We're pleased to launch the first of our series of Monthly Roundups for different industries including power, water and coal ash. We hope you'll enjoy out first power generation and supply monthly roundup featuring top news and drivers in the industry on a monthly basis.
Data Story - Coal Production, Consumption, and Ash Products
Data in its own right is...well...a little boring. But data journalism is a different story. Better than a good fiction story is seeing meaningful insights and stories being drawn from that otherwise drab data. This month our story relates to U.S. economy wide power generation, with a focus on coal fuel and combustion by-products (by-products generated from burning coal in coal-fired power plants).
Coal is in the news. Coal has, for decades, been a cornerstone for U.S. base power production. At a macro level, based on data from the annual U.S. Energy Information Administration (EIA) surveys, nearly 650 million tons of coal are consumed by U.S. power plants annually.
The following chart shows where coal is produced.
Source: EIA Annual Energy Outlook 2019
Coal power generation is under pressure from many directions, including the delayed Clean Power Plan, increasing capital and operating costs associated with sulfur and particulate emissions abatement (reducing emissions of sulfur oxides from power plants), and Coal Combustion Residual (CCR) regulations. Municipal and state support for making non-fossil power commitments is growing, with notable time-based commitments made by two states (Hawaii, California) and some populous cities (examples Chicago, Cincinnati, Los Angeles, Salt Lake City, San Francisco, New York).
This combination of factors has resulted in a reduction in the changing quantity of coal consumed. The following bar chart shows the 5-year trend for both coal consumed (blue bars) and coal ash produced (red diamonds).
Note the 5-year reduction of more than 25% from 871M short tons in 2014 to 645 short tons in 2018. There is a corresponding decrease in calculated coal ash production, from 78M short tons in 2014 to 55M short tons in 2018, a 30% decrease. It is interesting that the decrease in coal ash production is faster than the decrease in coal consumption.
You may ask, so what? If you are in industries involved with coal power production and beneficial use of the by-products, this information matters. We know that coal consumption is declining. This also leads to a reduction in the availability of coal ash. Coal ash is a valuable input material in Portland cement concrete manufacturing. As the rate of newly-generated coal ash production decreases, needed coal ash for cement production will need to come from somewhere, whether it is a domestic or imported source.
Fortunately for the cement industry, there is expected to be an increase in the amount of coal ash available over the next several years, as ash materials become available as they are excavated from certain ash ponds under the CCR regulations. All told, reported coal ash materials total more than 2 billion cubic yards. Much of this material will be “closed in place”. However more than 900M cubic yards associated with surface impoundments is at risk of requiring removal at more than 200 sites, involving nearly 400 CCR-regulated surface impoundments.
Whether or not a CCR-regulated impoundment will require closure, and whether that closure is in-place or by-removal, depends on numerous factors. These factors include whether the CCR units satisfied location restrictions, and whether groundwater protection standards (GWPS) were found to be exceeded. The following treemap shows the number of surface impoundments (SI) and landfills (LF) exceeding GWPS for the top-5 states where this occurred. Those are likely to be sources of substantial coal ash materials, depending on negotiated handling of the CCR units between the regulatory authorities and the owner-operators.
FirmoGraphs curates data on the coal generation supply chain, from sourcing to consumption and management of produced coal ash minerals. The ecosystem of businesses and organizations participating in this supply chain is dynamic and sophisticated. Engineering and construction firms such as AECOM (https://www.aecom.com/) have robust and experienced consulting practices helping power generation customers make the best risk-based decisions when it comes to managing coal ash materials. To manage these materials, one company, SEFA (https://www.sefagroup.com/), has developed proprietary technology to enable the beneficial reuse of coal ash from surface impoundments or ponds into a useful input for the concrete industry. The American Coal Ash Association (https://www.acaa-usa.org/), which recently celebrated its 50-year anniversary, brings together market participants with expertise on coal ash and other materials resulting from coal combustion. The next 5 - 10 years will continue to be very interesting as the U.S. power generation fleet continues to evolve along with this ecosystem.
Each month we share a subset of key industry drivers that we feel are of particular importance, with an emphasis on those related to our curated data.
Driver: EPA Proposed Approval of Georgia Coal Combustion Residuals Permit Program
In June the U.S. Federal EPA proposed to approve Georgia’s CCR permit program. This would make Georgia the second state under the WIIN Act to have a state-administered program. As the primary operator of coal-fired power plants in the state, this driver primarily impacts the Southern Company.
