James Bushnell, Research Director at the University of California Energy Institute at UC Berkeley, spoke yesterday about his research on the Clean Air Act and its effects on power plant efficiency.
This was the third meeting of the Energy and Climate Forum, sponsored by the Department of Economics, the Tufts Institute of the Environment, and the Fletcher School's Center for International Environment and Resource Policy.
Bushnell discussed the environmental emissions regulations established in the Clean Air Act of 1970. Simply stated, this act required all new power plants to be built according to the new environmental regulations, while allowing all old power plants to continue to exist without renovating themselves to fit these new regulations.
Not requiring already established power plants to retrofit - or update themselves according to the new regulations - is called "grandfathering." Officials felt it was necessary to grandfather in this instance because "retrofitting existing power plants would've been extremely costly," Bushnell said.
But, grandfathering could delay the retirement of older plants and the replacement of these with newer plants, due to the added costs of the new pollution control technologies.
"By grandfathering, you've just made new plants relatively more expensive than old plants," Bushnell said.
No industry would prefer older, possibly outdated technologies over newer technologies, so this deterrent to replacement was predicted to cause a negative effect on power plant efficiency.
Bushnell's talk focused on the New Source Review (NSR), a 1977 amendment to the Clean Air Act that required specific pollution control technologies, called scrubbers, to be installed in coal power plants.
Scrubbers are vacuum-type technologies that pull sulfur out of smoke stacks before the sulfur is emitted into the air. Existing coal plants fell under the NSR if they underwent "major modifications" of their facilities.
If existing plants only made "routine modifications," they would not have to adopt scrubbers. The fear of NSR enforcement caused some power plants to "deter the maintenance and improvement in efficiency," Bushnell said.
Also, the pollution control technologies required in a given plant depended on its location. Plants in "non-attainment," or dirty, polluted areas, had to install more intense pollution control technologies than those plants in "attainment," or clean, areas.
According to Bushnell, "the grandfathering effect predicts plants in non-attainment counties to retire later. But in fact, we find they retire much earlier!"
Gas plants in non-attainment counties are three times more likely to retire than those in attainment counties, and coal plants in non-attainment areas are seven and a half times more likely to retire.
Bushnell's research did find that if power plants in non-attainment counties were surrounded by other non-attainment areas, they were less likely to retire than those surrounded by attainment areas.
This is probably due to the fact that replacing a retired power plant in a non-attainment area is more expensive than replacing it in an attainment area. Therefore, these non-attainment power plants surrounded by non-attainment areas would artificially extend their lifetimes to save money.
During the Clinton administration, the Environmental Protection Agency started suing power plants for noncompliance with the NSR - 49 plants have been sued to date, and these cases are still open. These lawsuits have been identified as "the cases that will define Roberts' Supreme Court," Bushnell said.
After the Bush administration made "major modifications" to the NSR, many of its provisions were diluted. Routine maintenance is now defined as anything costing on-fifth or less of the cost of the entire plant. Bushnell said that it is "pretty widely viewed that this is the equivalent of eliminating the NSR."
At the end of the lecture, it was concluded that, although there were other noticeable detrimental effects on the power plant industry from the Clean Air Act and the NSR, the efficiency of power plants did not decrease. But, there was a decrease in the investments made in power plants.
"It is possible that the policy was just reversed before the consequences of those reduced investments could show up in the actual performance," Bushnell said.
The last meeting for this semester of the Climate and Energy Forum will be held on Thursday, Nov. 16 from 4-5:30pm in Burden Lounge. Arnold Grubler from the International Institute for Applied Systems Analysis will be discussing technological innovation.
