ICF: Reports of the death of US coal are premature

Source: ICF International

ICF International (NASDAQ:ICFI), a leading provider of consulting services and technology solutions to government and commercial clients, has released its Integrated Energy Outlook for the second quarter of 2011. The study highlights the near-term impacts of global economic recovery on US energy markets and examines the implications of lower CO2 prices on the long-term energy outlook. 

The Energy Outlook notes that the Environmental Protection Agency (EPA) has released proposals for the Clean Air Transport Rule (CATR), the Air Toxics Rule, coal combustion residuals, and cooling water intake structure standards. Although the combined impact of the rules remains uncertain, the regulations could lead to up to 40 GW of coal plant retirements in the next decade.

Contrary to some projections that indicate environmental regulations will severely impact US coal production, ICF projects that US coal production will be maintained at more than 1 billion tons per year in the long-term despite the projected retirement of nearly 40 GWs of coal-fired electric generation in response to new environmental regulations and relatively low natural gas prices.

The study also finds that increasing demand for renewable energy credits (REC) along with the loss of key federal incentives will cause REC prices in eastern states to rise sharply over the next 15 years. Similarly, California will fall short of the state’s bundled interim requirements through 2016, maintaining upward pressure on delivered REC prices.



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