Cost Benefit Analysis Of Cleaning Two Western Coals For Steam Generation ? Introduction

Over the years, electric utilities have been faced with declining steam-coal quality, rising coal prices, and increasingly rigid and costly environmental standards. As a result, many utilities are beginning to show an interest in coal cleaning to upgrade coal by improving its heating value and reducing its sulfur content. Among the primary questions that must be answered for these electric utilities is whether the cost of coal cleaning can be offset by the potential cost savings in coal transportation and utilization in power generation. In search of at least a preliminary answer to this question, the Electric Power Research Institute (EPRI) engaged Bechtel to perform a case-by-case economic study to examine the cost effects of using cleaned versus raw coal to fuel new electric power plants. The results of two of the seven cases studied which involved western coals - one from Montana and another from Utah - are reported in this paper. Coal cleaning appeared to be a cost effective option for the Utah coal, but only marginally economical for the Montana coal. These cost results are expected to change to favor coal cleaning to a greater extent with the application of the final revised New Source Performance Standards regulating SO2 emissions just issued by the EPA. The study was based on the regulation originally proposed by the EPA under the 1977 Clean Air Act Amendments.