First wave of coal plant closures due to EPA rules

Kentucky power companies Louisville Gas and Electric and Kentucky Utilities said on Friday new, stricter, federal environmental regulations will force them to retire three older, coal-fired power plants and recoup the $4 billion in EPA compliance costs through future price hikes for customers.

A recent industry-sponsored study showed the US coal ash industry could suffer $110bn in lost economic activity and cut 300,000 jobs over the next 20 years under the new rules and between 50,000Mw and 70,000Mw of coal-fired power generation throughout US could be retired. The three Kentucky plants being shut down supplied less than 800Mw of power. One megawatt powers about 1,000 homes.

Reuters reports power rates in Kentucky, due primarily to the ample use of low-cost, coal-fired generation, are among the lowest in the United States.

MINING.com reported on the impact of the coal ash study and quoted the US Department of Energy saying that new regulations mean a lot of coal-fired power plants will shut down soon — some of them, simply because it would not be feasible to find the materials and skilled labor to complete upgrades in time to meet tight EPA deadlines.

Australia has taken a lead in clamping down on carbon emissions and MINING.com reported last week amid dire predictions about job losses and the drying up of investment in the sector due to a proposed carbon tax come more bad news for Australia’s coal miners: New South Wales plans to increase the royalties it receives from coal companies to offset some $400 million in extra costs to the state’s coal-fired electricity generators due to the very same federal government carbon levy.

MINING.com also reported last week that Europe and China want to ape Australia’s proposed emissions trading scheme – which will evolve from the carbon tax being implemented next year. Beijing will use it as a model for one of six Chinese pilot programmes to be introduced in 2013. Earlier that week the EU also endorsed the controversial Australian plans and announced the start of talks for the eventual linkage of carbon trading by 2015.

Coal for power generation is far from a dying industry though, and BP’s annual study showed that worldwide coal consumption hit its highest level relative to other sources in 40 years in 2010 after growing 7.6% year on year. In contrast just 1.8% of global energy consumption comes from renewable sources such as hydroelectricity, biofuels, wind and nuclear power stations. The comparative figure a decade ago was 0.6%.

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