PART TWO IN BRIEF: STRATEGIES FOR CONTROLLING POWER PLANT EMISSIONS

RELATION OF EMISSIONS TO AMBIENT AIR QUALITY AND CHEMISTRY OF PRECIPITATION

Man-made emissions of sulfur oxides in the United States have been increasing at about 4 percent per year and amounted to about 34 million tons in 1970 (see Table 6–2). The most important sources are electric power plants (57 percent), industrial processes (16 percent), and other stationary sources (22 percent) (see Table 6–2). The greatest density of emissions is in the northeastern states (east of the Mississippi and north of Alabama-South Carolina (see Figures 6–2; 13–10). There are also substantial emissions (3–4 million tons per year) in parts of southeast Canada adjacent to the U.S. (see Table 7–2). At least in this region, man-made emissions greatly exceed natural emissions (see Table 7–2).

Most emissions are in the form of sulfur dioxide. After emission, sulfur dioxide mixes with the ambient air by diffusing both vertically and horizontally, and is transported (generally eastwards or northeastwards) by the wind. Some of the sulfur dioxide is oxidized to form sulfates, which may in turn form aerosols and travel long distances with the wind (see Chapter 6). The estimated rate of oxidation of sulfur dioxide to sulfates in the atmosphere varies considerably, from as low as 0.1 percent per hour to as high as 30 percent or more per hour, depending on local conditions such as the humidity and the relative concentrations of other air pollutants. This rate of conversion is typically more rapid in urban air than in rural air (see Chapters 6 and 7).



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Air Quality and Stationary Source Emission Control PART TWO IN BRIEF: STRATEGIES FOR CONTROLLING POWER PLANT EMISSIONS RELATION OF EMISSIONS TO AMBIENT AIR QUALITY AND CHEMISTRY OF PRECIPITATION Man-made emissions of sulfur oxides in the United States have been increasing at about 4 percent per year and amounted to about 34 million tons in 1970 (see Table 6–2). The most important sources are electric power plants (57 percent), industrial processes (16 percent), and other stationary sources (22 percent) (see Table 6–2). The greatest density of emissions is in the northeastern states (east of the Mississippi and north of Alabama-South Carolina (see Figures 6–2; 13–10). There are also substantial emissions (3–4 million tons per year) in parts of southeast Canada adjacent to the U.S. (see Table 7–2). At least in this region, man-made emissions greatly exceed natural emissions (see Table 7–2). Most emissions are in the form of sulfur dioxide. After emission, sulfur dioxide mixes with the ambient air by diffusing both vertically and horizontally, and is transported (generally eastwards or northeastwards) by the wind. Some of the sulfur dioxide is oxidized to form sulfates, which may in turn form aerosols and travel long distances with the wind (see Chapter 6). The estimated rate of oxidation of sulfur dioxide to sulfates in the atmosphere varies considerably, from as low as 0.1 percent per hour to as high as 30 percent or more per hour, depending on local conditions such as the humidity and the relative concentrations of other air pollutants. This rate of conversion is typically more rapid in urban air than in rural air (see Chapters 6 and 7).

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Air Quality and Stationary Source Emission Control The principal means of removal of sulfur oxides from the atmosphere include absorption of gaseous sulfur dioxide by the ground or by vegetation, and deposition of sulfates in rain and snow (see Chapter 7). Surveys conducted in the northeastern United States suggest that roughly 33 percent of the sulfur oxides are eventually returned to earth as sulfates in precipitation (see Table 7–2). Figure 6–1 pictures the way sulfur oxides are transported after emission, transformed into sulfates, and ultimately returned to ground. Because sulfur dioxide is absorbed fairly rapidly by the ground, emissions from stacks are probably more important than low level emissions as a source of sulfate aerosols downwind (see Chapters 6, 7). For the same reason, ambient concentrations of sulfur dioxide measured at ground level are determined primarily by sources nearby and a short distance upwind; in contrast, ambient concentrations of sulfates are determined by sources further upwind (see Chapter 6). Accordingly, ambient concentrations of sulfur dioxide are generally greater than those of sulfates at urban stations, but are lower at some rural stations (see Chapter 6). Measurements of suspended sulfate aerosols (see Figure 6–4) and of sulfates in precipitation indicate that high levels of sulfate are dispersed very widely throughout the northeastern United States and eastern Canada (see Figure 7–1). The pattern of deposition suggests transport over distances of several hundred km downwind from the principal source areas (see Chapter 7, and Figure 7–1). The acidity of the suspended sulfate aerosols has not been measured directly, but can be determined indirectly by measuring the acidity of precipitation (see Chapter 7). Acid precipitation is a regional phenomenon in the northeastern United States and eastern Canada, and its distribution covers roughly the same area as experiences the highest sulfate levels (see Figures 7–2, 7–4). The fraction of sulfates falling out as acid sulfates in precipitation is in some areas as much as 80 percent; its regional average is about 24 percent (see Table 7–3). About three-quarters

