Coal’s future in the eastern interconnection

ICF International

 

New environmental regulations and market forces will be significant challenges for coal-fired generation in the Eastern Interconnection, a new study completed for the Eastern Interconnection States Planning Council (EISPC) concludes.

The report, written by ICF International examines various coal technologies in the context of demand for electricity, the diversity of resources, notably natural gas, and new environmental requirements. The report is intended to be a resource for future EISPC efforts. It includes a summary of ICF’s research exploring the incentives and disincentives faced by coal-fired generating resources. An accompanying white paper goes into further details on these issues.

ICF International submitted the report for consideration by EISPC and NARUC, supported with funding from the U.S. Department of Energy. EISPC consists of the State-level government agencies responsible for siting transmission across the 39 States, including the District of Columbia, within the Eastern Interconnection electricity system.

Noting that nearly 85 percent of the nation’s coal-fired resources are located within the Eastern Interconnection, the report concludes that the outlook for new coal-fired plants is uncertain because of a number of factors, including large capital investment and long lead time for developing new coal plants; shale gas development; new source performance standards for greenhouse gases; and commercial availability of CCS technology.

Of these factors, the ICF report concludes that new environmental regulations and low gas prices are the two principal drivers of the current challenging environment for new and existing coal plants. More than 60 GW of coal capacity is expected to be shut down between 2010 and 2016 because power market prices will not support the required investment in control equipment. Although many states in the Eastern Interconnect have supported coal mining and CCS by providing incentives (tax credits, abatements, grants, inclusion in portfolio standards, etc.), these are not enough to overcome the headwinds posed by environmental regulations and low gas prices.

Click here for report

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