The Future of Low Carbon Electric Power Generation: An Assessment of Economic Viability and Water Impacts under Climate Change and Mitigation Policies

As the electric power generation sector transitions towards low-carbon technologies under climate change and mitigation policies, technology choices and water use will shift alongside it. With the implementation of climate regulations, the viability of different technologies will begin to change as decreased emissions begin to be incentivized. This thesis addresses how proposed climate regulations necessitating use of carbon capture and storage (CCS) will affect water use from new fossil-fuel fired power generation as well as how climate changes and policies could affect water use from the electricity generation sector on the whole in the long term. This thesis also addresses the economic viability of existing coal-fired power plants using carbon capture and storage (CCS) retrofits under the impending market structure of the finalized Clean Power Plan. Chapter 1 examines the water use impacts of the proposed New Source Performance Standards for CO2 emissions new fossil fuel-fired electricity generation units proposed by the U.S. Environmental Protection Agency in September 2013. To meet the emissions requirements of this regulation, coal-fired units will require use of CCS at 40% capture, increasing water use by approximately 30%, though added water use varies with plant and CCS designs. More stringent standards could require CCS at natural gas combined cycle (NGCC) plants as well. When examined over a range of emission standards, new NGCC plants consume roughly 60 to 70% less water than coal-fired plants. Chapter 2 quantifies plant and regional shifts in water consumption from the energy generation sector in light of ambient climate changes and potential regulation shifts from climate mitigation policies on a 100-year planning horizon in the Southwest. Employing an integrated modeling framework, feedbacks between climate change, air temperature and humidity, and v consequent power plant water requirements are assessed. These direct impacts of climate change on water consumption by 2095 range from a 3%-7% increase over scenarios that do not incorporate ambient air impacts. Adaptation strategies to lower water use include the use of advanced cooling technologies and greater dependence on solar and wind. Water consumption may be reduced by 50% in 2095 from the reference from an increase in dry cooling shares to 35- 40%. This reduction could also be achieved through solar and wind power generation constituting 60% of the grid, necessitating a 250% in technology learning rates. Chapter 3 analyzes the economic feasibility of retrofitting carbon capture and storage (CCS) to existing coal-fired electricity generating units (EGUs) in Texas for compliance with the Clean Power Plan's rate-based emission standards under an emission trading scheme. Using a database of 18 technologically capable EGUs in Texas, CCS retrofits are modeled under a range of scenarios. Through an emission rate credit (ERC) marketplace, units enlisting the use of 90% capture of CO2 would prove to be more profitable than existing units at average prices of $27.8 per MWh under the final state standard. The combination of ERC trading and CO2 utilization can greatly reinforce economic incentives and market demands for CCS to accelerate large-scale deployment, even under scenarios with high retrofit costs. This chapter additionally compares the costs of electricity generation between CCS retrofits and renewable technology under the trading scheme, finding that EGUs retrofitted with CCS may not only be competitive with wind and solar, but more profitable under certain market conditions.