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Air Quality and Stationary Source Emission Control FIGURE 6–1: Processes Involved in the Relationship of Sulfur Oxide Emissions To Air Quality

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Air Quality and Stationary Source Emission Control of the acidity of precipitation is in the form of sulfuric acid and is attributable to sulfur oxide emissions; most of the remainder consists of nitric acid and is attributable to nitrogen oxide emissions (see Chapter 7, and Table 7–3). Between 1960 and 1970 total emissions of sulfur oxides in the United States increased by about 45 percent, primarily due to a near-doubling in emissions from electric power plants (see Table 6–2). However, as a result of limitations imposed on the amount of sulfur permitted in fuels, sulfur oxide emissions in urban areas were reduced substantially during that decade (while those in non-urban areas increased disproportionately: see Table 6–2). In consequence ambient concentrations of sulfur dioxide in urban areas decreased significantly. However, ambient concentrations of suspended sulfates in urban areas remained approximately constant throughout the decade and there is some evidence that ambient sulfate levels in non-urban areas have increased (see Chapter 6). This probably reflects the long-range dispersal of air-borne sulfates, and indicates that ambient sulfate concentrations are determined primarily by total regional emissions. The acidity of precipitation has increased more rapidly than total emissions, perhaps reflecting a depletion of neutralizing materials in the air (see Table 7–3). The area affected by acid precipitation has also expanded to include most of eastern North America (see Figure 7–1). In the absence of emission controls, emissions of sulfur oxides from power plants are projected to double again in the decade 1970–80, and a small increase in SOx emissions from other sources is considered likely (see Chapter 6). Extrapolating from past trends and considering the relative importance of urban and non-urban sources, this growth in SOx emissions is projected to cause only a small increase (0 to 20 percent) in average urban sulfur dioxide concentrations, but a larger increase (18 to 42 percent) in average urban sulfate concentrations (see Chapter 6). The total acidity of precipitation is expected to increase by much larger factors (perhaps as much as threefold) and its distribution may extend over a wider

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Air Quality and Stationary Source Emission Control area than previously was the case (see Table 7–4). Part of the increase in acidity of precipitation would be attributable to nitric acid and would not be averted by sulfur oxide emission controls (see Table 7–4, Chapter 7). A highly simplified model is presented in Chapter 13 to predict the likely impact of a single source of sulfur dioxide on rural and urban air quality downwind of it. Applying reasonable average values for rates of diffusion, absorption and oxidation of sulfur dioxide, it is demonstrated that a single power plant of 600 MW burning 3 percent sulfur coal could cause an increase of the order of 0.15 ug/m3 in the annual average level of suspended sulfates in an urban area approximately five hundred km (300 miles) downwind. (The range of uncertainty in this calcuation is wide: 0.03 to 0.3 ugm/m3.) The figure of 0.15 ugm/m3 is consistent with the analysis of the regional distribution of emissions and ambient air quality summarized in Chapter 6. The impact of a power plant on sulfate air quality far downwind is quite strongly dependent on the rate of oxidation of sulfur dioxide to sulfate, and hence, among other factors, on the amounts and distributions of other pollutants in the atmosphere. EFFICIENT PRICING AND CONSERVATION One important means of achieving the broad goals of our national energy policy is to promote conservation. Limiting the consumption of electricity or reducing its rate of growth would reduce emissions of sulfur oxides and other pollutants and thus the damages to health and the environment from the utilization of coal to produce electric power. One essential device in limiting wasteful consumption of energy is to see to it that its price is equated to its marginal social cost of production. In fact, our pricing of electricity falls far short of this requirement in many ways. Electric utilities are in most jurisdictions regulated on an original, or historic, cost

