October 21, 2015

Coal Conversion Counties consider implications of new EPA rules

By Annette Tait
The latest U.S. Environmental Protection Agency carbon dioxide (CO2) rules continue to be the hot topic for members of the North Dakota Coal Conversion Counties Association, which met Oct. 13 at the Square Butte Golf Club east of Center. The Coal Conversion Counties coalition was formed to be proactive on behalf of Oliver, Mercer, and McLean counties regarding issues that affect coal production and coal-fired generation.
The program began with a presentation by Lignite Energy Council President and CEO Jason Bohrer, who provided an overview of how EPA requirements are impacting the coal-fired power generation. Bohrer noted that retirement of 200 coal plants as of July 2015 nationwide represents the phase-out of nearly 40 percent of the 523 U.S. coal plants that were in operation just five years ago.
“In North Dakota, lignite is competitive with nuclear energy prices,” Bohrer said, explaining how power plants adjacent to or in close proximity to coal mines all but eliminate transportation costs that increase the cost of coal-powered generation in other parts of the country.
At an average cost of $25.30 per megawatt hour, North Dakota lignite plants provide electricity at a significantly lower cost than all coal ($33.17/mwh) or natural gas ($34.44/mwh). The only slightly less expensive traditional power source is nuclear, at an average cost of $24.55/mwh.
Bohrer went on to explain that the EPA’s new CO2 rules imposes strict emissions limits on new power plants, requires existing power plants to undergo efficiency improvements, and requires electric utilities to rely more heavily on natural gas, and invest on renewable energy sources such as wind and solar to bring utilities into compliance. Many North Dakota coal-generation plants made significant investments in reducing CO2 emissions in an effort to comply with earlier reduction requirements. Others chose to cease operations.
“The bottom line is that this could cost [consumers] upwards of $1,200 per year in energy costs,” Bohrer said, noting that the projection was based on an analysis of an earlier version of the rule. “The proposed version required a reduction of 11 percent. The final rule gave us a goal of 45 percent, so you can imagine that [estimated] $1,200 a year in energy costs will go up.”
Bohrer went on to provide an overview of the options available to North Dakota, and what it means to the coal industry.


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