The EPA’s proposed carbon pollution rules for existing power plants can help spur innovation that will make it easier for the world to reduce its emissions, according to analysts at emerging technology advisory firm Lux Research.
Lux says the new EPA rules are unlikely to have a dramatic impact on global emissions on their own, given that almost all future growth in carbon emissions will come from developing and underdeveloped countries — most notably China, which became the largest carbon emitter in 2007.
Lux Research analysts predict that four major technology sectors will get a boost:
- Combined cycle gas turbines (CCGTs) will gain. Most states will first target improvements to fossil fuel power plants. CCGTs, which use energy from burning natural gas, as well as steam generated from hot exhaust gas, will be in demand, given their higher efficiency, benefitting CCGT giants such as General Electric.
- Commercial and utility scale solar demand will rise in unexpected places. Subsidized internal rates of returns (IRRs) are already high for commercial and utility solar installations in states like California and Massachusetts, ranging from 10 percent to 15 percent (see Lux Solar Demand Tracker). The new carbon emissions rules will likely open up hitherto unattractive markets such as Georgia and South Carolina; expect a greater flow of debt capital and competing business models such as leasing from SolarCity and solar loans from Sungage to make their presence felt.
- Negawatts will prove to be the cheapest compliance. Saving electricity is considerably cheaper for a utility than producing it – as little as $0.028/kWh, according to the American Council for an Energy Efficient Economy, twice as cheap as coal. Expect the utilities in coal-dominant regions, like American Electric Power (AEP), to expand their residential energy efficiency programs, leading the adoption of air barrier materials, LED lights, and double pane low-e coated windows.
- “Clean coal” will get a new lease on life. Current costs of carbon capture and sequestration (CCS) for coal plants using integrated gasification combined cycle (IGCC) are $60/ton, according to the US Department of Energy, making the approach impractical. The new rules will accelerate the development of second- and third-generation technologies for CCS, such as metal organic frameworks (MOF), which have the potential to get costs down to $20/ton.
Photo Credit: coal power plant via Shutterstock