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In Quiet End to a Coal Battle, Utility Puts Canceled Plant Parts Up for Sale

Some experts suggest coal owners may be hesitant to buy old plant designs like the shelved South Carolina facility because their emissions are too costly

By Maria Gallucci, SolveClimate News

Apr 5, 2011
A power plant operated by Santee Cooper

A South Carolina utility is hoping to salvage some of the money it lost from a shelved coal-fired power plant by selling off its turbines, pumps, pipes and designs.

The move marks the quiet end of a very public, five-year saga over a controversial coal plant that was designed with earlier — and weaker — environmental standards in mind.

State-owned Santee Cooper placed an advertisement in March for parts to a 660-megawatt unit of the 1,320-megawatt Pee Dee Energy Center it planned to build by 2012.

The project was canceled last year due to falling energy demand and rising operational costs related to reducing its massive greenhouse gas and toxic emissions.

Mollie Grove, a spokesperson for the utility, said the sale had already peaked the interest of various undisclosed companies. "I think we'll be successful in selling [the parts]," she told SolveClimate News.

But with new U.S. EPA rules on carbon emissions and other hazardous pollutants underway, experts suggest that a deal for the old parts may be difficult as the industry is now building more efficient, less polluting power plants.

Developers 'Holding Their Breath'

Dave Gerhardt, an energy analyst at ICF International in Fairfax, Va., said it is typical for coal owners to purchase plant components ahead of construction and sell the parts if need be.

"It is not uncommon that if a project gets canceled halfway through ... [developers] do a quick auction and try to recover some of their investments on the components," he said. "These are big ticket items," even the architectural designs.

But today, many developers are hesitant to build older-model coal plant designs like the Pee Dee facility because their high carbon emissions are too costly to control, he told SolveClimate News.

For many in the industry, the watchword is wait and see.

"A lot of [developers] have been holding their breath for a couple of years to see what is going on with carbon dioxide and other potential regulations" before investing in new coal plants, Gerhardt said.

(Listen to the SolveClimate News podcast episode: Coal Owners Retiring 'Significant Components of Their Fleets')

The 'Ford Pinto of Power Plants'

When Santee Cooper first announced plans in April 2006 for a pulverized coal facility, federal regulations did not yet limit carbon emissions or cap mercury levels.

But on Jan. 2, EPA's greenhouse gas rules kicked in, requiring developers of new power plants with large carbon footprints to curb emissions using cost-effective Best Available Control Technology, or BACT, in order to get air quality permits.

Coal owners are weighing the best options for their plants. These include: co-firing with biomass; testing out nascent carbon capture and storage (CCS) techniques; installing expensive smokestack scrubbers; or switching to relatively cheaper and cleaner natural gas altogether.

Last month, EPA proposed the first national standard for emissions of mercury, arsenic and other toxins from coal plants, which would go into effect in 2015.

Under Santee Cooper's plan, the 1,320-megawatt Pee Dee plant would have emitted around 10 million tons of carbon and 400 pounds of mercury per year — over 30 times the legal limit — according to the Southern Environmental Law Center (SELC), which defends environmental groups in South Carolina and five nearby states.

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