On December 16, 2011, the Environmental Protection Agency (EPA) finalized its Mercury and Air Toxics Standards (MATS) rule, which establishes standards to regulate emissions from existing and new coal- and oil-fired power plants.
The first ever national standards aimed at reducing mercury and other toxic air pollutants from these facilities, MATS became effective April 16th, 2012 and applies to all coal- and oil-fired electric generating units (EGUs) that produce 25 megawatts or more.
For existing facilities, compliance must be met within three years of the effective date, with an allowable one-year extension for the installation of controls if needed, for facilities that qualify. Going forward, any new facilities will be required to comply with MATS upon startup.
According to EPA, power plants are the predominant source of mercury pollution in the U.S. today, contributing 50% of total mercury emissions and more than 75% of acid gas pollution. Although newer power plants and approximately 60% of older plants already control their emissions, the remaining 40% of older facilities lack pollution controls.
MATS is expected to effectively eliminate 90% of the mercury emissions from coal burning plants and approximately 88% of overall acid gas emissions.
1,400 Power Plant Generators Must Be Updated to Meet MATS Requirements
By EPA’s estimates, there are approximately 1,400 coal and oil-fired EGUs at 600 power plants that will be impacted by MATS. EPA anticipates most plant owners will bring plants into compliance by following one of several paths including the installation of new emissions controls technologies, upgrades to existing emissions controls, and fuel switching.
It will be up to affected plant owners to determine the best course of action for their facilities, but MATS is likely to intensify the already growing trend of fuel switching, from oil and coal to natural gas.
Clean Burning, Low-Cost Natural Gas
When compared to typical emissions from coal-fired power generation, natural gas produces approximately half the amount of carbon dioxide, and about a third the amount of nitrogen oxides. And in stark contrast to coal- and oil-firing, emissions of mercury related compounds produced by burning natural gas are considered negligible by EPA. In fact, gas-burning power generators are not subject to MATS.
Coal burning currently accounts for the lion’s share of power generation supplied in the U.S., approximately 45% according the U.S. Energy Information Administration (EIA). However, in light of the on-going shale boom, the lower cost of natural gas in and of itself has led to an uptick in the retirement of U.S. coal-fired generators.
And while facility owners have many factors to consider when deciding between retrofitting an existing power plant, replacing it entirely or switching to natural gas, the current circumstances which include aging, less-efficient coal plants combined with a market where EIA predicts natural gas prices will remain low relative to both coal and oil into the year 2040, makes natural gas an enticing choice.
Add to this the potential capital investment required to bring coal-fired plants into compliance with MATS—in addition to other potential future regulatory demands such as carbon control and sequestration, a possibility cited by EIA in its 2013 Energy Outlook—and the decision to switch to natural gas becomes even more compelling. It comes as no surprise EIA predicts natural gas-fired plants will account for the bulk of new capacity additions—63%—from 2012 to 2040, while coal will account for only 3%.
“There is no question natural gas has become the sweetheart of the energy market,” said Greg Ezell, Vice President, Business Development, TransTech Energy, “And as the 2015 deadline for MATS compliance nears, we anticipate a growing surge in fuel switching,”
Added Ezell, “At TransTech, we’ve been ramping up capacity to meet with growing Propane-Air/SNG system implementation demand as well as related NGL and LPG storage demand”
Natural Gas Risk Management, Cost-Savings
For EGU owners converting to natural gas, TransTech Energy provides world-class infrastructure to support the use of synthetic natural gas (SNG) as both a peak-shaving and stand-by fuel solution, letting owners convert low-cost propane to SNG—which can seamlessly replace natural gas during times of peak demand or natural gas supply interruption.
In addition to offering a flexible way to manage the risks associated with both natural gas supply-side issues and price fluctuations, SNG peak-shaving and stand-by fuel systems can in some cases also allow EGU owners to negotiate even lower costs for natural gas by having an “interruptible rate” which allows natural gas use to be curtailed during times of peak demand.
For some, who plan to transition to natural gas but are awaiting the construction of natural gas pipelines and infrastructure in their geographies, SNG can also be used as a transitional ‘bridge fuel’. With the installation of LPG storage and vaporization equipment and SNG blending systems, EGU owners can convert coal- and oil-fired units to gas-fired generators now, in advance of natural gas infrastructure—and move away from emissions-heavy coal and crude sooner.
TransTech Energy’s in-house engineering and construction team designs propane-air/SNG plants for government, utility, municipal, manufacturing and industrial applications. TransTech also offers turnkey design/build solutions for LPG & NGL storage plants and terminals, providing complete end-to-end propane transportation, storage, and SNG blending systems to ensure mission-critical, constant fuel supply for EGU owner power generation needs.
Contact us at 888-206-4563 to speak with one of our SNG or LPG/NGL Solutions Experts