power	125
Other Industries	93
Total	4,941