Subject: Number of power plant scrubbers?
100,000 MW of scrubbers with IAQR but not necessarily by 2010
McIlvaine is forecasting the need of 100,000 MW of scrubbers to meet IAQR. If banking could extend the deadline from 2010 to 2013, it would make a substantial difference in the peak order years of 2006 and 2007. There is a quantity of banked allowances already available to utilities. Of greater importance is the concept of installing one scrubber early and one scrubber late. Let’s say a utility needs 4,000 ton reduction from each of two units to achieve 8,000 tons/yr. reduction. If two units are installed in 2010, the reduction by 2013 will be 3 x 8000 or 24,000 tons from the base quantity emitted in the 2007-13 period. The same 24,000 tons can be achieved by installing one scrubber with a 4000 tpy reduction in 2007 (6 yrs. x 4000 tpy).
A number of utilities are on a fairly fast track to operate scrubbers as early as 2006 or 2007. These same utilities will be banking enough allowances to extend the investment timetable to 2013. On this basis, the scrubbers in place by 2010 could only be 50,000 MW more than is installed now. But the additional units would be required in the 2010-13 timeframes.
This spreading of the work will result in lower costs and less pressure on boiler makers and other contractors. So it will make for a much more orderly market. Another factor, which will contribute to fewer scrubbers, will be efforts to increase removal efficiencies for those units which are already installed and those which will be installed. A 5 percent increase in efficiency overall would mean 5 percent fewer scrubbers. But this is a small quantity compared with the impact of early scrubbing and banking described above.
So, McIlvaine still believes that close to 100,000 MW of new scrubbers will result from IAQR. As much as 40,000 MW of this total could be installed after 2010 but would still be as a result of the 2010 budgets. The McIlvaine plant-by-plant listing of projected scrubber installations is being revised. As utilities announce early scrubbing projects, we will start extending our estimates for the installation dates of other scrubbers at these plants. We, therefore, hope to maintain as accurate as possible a schedule for all 100,000 MW.
There are many variables. One is retirement of bankable allowances. North Carolina will likely retire any allowances generated by their program. It is unlikely that New England states are going to encourage westerly states from scrubbing by allowing their utilities to sell allowances to their western neighbors. So these and other variables will make us cautious about postponing forecasted installations.
Mercury and fine particulate initiatives could insure 100,000 MW of scrubbers by 2010
The postponement of scrubber installations is not predicated on any multi pollutant scenario. If the McIlvaine escalating payment plan for mercury or fine particulate was passed, then early installation of scrubbers would be more attractive. Also if a 90 percent MACT standard for mercury was promulgated for 2010, there would be every reason to install all 100,000 MW of scrubbers by this date. In fact, a tough MACT mercury standard would make it attractive for all plants to consider scrubbers. We have pointed out that a chloride pre-scrubber could be a very economical way to remove mercury. But if you do not have a post scrubber, you cannot install a pre-scrubber. Also keep in mind that scrubbers remove fine particulate and toxic metals. So multi-pollutant aspects could accelerate scrubber investment.
The Utility Environmental Upgrade Tracking System has detailed forecasts for each projected scrubber installation. You can see examples at: http://www.mcilvainecompany.com/energy.html
We forecast the world market for in FGD: World Markets: http://www.mcilvainecompany.com/air.html#NO27
Bob McIlvaine
847-784-0012