U.S. power industry set to spend $3.1B on water and wastewater treatment

Dec. 4, 2015

As the largest user of water and contributor to surface water pollution, U.S. thermal power plants — especially coal-fired facilities — are facing significant regulatory scrutiny.

BOSTON — Dec. 2, 2015 — New environmental regulations and other changes in the U.S. power industry are driving investments in water and wastewater treatment, according to a new analysis by Bluefield Research.

At the end of September the U.S. Environmental Protection Agency (EPA) announced the first national limits on levels of toxic metals in wastewater that can be discharged from power plants, noted the release. The rules are expected to cut harmful discharges by 1.4 billion pounds annually, as well as reduce water withdrawal by 57 billion gallons per year.

As the largest user of water and contributor to surface water pollution, U.S. thermal power plants — especially coal-fired facilities — are facing significant regulatory scrutiny, Bluefield said in the release. The report identifies 206 plants in coal-rich, Mid-Atlantic and Midwestern states that are a central focus for EPA policymakers.

Taking account of key trends that are impacting investments in water and wastewater treatment solutions, including discharge regulations, fuel-switching and water supply risks, the research firm has increased its forecast for the power sector’s water-related capital expenditure (CAPEX) in 2015-2025 to $3.1 billion, stated the release.

The EPA’s final Steam Electric Power Generating Effluent Guidelines set new or additional requirements for wastewater streams from flue gas desulfurization, fly ash, bottom ash, flue gas mercury control, and gasification of fuels such as coal and petroleum coke.

According to Bluefield, the rules lay the groundwork for water system upgrades to coal-fired electric power plants with capacities over 50 megawatts. Meanwhile, an increase in greenfield natural gas plant additions — to replace an expected 19 GW of coal plant retirements and to meet demand growth — will also help drive water-related CAPEX.

“79 percent declines in natural gas prices since 2008 and increased adoption of cost-competitive renewables make the shift to new plants that much easier, paving the way for new water systems,” said Erin Bonney Casey, an analyst for Bluefield Research, in the release. “But let’s be realistic, the U.S. power sector is incredibly mature. Any changes to water-related CAPEX will be incremental.”

“As these new plants are developed, the role of dry cooling, municipal wastewater reuse and zero liquid discharge solutions will increase as well,” Bonney Casey added in the release. “The risk to utilities and independent power producers is not just environmental but also operational. The adoption of new water solutions will be more far-reaching than just drought-stricken California; we have seen activity in Florida, Maryland and Pennsylvania.”

You can find the entire release here.

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