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Air Quality and Stationary Source Emission Control basis. This means that their capital costs are measured by, and as a return on, the cost historically incurred. But the only measure of marginal cost that has any economic significance is current costs, or, as one sets rates for the future, the cost that will be incurred or saved during the period when those rates are in effect. In times of rapid inflation, those marginal costs tend, naturally, to rise relative to average company revenue requirements, when the latter are based heavily on historic costs. Basing all electricity rates on incremental costs in these circumstances would produce excessive revenues, by traditional regulatory standards. The requirements of economic efficiency could, however, be approximated by setting rates at incremental cost for those categories of demand that are particularly responsive to price. Alternatively, excess revenues could be rebated equally (or in some other manner not related to individual consumption) to all customers. Second, and operating in the same direction as the use of average rather than marginal cost pricing, is the failure of electricity rates typically to reflect peak responsibility. The required level of investment in generating and transmitting capacity depends specifically on the level of demand at the times of system peak consumption. If the economically proper amount of capacity is to be constructed, therefore, it is that particular consumption, i.e., consumption at the time of peak utilization, that must be charged the full marginal costs at that time of making that capacity available. This could be done, for example, by installation of time-of-day meters. In contrast, consumption truly and inalterably off peak should not pay any capacity costs. It is clear, generally, that the failure of most electric utility pricing to reflect these peak responsibility principles, as well as to measure capacity costs in current rather than historical terms, gives rise to a greater demand for electricity and a consequent greater construction of plant than would otherwise occur. While efficient pricing of energy is one very important means for reducing wasteful use

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Air Quality and Stationary Source Emission Control of electricity and, therefore, for reducing sulfur dioxide emissions, it is by no means the only device, nor is it necessarily sufficient. Improved effectiveness of fuel utilization typically requires capital outlays either by individuals or businesses. Capital shortages and high interest rates both inhibit investment in energy-conserving fixed assets. These considerations argue for government assistance to individuals and businesses in such forms as tax rebates or low-interest loans for energy-conserving investments. At the minimum, non-economic institutional barriers which make it difficult for many to obtain financing, even at market rates of interest, should be overcome. MODIFICATION OF DEMAND FOR ELECTRIC POWER Modifications of demand for electricity, and therefore of emissions of sulfur oxides, can be brought about by improvements in effectiveness of fuel utilization in end-uses and by shifting from oil and gas to coal as primary fuel for space heating. Demand for fuels for electricity generation can be reduced by increasing end-use effectiveness in two general ways: (1) generation of electricity as byproduct of certain industrial processes; and (2) improvement of efficiency of electrical apparatus used in the residential, commercial, and industrial sectors. Generation of Byproduct Electricity in Industry Process steam raising and direct combustion heating account for 74 percent of total industrial fuel consumption. If all process steam were to be raised in combination with electricity generation as much as 1270 billion kw-hrs of electricity could be generated at a net fuel saving of about 6.2 quads or 258 million tons of coal per year in 1985. Similarly, if waste heat from industrial heating processes were to be recovered by bottoming cycle electric generators, as much as 182 billion kw-hrs of electricity could be

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Air Quality and Stationary Source Emission Control generated at a net fuel saving of 1.82 quad or 76 million tons of coal per year in 1985. Not all of the potential by-product electricity can be generated because some industrial plants are too small in scale or operate too few hours per year to justify the expense for the installation of the fuel saving equipment. The rate at which fuel-saving equipment will be installed will depend on fuel and electricity prices. If the price of electricity sold by a utility is determined by average capital costs of supplies rather than capital costs of new supplies, then an individual firm would likely prefer to purchase electricity rather than generate by-product electricity. To illustrate the effect of pricing electricity based upon average rather than incremental costs, a comparison was made between on-site power generators and purchased electricity. This analysis showed that with present prices for electricity, the overall costs to an industrial user were about equal for purchased electricity vs. a bottoming cycle to generate by-product power from waste heat. However, the incremental power demand placed on electric utilities for purchased power results in the expenditure of almost 50 percent more of the nation’s capital than would be required if the bottoming cycle were installed. These comparisons are made on the assumption that the industrial demands in question fall no less than the average of all other demands on the system peak, and so would be incrementally responsible for a propertionate share of the costs of providing the requisite capacity. Improved Efficiency of Equipment and Processes Significant opportunities exist for fuel saving through improvements of effectiveness of electrical equipment used in various applications and through re-optimization of electricity consuming industrial processes. Several examples are included here to illustrate the potential for modifications of demand for electricity.

