Upgrade Costs Doom Older Plants

Wall Street Journal
23 December 2011
By Rebecca Smith

Most of the coal-fired plant capacity facing retirement consists of smaller, older power-generating units that can't bear a major expense, especially with today's low power prices.

At Duke Energy Corp.'s Beckjord plant on the Ohio River, for example, none of the six coal units have scrubbers. Beckjord's six generating units were built between 1948 and 1969, when few pollution controls were required.

Major upgrades made after 1974 in Ohio were supposed to trigger federal and state requirements that called for installation of advanced pollution-control equipment. But court records show that Duke and its predecessor, Cincinnati Gas & Electric Co, successfully beat back EPA efforts to make it install more equipment at Beckjord at least five times between 1985 and 1994.

Duke estimates that bringing the plant into compliance today would cost $400 million for scrubbers, which remove sulfur dioxide and mercury from flue gasses, $200 million for "bag houses" to extract coal particulates and mercury and $200 million to $250 million for equipment to remove nitrogen oxides. That is more than the between $500 million and $750 million it would typically cost to build a new gas-fired power plant. And that is why Beckjord is on the retirement list.

For the mostly bigger, newer coal-fired plants that remain open, Duke expects to spend $6 billion in total on environmental upgrades for them. As a result, its emissions profile will change dramatically, even though it expects its total generating capacity to rise by 12%. By 2017, it says, sulfur-dioxide pollution from its power plants will tumble by two-thirds and nitrogen-oxide emissions will fall by half compared with 2011 levels. Total mercury emissions will drop 73%, over the same period.

The EPA is working on more rules that will affect coal-burners like Beckjord, including one intended to prevent coal-ash toxins from polluting water supplies. Beckjord's site near the Ohio River holds so much coal waste that if it were possible to stack it all on a one-acre lot, the pile would rise 1,750 feet in the air, or to a level three times as tall as the Washington Monument. Duke says it doesn't yet know what it will do with the waste when Beckjord closes.