This is part two in a two-part series that evaluates the coal ash management costs and impoundment closure plans for electric utilities and power providers in the U.S. The first part can be found here.

Utilities throughout the U.S. are recycling or finding new uses for a substantial portion of their coal combustion residuals as they try to manage costs when shutting down thousands of acres of storage ponds to comply with federal guidelines.

About 250 out of 400 coal ash ponds that violate certain groundwater provisions must initiate closure by October 2020 to comply with the U.S. Environmental Protection Agency's Coal Combustion Residuals, or CCR, rule, a February analysis showed.

While utilities are spending billions of dollars to meet this deadline, as well as stricter regulations in some states, they are also looking for effective solutions that limit the financial impact on their balance sheets and customers' electric bills.

"We cannot have our customers fund science experiments in the hope that something might work," said Jessica Bednarcik, vice president of coal combustion products, operations, maintenance and governance for Duke Energy Corp., which has the most coal ash storage sites and coal ash volume in the U.S. "We really focus on things that have proven technology and a proven market."

In most cases, utilities that are looking to excavate or reduce the footprint of their impoundments turn to beneficial use — defined by the EPA as recycling or reusing coal ash instead of disposing of it — to lower their ash management costs by reducing the volume of material they need to discard.

But, depending on the method of recycling or beneficial reuse, it is unlikely companies are turning a profit, said James Roewer, executive director of the Utility Solid Waste Activities Group.

"I'm not sure that, given the fact that we don't have 100% utilization [of reuse], you're going to see a profit center, being your ash marketing, overall," Roewer said.

Shipping the ash long distances might also eat into potential revenues generated by selling it, Roewer added.

The American Coal Ash Association's most recent survey results show that 64% of the coal ash produced in 2017 was recycled. This amounts to 71.8 million tons of coal combustion products beneficially reused out of 111.3 million tons produced.

"Some of those are returning money to the utility, some are not," Roewer said.

Market resurgence

"We're kind of in a position where all of these efforts to educate people and create markets and that kind of thing have really taken off," said Thomas Adams, executive director of the American Coal Ash Association. "And now, we're having trouble keeping up with supplying enough material to keep everybody happy."

He noted that demand for fly ash, which can be used in concrete, "is running well ahead of supply. The same thing is true for synthetic gypsum [another coal combustion byproduct] for wallboard manufacturing."

Adams and Roewer pointed to the 2015 CCR rule as driving a resurgence in the beneficial reuse and coal ash recycling market.

The market for reusing coal ash, which picked up steam during the Clinton administration at the beginning of the century, was "interrupted" by the 2008 Kingston coal ash spill and the Obama administration's view on coal use, according to Adams.

"The good news is, since the 2015 [CCR] rule was announced, once again declaring that the ash didn't warrant management as a hazardous waste, the markets have started to recover, and we've started to see another increase in [the beneficial reuse of] these materials," Adams said.

Roewer added that the "regulatory barrier is substantially overcome" by the EPA's determination.

Technical barriers around the reuse of coal ash are being addressed as well, Roewer said, citing efforts by researchers and marketers. "It is a wonderful success story in terms of the beneficial use of the material."

Duke's approach

Duke Energy notes on its website that it recycled about 79% of the coal ash and 95% of the gypsum it produced across its system in 2018.

The company's ash has been beneficially reused in structural fills as part of mine reclamation projects and in a runway expansion project at an airport in Asheville, N.C. The material also has been used to replace sand and gravel in the production of concrete blocks.

"We look for things that fully encapsulate the ash," Bednarcik said.

About 180 different organizations, individuals and investors have approached Duke Energy over the years and expressed interest in reusing and recycling the ash.

"Unfortunately, right now, about 99% of the applications that are presented to us are just unproven," Bednarcik said.

American Electric Power Co. Inc. also sells ash for beneficial reuse and has some sort of recycling or reuse program in place at the majority of its coal plants.

"The material we can't sell, it will go to lined regulated landfills for permanent disposal," said Gary Spitznogle, AEP's vice president of environmental services.

Both utilities said the majority of the ash that is still being produced but is not recycled will go to a dry storage site.

Dominion's plan

In Virginia, Gov. Ralph Northam signed bipartisan legislation in March that requires Dominion Energy Virginia to excavate and recycle coal ash from the unlined impoundments at four power plants.

The utility must excavate about 27 million cubic yards of coal ash adjacent to rivers at its Possum Point, Bremo Bluff, Chesterfield and Chesapeake power stations. At least 25% of the ash would be recycled for beneficial use, and the rest would be stored in lined landfills.

Dominion Energy Virginia, known legally as Virginia Electric and Power Co., must finish closing each coal ash impoundment within 15 years.

A November 2018 report commissioned by Dominion Energy Inc. estimated that about 45% of the ash, or 12.5 million cubic yards, stored at its Virginia power plants could be recycled in a 15-year time frame to comply with state and federal regulations.

The cost estimates to recycle 45% of the coal ash ranged from more than $2 billion to nearly $6 billion.

In a previous report, engineering and consulting firm AECOM concluded that leaving more than 25 million tons of ash in place at three of Dominion Energy Virginia's coal plants is the least-cost and lowest-risk option.