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line” measures such as switching to cleaner power sources and demand-side management. In contrast, the replacement plan focuses on site-specific emissions cuts at individual power plants. The EPA’s ACE rule offers states several options for candidate technologies, though recommends heat-rate efficiency improvements at existing power plants as the BSER. The ACE rule also raises the threshold of plant upgrades that would trigger an NSR by using a benchmark of hourly emissions rates rather than an annual rate, thereby lowering the regulatory requirements for upgrading existing coal facilities. After finalisation in June 2019, the ACE rule may be subject to legal challenges by states and environmental groups, which could take over a year to reach conclusion. If upheld, the ACE rule will help prevent early closure of coal plants.

The administration in December 2018 also announced a proposal to revise New Source Performance Standards (NSPS) for carbon dioxide (CO2), applied under Section 111(b) of the Clean Air Act. The NSPS rule has been in effect since it was finalised in 2015. The rule established an emissions threshold of 1 400 pounds (635 000 grammes) of CO2 per megawatt-hour (MWh) for new coal-fired generators, which would have required at least partial carbon capture and sequestration (CCS). The new proposal calls for a standard of 1 900 pounds (862 000 grammes) of CO2/MWh for large generators and 2 000 pounds (907 000 grammes) for smaller generators, which would not require CCS. Whether the rule has any material impact remains to be seen, as market conditions already disadvantage new coal plant construction, and none are under consideration currently.

Lastly, the EPA in 2018 also finalised its revision of the 2015 Disposal of Coal Combustion Residuals from Electric Utilities rule (also known as the coal ash rule) for coal plants, which govern how power plants manage coal ash waste from burning coal. The new rule relaxes requirements for plant operators and gives states and the industry more flexibility in waste management.

Fuel security

The DOE in September 2017 issued a notice of proposed rule making (NOPR) that urged the Federal Energy Regulatory Commission (FERC) to develop cost recovery mechanisms for baseload power generators that support grid reliability and resiliency. The proposal specifically called for grid operators, under the direction of FERC, to develop compensation mechanisms for baseload plants that have 90 days of fuel supply on-site, which primarily include coal and nuclear plants.

In response, FERC in January 2018 issued an order that unanimously rejected the DOE’s NOPR on the grounds that it did not provide sufficient evidence of supply risks to the grid. Instead, FERC opened a new proceeding on grid resilience, which is still under way, and directed regional grid operators to undertake a comprehensive, longer-term evaluation of grid resiliency as part of the proceeding (see Chapter 9, “Electricity”).

Emissions reduction efforts for coal-fired generation

The United States places an emphasis on technologies that improve efficiency and reduce emissions from coal-fired generation.

As part of these efforts, the DOE in January 2019 announced that it would fund USD 38 million for cost-shared R&D projects that improve the performance, reliability

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11. COAL

and flexibility of the existing coal fleet (but this funding will focus on efficiency improvements rather than CCUS) (DOE, 2019a).

Refined coal

Among the moves to make coal generation cleaner, Congress, under the American Jobs Creation Act of 2004, put in place a tax credit for refined coal production. Refined coal is coal that has been treated to lower emissions when burned, mainly by increasing mercury oxide production, which can then be captured by existing technologies in coal plants. In order to qualify for the tax credits, producers must certify that burning the refined coal results in 20% fewer NOx emissions and 40% fewer SO2 or mercury emissions compared with untreated coal. The tax credit is adjusted for inflation, and amounted to USD 6.91 per short tonne of refined coal produced in 2017 and USD 7.10 per short tonne in 2018 (EIA, 2019d). The EIA estimates that the production of refined coal grew in 2017 and likely grew again in 2018, accounting for a larger share of overall coal production at 21% over the first three quarters of 2018.

Small-scale coal plants

In August 2017, the DOE announced USD 50 million in funding for two pilot projects to develop transformational coal technologies, for which nine projects were shortlisted under Phase I in February 2018, focused on small-scale applications. Project finalists will move on to Phase II, focused on front-end engineering and regulatory clearances, while Phase III will focus on construction and operation (DOE, 2018).

In November 2018, the DOE’s Office of Fossil Energy unveiled the Coal FIRST (Flexible, Innovative, Resilient, Small and Transformative) initiative, with a focus on developing smaller, more efficient, modular coal plants (50 MW to 350 MW) that have near-zero emissions and are more flexible and better suited to the changing needs of the US grid (DOE, 2019b). These types of plants could also prove beneficial for export to less economically developed countries.

CCUS

The United States has been a leader in advancing CCUS technology for some time. The country has the largest number of large-scale CCUS facilities worldwide, though the bulk of current projects are focused on natural gas processing and industrial facilities rather than coal-fired power plants (for more details on CCUS, see Chapter 6, “Energy Technology Research, Development and Demonstration”).

As part of the Bipartisan Budget Act that passed in February 2018, Congress extended and significantly increased tax credits for CCUS under Section 45Q of the Internal Revenue Code (see Chapter 6 more information).

The DOE’s Office of Fossil Energy directs the Office of Clean Coal and Carbon Management, which promotes R&D efforts that support the use of fossil fuels in more environmentally and economically advantageous ways. In the longer term, the administration expects that progress on CCUS technologies can be applied to both new and existing coal-fired power plants.

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