Skip Navigation

This memorandum discusses the environmental effects of coal-switching by electric utilities. The discussion only considers emission reductions achievable in those situations where coal switching remains cheaper than wet scrubbing. The Congressional Budget Office's analysis indicates that economic emission reductions through coal-switching could total at least 8 million tons of sulfur dioxide (S0₂) annually, and probably as much as 10 million tons (as measured against 1980 utility emission levels). An attached set of tables provide the basis for the discussion.

The economic potential for achieving S0₂ emission reductions through coal switching in electric utility boilers is governed primarily by the price of the alternative techniques considered (in this analysis wet scrubbing) and the relative prices of high and low sulfur coal. When estimating these reductions, the relative prices of scrubbing and of high and low sulfur coal will change as the demand for them is affected by acid rain policies. This shift in price complicates the analysis of alternative approaches, since current prices may give misleading estimates of the absolute and relative costs of different polices. To account for these effects, the Congressional Budget Office has employed a model of regional coal markets to simulate the output and price movements experienced under a wide variety of acid rain control options. This model, the National Coal Model, predicts outcomes based on the assumption that individual utilities will react to control policies by finding the lowest cost method of abatement. The methodology is explained in detail in Curbing Acid Rain: Cost, Budget and Coal Market Effects (Congressional Budget Office, June 1986), and the results discussed in this paper are based on analyses contained in that report.

Two assumptions used in that analysis will largely determine the amount of emission reduction that could be expected by fuel switching alone. The first assumption is that only one technological abatement alternative is considered--wet scrubbing. The second assumption regards the cost of that technique, which will be discussed in the final section of this paper.

Although wet scrubbing is currently the most widely utilized retrofit SO₂ removal technology, several emerging technologies may play an important role in the future. These alternatives included dry scrubbing, fluidized bed combustion, limestone injection multistage burners, and possibly integrated gasification combined cycle generation. Physical coal cleaning could also become more prevalent under acid rain control policies. These technologies are in various stages of development, and hold the eventual promise for lower capital and operating costs compared to those encountered with pulverized coal plants equipped with wet scrubbers. However, their potential for retrofit applications, the ultimate removal efficiencies of some techniques, and their rates of future usage remains uncertain.

To the extent that these techniques become available and compete with wet scrubbing in the future, then the results of the CBO simulations that consider only wet scrubbing will tend to understate the role of technological abatement options and overstate the potential for fuel switching as the preferred abatement choice. Combined with the relatively high assumed costs for retrofit scrubber installation, these simulation results should be interpreted as the upper bound of emission reductions achievable solely through fuel switching.

This document is available in its entirety in PDF.