From the Ash Mart, we estimate this to impact approximately:
- 23 surface impoundments and landfills
- 59 million cubic yards of CCR Material
- 1,800 Acres of Final Cover
A public hearing will be held on August 6, 2019, 8 a.m. to 5:30 p.m. The public comment period ends on August 27, 2019, and we expect there to be substantial third-party commentary.
For additional information, see:
- Federal Register, https://tinyurl.com/y3d3jntv
Driver: Illinois Pollution Control Board Decision
The Illinois Pollution Control Board (IPCB) issued the following two decisions on June 20:
- Changing air pollution controls,
- Mandating retirements within Vistra Energy's coal generation fleet
IPBC also agreed with climate advocates in a lawsuit regarding the groundwater contamination by four coal plants owned by a subsidiary of NRG Energy.
Vistra is directed by the order to retire 2 GW of coal generation by the end of the year 2019. The IPCB order portrays the current trend in the US where states are strengthening air pollution regulations.
For additional information, see:
- Illinois Pollution Control Board,
Driver: EPA’s Proposed Modifications Relating to Utility Coal Ash Sites
The Environmental Protection Agency (EPA) announced proposed changes to the federal coal ash rule signed July 29th that would eliminate onsite dry storage requirements as well as environmental protections on fill projects larger than 12,400 tons. It is proposed to establish an alternate risk-based groundwater protection standard for boron. Also of note, there would be changes to CCR website requirements and some reporting requirements with the intent of making information more publicly accessible.
Onsite Storage: The reason this matters is that it will give owner/operators additional flexibility and options in terms of how they manage coal ash materials. This would provide welcome relief to organizations seeking to maximum the beneficial use of coal ash.
CCR Websites: The EPA is addressing comments about certain owner/operator websites that could be more-easily accessed by the public.
Boron GWPS: The alternate risk-based groundwater protection standard (GWPS) for boron would be finalized only if boron is ultimately added to the list of Appendix IV. This is the list of constituents where corrective action is required if there is a statistically significant level (SSL) detected in groundwater.
For additional information, see:
- Proposed Changes - Enhancing Public Access to Information and Reconsideration of Beneficial Use Criteria and Piles,
As per FirmoGraphs’ records, the following M&A transactions in the Power Generation and Supply Industry, stand out in the month of June:
- Capital Power Corporation bought Goreway Power Station Holdings Inc. (an 875 megawatt (MW) natural gas combined cycle generation facility) from JERA and Toyota Tsusho Corporation for $387 million.
- Duquesne Light Holdings ("DLH") acquired Efficiency Network, Inc. ("TEN"), provider of customized energy solutions for large businesses, governments, universities and hospital systems.
- HOP Energy, LLC (“HOP”), the largest privately-owned specialty distributor of heating oil, propane, and other petroleum products, acquired Kosco Heritage Energy, LLC (“KHE”).
- Castleton Commodities International (CCI) acquired Sherbino I Wind Farm, which owns and operates Sherbino I wind energy facility Pecos County, Texas, through one of its subsidiaries.
In this over-digitized age, there is no replacement for face-to-face meetings with your prospects and customers! We track meetings of interest to our customers serving the US power generation and supply industry so you won’t miss upcoming meetings and deadlines.
- AESP Summer Conference & Expo - Aug. 27 to Aug. 29, Toronto, Ontario, Canada, https://www.aesp.org/events/EventDetails.aspx?id=1158952&group=.
Early Registration Deadlines
- Association of Energy Services Professionals, International, AESP Summer Conference & Expo Aug. 27 to Aug. 29, 2019, Toronto, Ontario, Canada, https://www.aesp.org/events/EventDetails.aspx?id=1158952&group=. Deadline: August 5, 2019.
- Electrical Generating Systems Association, EGSA Fall Conference September 15 to September 17, 2019, Scottsdale, Arizona, http://www.egsa.org/fall/HOME.aspx. Deadline: August 23, 2019.
Call for Papers Deadlines
Event: IEEE PES Transmission and Distribution Conference and Exposition
Association: IEEE Power & Energy Society
Dates: From April 20 to April 23, 2020
Location: McCormick Place, Chicago
Call for Papers Deadline: August 5, 2019
None of the information we provide may be taken as legal advice. Please consult an attorney if you require a legal interpretation of this information.
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