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Air Quality and Stationary Source Emission Control Air-conditioning and refrigeration equipment accounts for over 20 percent of all U.S. electricity and 5.4 percent of fuel consumed for all purposes. The performance (Btu cooling per watt hour of electricity) of such equipment can readily be improved by 30 percent using known heat-transfer technology. The potential fuel saving would be 1.8 quads, or 75 million tons of coal per year in 1985. A comprehensive study of all electricity consuming processes in industry is needed in order to establish the potential fuel saving. The aluminum electrolysis process serves as an illustration of what might be obtained. By operating the Hall-Process electrolysis cells at lower current density, which is equivalent to increasing capital cost by 22 percent, the electricity required per ton of primary aluminum can be decreased by 16 percent, namely by 2,500 kw-hrs per ton. The potential fuel saving would be 0.25 quads, or 10 million tons of coal per year in 1985. Still further savings in aluminum production may be realized through changes in the process itself such as that being investigated by Alcoa. Applying recently published FEA guidelines on lighting, it it possible to reduce demand by 133 billion kw-hr in 1985. The fuel saving by electric power plants would be 75 million tons of coal per year. Shift of Space Heating Load from Oil and Gas to Coal as Primary Fuel The use of electricity, and the overall consumption of fuel, could increase enormously if a large-scale shift from the direct use of oil and gas to electrical resistance for space and water heating were to take place. Little, if any, increase in overall fuel consumption, and a more moderate increase in electricity demand would occur if the shift were to electrically-powered heat pumps. The heat pump also appears to require a lower overall capital investment for the combined fuel supply and heating equipment than does electrical resistance heating; this would clearly be so if widespread resort to

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Air Quality and Stationary Source Emission Control electric heating results in the emergence of a winter peak, because the heat pump would, in that event, produce major savings in the required amount of generating capacity. The alternative of producing gas from coal to serve the heating market also appears to require substantially less capital and less total fuel consumption than electric resistance heating. Relative fuel requirements and capital investment needs, including equipment for both fuel supply and end-use, were estimated for each option to be as follows: Comparison of Fuel and Capital Requirements for Alternatives to Electric Resistance Space Heating   Fuel Consumption Capital Requirements Electric Resistance 1.0 1.0 Electric Heat Pump 0.55 0.78 Coal Gasification 0.78 0.57 Of course, other options are available for meeting the nation’s space-heating requirements, for example, using solar energy or new oil and gas resources, and each of these should also be assessed. FLUE GAS DESULFURIZATION (FGD) Introduction Are flue gas desulfurization systems reliable and operable for scrubbing stack gas effluents from the combustion of high sulfur coal of the eastern United States? We have considered this question in light of the definition of industrial-scale reliability set forth by the National Academy of Engineering’s panel in 1970—viz., (a) satisfactory operation on a 100-Mw or larger unit for more than 1 year and (b) availability

