Evolving environmental policies will have big impact on power generation industry
Policies and regulations support shift from fossil fuels to clean energy
Within the power generation industry, policies are rapidly changing to require a higher percentage of clean energy plants — such as wind, solar and more recently battery storage — to replace various combustion technologies like boilers, once-through cooling plants, and simple-cycle and combined-cycle turbines. Furthermore, in many states, especially in California, additional policies are being proposed to move up the effective year the percentage of clean energy plants must be implemented.
This greatly impacts the power generation industry, as existing fossil-fueled power plants are not able to obtain renewed power purchase agreements (PPA) and thus will switch to merchant plants to sell power on the open market. However, operations and management (O&M) companies are seeking O&M contracts for wind, hydro, solar and battery storage to add to their operating portfolio.
Gas turbine units, especially those with simple-cycle technologies, are implementing “fast-start” and “low-load” capabilities in order to augment power, as renewable units reduce or stop daily generation. These operating scenarios have to be evaluated against existing air permit limits and requirements to ensure compliance can be met, which often then necessitates operational testing. Permit modifications may be required to adjust permit language in order to accommodate for these specific operating scenarios.
Biomass plants play an important role in utilizing forest and agriculture wood waste to reduce open burning and minimize waste in landfills. Plant operators and managers have been working closely with policy makers to ensure biomass is included in the renewable mix. Many companies are also exploring new technologies, such as carbon capture and liquid hydrogen at biomass plants, to find the interconnections and implement them throughout the infrastructure.
Top predictions 2021
- A big push to move up the clean energy compliance date. For instance, in California, we can expect to see a push in legislature to get to 100% clean electricity well ahead of the current target of 2045. Senate Bill 100 requires the whole California economy to be net zero by 2045, and President Joe Biden’s new plan calls for 100% clean electricity nationwide by 2035.
- The power generation industry will place a heavy focus on achieving 24/7 clean energy. This year, expect to see movement toward a new 24/7 clean energy standard, which will place more focus on the times of day that are not as well served by solar and wind renewables. Currently, those times are dependent on fossil fuel power plants. This will result in a greater need for 24/7 renewables, such as biomass and geothermal, as well as for long-term energy storage.
- The growth of carbon capture technologies and innovation. A recent Lawrence Livermore study spotlighted the need for carbon capture and storage. For states and the nation as a whole to reach their ambitious climate change goals, carbon capture is a must. Carbon capture has encouraging potential and could radically alter the energy landscape because it allows for continued use of highly energy dense and efficient carbon-based fuels (e.g., coal, natural gas and oil) without contributing additional carbon gasses to the atmosphere.
Cost of compliance
The cost of environmental compliance has grown significantly over the last few years, and plants now find themselves in a fragile balancing act between cost and compliance. The main costs associated with environmental compliance can be broken down into the following categories:
- Emissions control equipment operations and maintenance costs, along with emissions monitoring equipment, operations and maintenance. This includes permit fees, control equipment (e.g., baghouse, electrostatic precipitator, stormwater filtration, hazardous waste storage areas, etc.) and monitoring equipment (e.g., continuous emission monitoring, automated storm water monitoring, meter calibrations and more).
- Consumables used for compliance, such as anhydrous ammonia, limestone, waste drums and hazardous waste disposal fees.
- Engineering compliance equipment, which encompasses engineering studies, RATA/source emissions testing, and toxic emissions inventory testing and reporting.
- The labor for record keeping, tracking and compliance monitoring. Within the last two decades, many plants have had to hire a full-time employee whose job is to solely focus on maintaining compliance.
- Regulatory-requested additional emissions testing.
- New and modified emissions and effluent standards. Recent lower limits require power plants to further improve or replace their control equipment prior to limits becoming effective.
Measuring the results
It’s critical to establish environmental metrics to track trends and determine where resources are necessary. Resources include additional budgets for equipment maintenance or replacement, best practice measures (BMP) implementation, the addition of plant staff focused on environmental tasks, and corporate environment support staff to provide immediate and thorough regulatory guidance and support.