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Potential Coal Plant Retirements: 2012 Update

Potential Coal Plant Retirements: 2012 Update

Full Title:  Potential Coal Plant Retirements: 2012 Update
Author(s):  Metin Celebi, Frank Graves, and Charles Russell
Publisher(s):  The Brattle Group
Publication Date: October 1, 2012
Full Text: Download Resource
Description (excerpt):

The energy market outlook and emerging environmental regulations have changed substantially since we last studied the potential for coal plant retirements in December 2010. The decrease in spot and forward gas prices combined with low demand for power have caused projected energy margins and the cost of replacement power to decrease, altering the economics for coal units towards retirement versus retrofit decisions. On the market side, the projected energy margins for coal plants have decreased and the need for capacity has been deferred. On the regulatory front, two of the major Environmental Protection Agency (EPA) rules (CSAPR and MATS) were finalized with less restrictive requirements on the compliance deadlines and equipment than previously predicted. More recently, a federal court order vacated the CSAPR, adding an increased level of uncertainty regarding the timing and requirements under a potential future proposal by the EPA. This recent ruling may increase the role of the EPA’s existing Regional Haze Rule for coal-fired plants in the Eastern Interconnect. In addition, the EPA’s proposed 316(b) rules on cooling water intake structures were less onerous than some predictions with no universal requirement to install cooling towers.

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