New clean air rules could force up to 500 US coal plants to shut spurring billions of dollars in construction of cleaner plants to replace them, according to a study. Pollution laws including the Clean Air Interstate Rule that caps emissions of smog components sulfur dioxide and nitrogen oxides (NOX and SOX) could shut the plants in 25 states, according to the study by Colorado-based E3 Consultants, which advises energy companies.

The study, which was funded by E3, said that capital and construction costs to build cleaner new plants could reach well over $50 billion over the next five or 10 years. Jim Short, one of the report s authors, said states most hit would be Texas and most of the states east of the Mississippi.

Mercury emissions limits being imposed in 2018 add to the costs of operating older dirty plants. And potential global warming gas emissions caps, such as proposed by the seven-state Regional Greenhouse Gas Initiative in the Northeast, or potential nationwide limits, would make running such plants even dearer. Companies with aging coal plants may have been betting that NOX and SOX emissions markets would allow them to simply buy credits from newer cleaner plants for the right to pollute. But they could be mistaken, said Short.

"Allowances will be in very short supply and will be expensive," he said. "Where are the allowances going to come from? The answer is retrofits and retirements (of old plants)." E3 believes that most of the old plants will be replaced by cleaner coal plants that can burn the fuel more efficiently and to which carbon dioxide capturing can be added more cheaply than conventional coal plants.
(Planet Ark, 02/02/06)