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Air Quality and Stationary Source Emission Control of adequate technical and economic data for confident projection of commercial designs for specific local and regional conditions. Our point of view has been that an operation at most locations in the eastern United States would not be able to discharge salty water. That is, the operation must work in the closed loop mode. Only lime and limestone scrubbers have yet operated successfully on coal at the commercial scale for extended periods of time, and we have considered the foregoing question in detail only for these systems. Although there is room for improvement, advances in knowledge of the mechanical design of scrubbers and of the selection of materials for their constructions are sufficient to provide reasonable assurance that a failure in a large-scale test will probably not be the result of a design failure that causes the test scrubber to fall far short of the best for the scrubber’s type. Accordingly, our analysis has concentrated upon the availability of chemical knowledge and the adequacy of performance comparisons among bench, pilot, and commercial scrubbers. Although an ideal technical base for scrubber design would include complete and detailed knowledge of the chemistry, we recognize that the base can fall somewhat short of this ideal if the performance comparisions at various sizes of equipment provide a good empirical knowledge to offset some ignorance in respect to scrubber chemistry. However, commercial experience at scrubber conditions that realistically represent those to be expected for a given design is a sine qua non. This is especially true for a design that is recognized to be difficult. We accept the NAE 1970 study’s criterion of substantially 100-Mw capacity as necessary to provide commercial experience. Until just a little more than 1–1/2 years ago, it was believed that a lime or limestone scrubber in the closed loop mode inevitably operated with a liquor that was supersaturated in respect to gypsum, and that an operation free of troubles from plugging and scaling would depend upon keeping the degree of

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Air Quality and Stationary Source Emission Control used to determine priorities for implementation of abatement technologies. The accuracy of model studies depends on inclusion and accurate description of all important cause-and-effect relationships. The limited information presently available makes decisions among strategy alternatives difficult. The use of models is more to enhance understanding of the relative importances of the various factors that affect the decision than to determine with precision what is the optimum strategy. If changing a factor in the analysis within its range of uncertainty leads to a change in the preferred strategy alternative, then that uncertainty would clearly be worth something to resolve before a commitment to a particular strategy is taken. Likewise, it may be that despite uncertainties in many factors, one alternative appears sufficiently better than the others that a commitment now appears preferable to the costs incurred by deferring the decision. The purpose of the analysis is to enhance understanding of a complex problem, including the effects of the uncertainty upon the decision. While specific numbers are used to illustrate the calculations, it should be appreciated that many of the numbers and relationships in the model are uncertain, and subject to considerable change as additional information becomes available. The analysis should be taken as a method for organizing and trying to place in perspective the information presently available to serve as a basis for decision making on sulfur oxide emissions control. The Need to Consider Decisions on a Case by Case Basis For a specific power plant, differences in fuel availability and price, plant loading, plant age, and the economics of abatement strategies may differ considerably from the representative values used in the analysis. Hence the marginal cost of emissions reduction per pound of sulfur removed may differ appreciably from the values used in the

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Air Quality and Stationary Source Emission Control calculations of Chapter 13. The calculation of marginal costs of sulfur oxide abatement strategies should be based on the particular economic and technical factors for each individual power plant. The consequences of emissions may vary considerably from one power plant location to another, and these differences should also be taken into account in the decision among alternative strategies. The relation between emissions of sulfur oxides and ambient levels of sulfur dioxide and sulfates, and the potential for damage to human health, vegetation and other ecological systems, material property, and aesthetic values will in general differ as a result of regional and local factors. As a result, the value of reducing emissions should be assessed separately for different power plants. At some locations the value per pound of emissions reduction may be judged much higher than at other locations. Another reason for examining the emissions control decision on a regional and local basis is that limited resources are available to implement quickly the widespread use of low sulfur coal or stack gas scrubbing. Scrubbing equipment should be installed first in those situations where the benefits of emissions abatement exceed the costs by the greatest amount, and thereafter should be installed on other plants where the benefits are judged to exceed the costs, as the equipment becomes available. Assessing the Value of Sulfur Oxide Emissions Reduction The assessment of the deleterious consequences of sulfur oxide emissions to human health, vegetation and living systems, material property and aesthetic values is difficult. Decisions on emissions control strategy require a trade-off between eliminating emissions and increasing the cost of producing electricity. It is better to have explicit judgments stated for these trade-offs so that emissions control decisions can be made on a consistent basis that

