Change Environmental Regulatory Policy to Foster R&D and Cost Effectiveness

The recent Supreme Court ruling in the U.S. remanding the air toxic rules due to lack of cost consideration is a wakeup call.  The message is that the whole system is flawed.  It discourages rather than encourages R&D. Invariably the cost estimates prior to regulation turn out to be wrong. So regulations are rarely cost-effective.

EPA recognized that setting arbitrary limits is not cost-effective and so created a “Cap and Trade” system. The trade aspect of this policy was sound, but the cap aspect merely duplicated the problems with conventional regulations where there is no incentive to do better than is required.

All that is needed is to move from “Cap and Trade” to “Create and Trade.”  Those power plants ranking in the lower 50 percent would pay fees to be divided among those in the top 50 percent.  The payments and receipts would be based on ranking.  These payments provide great incentive for the industry to “create” cost-effective solutions.

Mercury reduction would be a very good demonstration of the power of “Create and Trade.”  There are new mercury removal technologies which are much more cost-effective than the ones available at the time of the cost determination.  It was concluded that to move from 85 percent mercury reduction to 95 percent reduction would cost $30,000/lb.  Now the cost may be as low as $1,000/lb.   If the “Create and Trade” rule stated that any company removing more than 85 percent of the mercury would be paid $15,000/lb. for each additional pound removed, there would be a great incentive for power plants to install the most efficient equipment. 

Ultimately the most cost-effective technologies would be installed.  Initially the bar would be set at 85 percent removal but, if it turns out that some companies are making huge profits by obtaining 95 percent efficiency, then it would be time to raise the bar to 90 percent.

There is almost no supplier generated air pollution control research in the U.S.  The creation of a back-end mercury module for high efficiency is a fortuitous anomaly.  The creation of a “Create and Trade” system would generate many new cost-effective technologies. It would also make the U.S. again the center of air pollution technology.  This is a position it is ceding to China presently.

The concept is equally valid for the upcoming EPA rules on CO₂ emissions.  Coal-fired power plants can make effective reductions in CO₂ emissions by increasing efficiency.  So there are ways to make cost-effective reductions in CO₂ emissions per unit of power produced.  Rather than set arbitrary limits a “Create and Trade” system would encourage R&D and use of the most cost-effective technologies.  The national strategy is to continue to operate some 200,000 MW of coal-fired power plants. An incentive program to increase efficiency would result in significant reduction of CO₂ emissions and be positive rather than negative for the economy.

For more information on this subject click on 5AB Air Pollution Management.

Headlines for Utility E-Alert – June 26, 2015

UTILITY E-ALERT

#1229– June 26, 2015

Table of Contents

COAL – US

·       LA Dept. of Water & Power ready to sell its Percentage in Arizona Coal-fired Power Plant

·       Safe Basin closure Update by Duke Energy

·       Arizona Public Service settles Pollution Suit over Navajo Coal-fired Power Plant

·       Alabama Power reaches Coal-fired Power Plant Emissions Control Settlement

COAL – WORLD

·       BHEL commissions 250 MW Unit of NTPC's Bongaigaon Power Plant in India

·       Sharyn Gol JSC (Mongolia) announces the Commissioning of its Coal Wash Plant and Execution of an Agreement to Export Washed Coal to South Korea

·       Pakistan approves construction of 1,400 MW Coal-based Power Project in Thar

GAS/OIL – US

·       Wisconsin Public Service seeking Air Permit to upgrade Two Units at Fox Energy Center

GAS/OIL – WORLD

·       AP Transco buys out GVK Power's Plant in Andhra Pradesh

·       Lotte E&C wins US$230 Million Order from Indonesia

·       Siemens supplying a Gas and Steam Turbine Package to Ciner Kazan Soda in Turkey

NUCLEAR

·       EDF granted Permission to operate Unit 3 of Tricastin Nuclear Power

·       DOE issues remaining $1.8 Billion Nuclear Loan Guarantee for Plant Vogtle

BUSINESS

·       Novinda names Michael Rosenberg New CEO

·       Entergy New Orleans in line to get Low-cost Power from Arkansas Power Plant 

·       PetroVietnam acquires Chevron’s Assets in Vietnam

·       Hearing set on 1,050 MW Gas-fired Power Plant for Salem Township, PA

·       $20 Billion Market for Air Pollution Solutions

HOT TOPIC HOUR

·       Hot Gas Filter Discussion will be continued on July 2

·       “Total Solutions” is the Hot Topic Hour on August 6

·       Upcoming Hot Topic Hours

For more information on the Utility Tracking System, click on:  http://home.mcilvainecompany.com/index.php/databases/2-uncategorised/89-42ei

McIlvaine Hot Topic Hour Registration

On Thursdays at 10:00 a.m. Central time, McIlvaine hosts a 90 minute web meeting on important energy and pollution control subjects.  These Webinars are free of charge to owner/operators of the plants. They are also free to McIlvaine Subscribers of Power Plant Air Quality Decisions and Utility Tracking System.  The cost for others is $300.00 per webinar.

See below for information on upcoming Hot Topic Hours.  We welcome your input relative to suggested additions.

Click here for the Subscriber and Power Plant or Cement Plant Owner/Operator Registration Form

Click here for the Non-Subscribers Registration Form

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Bob McIlvaine
President
847-784-0012 ext 112
rmcilvaine@mcilvainecompany.com
www.mcilvainecompany.com