Study Finds Compliance With Utility MACT Will be Challenging in the Midwest

A new study prepared by the Brattle Group for the Midwest Independent System Operator (MISO), finds that “meeting MATS will be a major challenge for the industry, states, and MISO for a number of reasons. The industry will need to install retrofits at a pace and scale that exceeds the historical demonstrated capability, while the system operator is likely to experience a substantial operational challenge in the transition.”

The study explains that nation-wide estimates project that 93-248 GW of coal (measured in Wet Flue Gas Desulfurization (FGD) equivalent GW) will require environmental controls upgrades, while the MISO projects 51-58 Wet FGD equivalent GW will require upgrades in the Midwest alone. Many coal units will retire rather than make the required capital investments, with about 30 GW having already announced retirement plans nationwide. To replace this retiring generation and meet load growth requirements by 2015, another 30-84 GW of new generation may be needed nationally, while 5-26 GW may be needed in MISO.

With respect to the timeline needed for retrofits, the study found that some types of upgrades can be implemented before 2015 without difficulty, including activated carbon injection (ACI) and dry sorbent injection (DSI), which can be implemented within approximately a year and a half. However, most projects have a longer lead time of approximately 3-4 years, including wet and dry FGD, baghouse, electrostatic precipitator (ESP), and selective catalytic reduction (SCR), as well as new gas combustion turbines (CTs) and combined cycles (CCs). For the retrofit projects that need state commission approval of cost recovery to move forward, their ability to meet the MATS deadline will in part depend on the states’ speed of approval when evaluating a large number of projects at once.

The study projects the rate of new construction and retrofits in the Midwest over the next several years will exceed the historical average by 51 to 162 percent. The study also highlights concerns over the possible scarcity of skilled boilermakers to perform retrofits.

Electric reliability is also a concern in the Midwest given the longer periods of time plants will need to shut-down in order to bring retrofits online. The impact of these longer outages is further exacerbated by the fact that a substantial fraction of coal plants are likely to retire rather than comply, hence reducing the system’s ability to absorb additional outages.

This post was authored by GLLF staff attorney Emily Kelchen.