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ICF Report: EPA Regulatious Could Reduce Coal Consumption

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ICF International released this week its Integrated Energy Outlook for the second quarter of 2011. The study finds that combined environmental regulations could lead to a significant reduction in coal-generated electricity over the next ten years.

The report, which examines the near-term impacts of global economic recovery on U.S. energy markets and the implications of lower CO2 prices on the long-term energy outlook, notes the Environmental Protection Agency has released proposals for the Clean Air Transport Rule, the Air Toxics Rule, coal combustion residuals, and cooling water intake structure standards.

These regulations could result in more than 40 GW of coal plant retirements over the next decade. While these predictions indicate a dramatic change in U.S. coal production, ICF suggests U.S. coal production will most likely be maintained at more than 1 billion tons per year.

The study also addresses how natural gas prices will respond to increased shale gas production, on-peak energy prices and the ways in which rising renewable requirements will effect renewable energy credits prices throughout the United States.

According to the report, there is also an increasing demand for renewable energy credits. These demands, along with the loss of key federal incentives, may cause prices in eastern states to rise sharply over the next 15 years.

The Integrated Energy Outlook “shows a significant shift, driven by expected carbon controls, to renewables and natural gas, which will dramatically affect wholesale power competitive landscape,” ICF reported.

This study is part of ICF’s Quarterly Outlook series, which aims to examine trends and developments likely to dominate energy markets for the next two decades.

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