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Air Quality and Stationary Source Emission Control takes into account variations in local and regional situations, and so that the affected parties (utilities, consumers of electricity, those impacted by the consequence of the emissions) are aware of the basis on which emissions control priorities are being set. Hence, it is highly advisable to carry out an assessment of pollution consequences in monetary terms, that is, per pound of sulfur oxides emitted. These assessments should reflect the price that society is willing to pay in increased electricity costs to reduce sulfur emissions. For the analysis described in Chapter 13 three generic cases were used to illustrate how this methodology might be put into effect: a representative existing plant in a remote rural location (e.g., the Eastern Ohio-Western Pennsylvania-West Virginia area), a new plant to be constructed in the remote rural location, and an oil fired plant located in the vicinity of a major metropolitan area such as New York that might be converted back to coal. To the extent permitted by the limited time and resources allowed for the study, available literature and expert judgement were used to estimate human health, ecological, and materials damage, and aesthetic consequences of sulfur oxide ambient levels, and to assign monetary costs to these effects. To relate ambient levels to sulfur oxide emissions, a model for oxidation and dispersion was constructed. Together these steps allowed a pollution cost to be computed per pound of sulfur emitted from the power plant. Assessment of pollution consequences in terms of cost per pound of pollutant emitted permits the comparison of costs and removal efficiencies on an economic basis and helps to identify the most important factors that affect the choice among the alternative strategies. The available information for carrying through the analysis is extremely limited, and the decisions among alternative strategies appear quite close. For the case of a plant in or near an urban area, some alternative for reducing total emissions (e.g., low sulfur eastern coal or flue gas desulfurization)

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Air Quality and Stationary Source Emission Control appears clearly preferable to burning of high sulfur coal. The main result of the analysis is to characterize of the uncertainties. The most important areas of uncertainty appear to be the sulfur oxide emissions to ambient sulfate relationship and the health effects of ambient sulfate. A simple model was used for the relationship between sulfur oxide emissions from a power plant and the incremental increase in ambient sulfate in urban areas several hundred miles downwind. The chemistry of the oxidation process for transforming sulfur dioxide into sulfate was identified as the most crucial area of uncertainty in determining the emission to ambient relationship. Variations in oxidation rate over a reasonable range of values could lead to changes in the increase of ambient sulfate levels from given sulfur emissions over the range of a factor of ten. Health effects were modeled using a very crude dose-response relation drawn mainly from the limited data of the CHESS studies. Chronic respiratory disease and aggravation of heart-lung disease symptoms appear to be the most important health effects. The range of uncertainty for the incidence of each health effect for a given change in ambient sulfate was judged to be a factor of twenty. These uncertainties were roughly characterized in terms of probability distributions, and an overall probability distribution calculated for the pollution cost per pound of sulfur emitted, for the representative plant in a remote rural location and the representative plant in an urban region. These distributions indicate considerable uncertainty; new information on the emissions to ambient relationship or on health effects could easily change the estimated pollution cost by at least a factor of two or more in either direction from the nominal values. The Marginal Cost of Reducing Sulfur Oxide Emissions Analysis of the representative cases yields the following results. With 0.9 percent sulfur eastern coal priced at $32/ton ($1.33 MMBTU), 33

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Air Quality and Stationary Source Emission Control percent above a high (3 percent) sulfur coal available for $24/ton ($1.00 MMBTU), a switch from the high sulfur to low sulfur coal is advisable if sulfur emissions abatement is worth at least 19 cents per pound of sulfur removed from the stack gases. Under the assumption for a new plant of $100/kw capital cost for a lime scrubber, 17 percent amortization, 0.8 mills/kwh operating costs (including 0.3 mills/kwh for sludge disposal), and a 6 percent energy loss and capacity derating, flue gas desulfurization using lime scrubbing adds 4.5 mills/kwh to the cost of producing electricity. Flue gas desulfurization becomes preferred to the premium priced low-sulfur coal if sulfur removal is worth at least 37 cents per pound. If low-sulfur coal is not available, flue gas desulfurization is preferred to burning high sulfur coal if the value of emissions reduction is at least 23 cents per pound. For an existing plant the cross-over value of sulfur removal for switching from high-sulfur coal to low-sulfur coal remains the same, 19 cents per pound of sulfur removed. With the assumptions for a retrofit installation of $125/kw capital cost, 17 percent amortization for the scrubber, 1.1 mills/kwh operating costs (including 0.5 mills/kwh for sludge disposal), and 6 percent energy loss and capacity derating, flue gas desulfurization using lime scrubbing adds 6.1 mills/kwh to the cost of producing electricity. It becomes preferred to premium priced low-sulfur coal only when sulfur removal is worth at least 53 cents per pound. If low-sulfur coal is not available, flue gas desulfurization is preferred to coal preparation if the value of emissions reduction exceeds 26 cents per pound of sulfur removed. In urban or near-urban areas where disposal of sludge is difficult, costs of sludge disposal may be of the order of 0.9 mills/kwh. Lime scrubbing would then not be preferred to low-sulfur coal unless sulfur abatement was worth 59 cents per pound. If low-sulfur coal is not available, lime scrubbing is advisable when sulfur removal is worth at least 28 cents per pound. For the representative cases considered, low-sulfur eastern coal or flue gas

