Tougher US air-quality regulations will increase the wholesale cost of electricity according to a study by the Edison Electric Institute. The study claims that prices will climb 11 per cent by 2010, or $15.7 billion each year, Reuters reports.
New regulations to control pollution will require utilities to retrofit coal-fired power plants at a cost of $21.8 billion over the next 15 years. The report claims that this will lead to a significant shift to natural gas-fired generation.
The higher costs may make up to 21 000 MW of generating capacity uneconomical. Up to 61 power plants could close during the transition to a deregulated electricity market. If those plants were closed before retrofitting, the industry could save $1.1 billion.
Measures to reduce global warming could have an even more dramatic effect, the report says. The electricity sector accounts for around 37 per cent of total US carbon dioxide emissions. Around 36 per cent of existing US coal-fired capacity may need to be replaced to meeting US targets for carbon dioxide emission reduction.
