Report predicts retirement of many coal plants as a result of new regulations
- October 10, 2011
Fairfax County-based ICF International has issued a study predicting that coal-fired plants producing up to 50 gigawatts of power will be retired in the next two decades as a result of new Environmental Protection Agency regulations.
Nonetheless, ICF, a provider of consulting services and technology solutions to government and commercial clients, said in its Integrated Energy Outlook for the third quarter that it expects U.S. coal production and prices will remain stable.
The study highlights the impact of the U.S. Environmental Protection Agency’s (EPA) proposed regulations and the growth of shale natural gas production.
The report analyzes the EPA’s Cross State Air Pollution Rule, which was revised on Oct. 6. The Energy Outlook also analyzes the proposed Air Toxics Rule, coal combustion residuals, and cooling water intake structure standards.
Although the ICF says that the impact of these rules remains unclear, they could lead to the retirement of a total of approximately 50 gigawatts of coal-fired power. That total includes retirements that have already been announced.
However, the report does not agree with projections that EPA regulations will severely hurt U.S. coal production. Instead, ICF said demand for coal would remain strong, especially for low-sulfur Powder River Basin coal and low-cost, high-sulfur Illinois Basin coal.
The report also predicts that shale gas production will continue to grow rapidly. However, natural gas prices are expected to remain low until emissions regulations prompt gas demand growth in the power sector.
Despite the continued growth in natural gas use, the study finds that escalating renewable portfolio standards in California and the eastern U.S. will lead to continued growth in renewable generation capacity and firming renewable energy credit market prices.