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Air Quality and Stationary Source Emission Control desulfurization appears to be somewhat more cost effective per pound of sulfur removed than use of low-sulfur western coal and coal preparation. However, these latter alternatives may be cost effective in some situations. For new plants in the mideastern region low-sulfur western coal may be an attractive alternative, especially if its cost relative to eastern coal is reduced. Use of low-sulfur western coal in existing plants will generally not be economic because derating or expensive retrofitting will be required. Coal preparation appears barely competitive with flue gas desulfurization if low-sulfur coal is not available: sulfur removal can be accomplished by coal washing at a cost of about 25 cents per pound for an existing plant. Even with sludge disposal assumed to cost 0.5 mills/kwh, a lime scrubber retrofit will be preferred if sulfur removal is worth at least 26 cents per pound of sulfur. Lime scrubbing, moreover, reduces net emissions by about 90 percent compared to about 33 percent for coal washing. The costs and effectiveness of coal washing vary considerably depending on the type of coal. In some situations coal preparation may be an attractive strategy, especially as an interim measure. The value of the cross-over points are sensitive to the emissions levels and costs of electricity given in Table 13–22. If different values are used the cross over points will change. The cross-over between low sulfur coal and flue gas desulfurization is particularly sensitive: A change of 1 mill per kilowatt-hour in the cost of flue gas desulfurization changes the cross over point by 23.2 cents for a new plant, and 19.8 cents for a retrofit installation. If the comparison is between high sulfur coal and flue gas desulfurization, the sensitivity is rather low: A change of 1 mill per kilowatt-hour in the cost of flue gas desulfurization causes a change in the cross-over point by 5.0 cents for a new plant and 4.3 cents for a retrofit installation. The cross-over point between high sulfur and low sulfur coal changes by 6.3 cents for a 1 mill increase in the cost for low sulfur coal for a new plant, and 5.5 cents for an existing plant. These are

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Air Quality and Stationary Source Emission Control both equivalent to 0.57 cents increase in the cross-over point for a 1 cent per million Btu change in the price differential of low sulfur coal over high sulfur coal. Results of the Analysis for Representative Plants For both the new and existing plant in a remote rural location the nominal pollution cost is computed to be about 20 cents per pound of sulfur emitted. The range of uncertainty is at least 8 to 40 cents per pound. The decision for both new and existing plants is very close between the alternatives of burning high-sulfur coal without abatement measures and switching to low-sulfur eastern coal. The nominal value of the emissions reduction is just above the marginal increase in cost of electricity incurred by switching to the low-sulfur coal. This marginal cost was assessed as 19 cents per pound of sulfur removed. For the representative urban case, an existing urban plant to be reconverted to coal, the nominal pollution cost is computed to be about 55 cents per pound of sulfur, with a range of uncertainty of at least 19 to 110 cents per pound. For this case the decision very close for an existing plant between eastern low sulfur coal and flue gas desulfurization; the alternative of buring high-sulfur coal appears poor by comparison. If low-sulfur eastern coal is not available, flue gas desulfurization appears to be the best decision. The marginal cost of lime scrubbing (compared to burning high sulfur coal) is 28 cents per pound of sulfur removed with a sludge disposal cost of 0.9 mills/kwh. An assumption of considerable importance is the value associated with health effects. Willingness by the individuals potentially affected to pay to avoid sickness may not be an adequate standard to judge the value of morbidity caused by air pollution. It is quite possible that health values considerably higher than those used in this analysis ($250 per case of chronic respiratory disease, $20 per day of aggravated heart-lung disease symptoms) will be

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Air Quality and Stationary Source Emission Control judged appropriate as the basis for setting public policy on sulfur emissions control. If, for example, values four times those of our nominal assignments were used for the health effects, sensitivity analysis shows that the pollution cost is shifted up to a range where for both the representative rural and urban plants the best decision would be flue gas desulfurization. The Value of Resolving Uncertainty The decisions on control strategy depend on the adequacy of the information available at the time the decsion must be made. There is great value to improving our information about certain aspects of sulfur oxide pollution. The value of resolving uncertainty derives from the idea that better information might show, for example, that pollution costs are lower than was estimated, and costly abatement methods are not warranted. With some probability then, their extra cost might be saved. In particular, a better understanding of the health effects of sulfates and of the chemistry of the conversion of sulfur dioxide to atmospheric sulfates could have a significant effect on future decisions on control of sulfur oxides. A rough calculation of the value of resolving these uncertainties gives a value of about $2 million per year for the representative 600 MW plant in the remote rural location. If low-sulfur coal is not available, the value of resolving uncertainty drops to a little over $1 million per year. For the urban location, the value of resolving uncertainty on the sulfur oxide emission to ambient sulfate relationship and on the magnitude of the health effects is in the range of $1 million a year. Extrapolating these values to the collection of eastern power plants that now or in the near future might burn high sulfur coal yields an estimate of the order of a quarter of a billion dollars per year. This is roughly 25 times the annual cost estimated by EPA for a research program to resolve these uncertainties.

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Air Quality and Stationary Source Emission Control Other areas of our knowledge on the effects of sulfate emissions should be greatly refined. Health effects not included in our analysis might prove far more serious than those identified so far: for example, sulfate might prove to have a causative role in chronic lung diseases such as emphysema, or in lung cancer. In addition to health effects, acid rain, decreases in visibility, materials damage, adverse effects on ecological systems, and possible climatic effects of sulfur emissions all deserve much more extensive investigation than has heretofore been undertaken. Decisions to be made on sulfur oxide emission from power plants will involve tens of billions of dollars in electrical generation costs in the next decade and massive effects on human health and welfare. Greatly expanded efforts should be made to develop improved models and data for use on a case by case basis to improve decisionmaking on emission control strategy alternatives. Emissions Charges as an Instrument of Policy Considerations of strategy with respect to sulfur compounds emission pertain not only to the application of alternative technologies to the problem but to the selection of policy instruments and administrative practices. In this connection an emissions charge appears to be a well suited policy instrument for inducing efficient sulfur emissions control. The application of an emission charge on SOx, perhaps at the level of the estimated incremental cost of the pollution consequences from the average power plant, would provide a strong, immediate, and across the board incentive to undertake emissions controls activities. At the same time, in view of the still existing disagreements about the applicability of particular technologies, the special circumstances of particular plants, supply constraints, and other complexities of the situation, it would permit flexibility of response. This flexible response would be achieved in a decentralized manner without the

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Air Quality and Stationary Source Emission Control necessity of administrative agencies and the courts trying to decide every individual case in an adversary atmosphere. The latter approach invites delays and frequently arbitrary decisions, and establishes the incentive to hire lawyers rather than to proceed with emissions control. Emissions charges exert a persistent incentive to act whereas variances and delays in imposing requirements allow the emitter free use of environmental resources, with no incentive to act as long as these can be obtained. Moreover, a charges policy would have desirable efficiency characteristics. It would tend toward an application of controls first at those locations where costs per unit of SOx reduction are lowest. In the longer run it would provide a powerful spur for the development of more efficient technologies. When first suggested the idea of emissions charges was greeted with some skepticism by many policy makers and environmentally concerned persons. For various reason industry was also opposed. In recent years this policy option has gained increasing acceptance among conservationists, environmentalists, policy makers here and abroad, and even industry as indicated by a recent Committee on Economic Development report. The sulfur emissions problem is a highly suitable one for the applications of emissions charges as a policy instrument.

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Air Quality and Stationary Source Emission Control PART TWO: Section 1: Relationship of Emissions to Ambient Air Quality and Chemistry of Precipitation