OUR GOAL IS TO EVALUATE THE ADOPTION OF REJUVENATED COAL-POWER PLANTS AS A TECHNOLOGY PATH FROM HIGH- TO LOW-EMISSION POWER SYSTEMS. WE ACCOMPLISH THIS GOAL BY CONSIDERING THE ROLE OF ALTERNATIVE POLICY INSTRUMENTS TO STIMULATE ADOPTION AND THE RESULTING EXPANSION OF BIOMASS-BASED POWER MARKETS. CURRENT REGULATIONS AND THE LEGAL AND POLITICAL DEBATES ARE FOCUSED ON TRANSITIONING TO LOW CARBON EMITTING ELECTRICITY GENERATION, WHICH PLACES COAL-FIRED TECHNOLOGIES AT A SUBSTANTIAL ECONOMIC DISADVANTAGE. REJUVENATION, WHICH CONSISTS OF MODIFICATIONS THAT ALLOW EXISTING PLANTS TO CO-FIRE COAL WITH BIOMASS, RESULTING IN LOWER CARBON EMISSIONS PER UNIT OF ELECTRICITY GENERATED. WITH REJUVENATION, THE LIFE OF A POWER PLANT CAN BE EXTENDED BY DELAYING PLANT-REPLACEMENT DECISIONS, ALLOWING TIME TO ADOPT ALTERNATIVE TECHNOLOGIES. COAL-POWER REJUVENATION HAS THE POTENTIAL TO: 1) CREATE A NEW BIOMASS MARKET AND RE-ENERGIZE RURAL COMMUNITIES, 2) PROVIDE SUPPORT TO COAL-MINING COMMUNITIES IN TRANSITION TO DIVERSIFIED ECONOMIES, AND 3) CONTRIBUTE TO THE ECONOMIC VIABILITY OF BIOENERGY MARKETS AND THE ENVIRONMENTAL SUSTAINABILITY OF MODERN POWER SYSTEMS. THESE CONTRIBUTIONS ILLUSTRATE HOW PLANT REJUVENATION MAY CONSTITUTE A BEST PRACTICE THAT CONTRIBUTES TO THE ECONOMIC AND ENVIRONMENTAL SUSTAINABILITY OF EMERGING BIOENERGY AND BIOPRODUCT MARKETS. BUT PERHAPS MORE IMPORTANT, REJUVENATION MAY BE ONE OF THE FEW TECHNOLOGICAL PATHS THAT ARE CONSISTENT WITH THE INTERESTS OF BOTH INDUSTRY AND REGULATORS, CURRENTLY WAGING LEGAL BATTLES. THIS ASPECT IS KEY TO THE SOCIAL SUSTAINABILITY OF REJUVENATION, A FEATURE HARDLY DISPLAYED BY COMPETING ALTERNATIVES.REJUVENATION, CO-FIRING WITH BIOMASS, IS AN ATTRACTIVE OPTION. ENERGY PRODUCTION FROM BIOMASS HAS THE POTENTIAL TO IMPROVE PUBLIC WELFARE THROUGH REDUCTION IN GREENHOUSE GAS (GHG) EMISSIONS, REDUCED RELIANCE ON NONRENEWABLE FUELS, AND AID IN BRIDGING THE TRANSITION FROM FOSSIL FUELS TO LOW OR ZERO CARBON ENERGY SOURCES. IN PARTICULAR, THE GROWTH OF BIOMASS MARKETS IN THE UNITED STATES WILL DIRECTLY HELP THOSE SECTORS PRODUCING THE BIOMASS (THE FOREST AND AGRICULTURAL SECTORS) AND INDIRECTLY HELP RURAL COMMUNITIES SUPPORTING A BIOMASS FACILITY. DESPITE ITS PROMISE TO BENEFIT THE PUBLIC, BIOMASS CURRENTLY ACCOUNTS FOR LESS THAN 2% OF TOTAL U.S. ELECTRICITY GENERATION. COAL HAS HISTORICALLY BEEN THE PRIMARY U.S. FUEL FOR GENERATING ELECTRICITY, ACCOUNTING FOR APPROXIMATELY HALF OF ALL ELECTRICITY CONSUMED OVER THE PAST TWO DECADES. HOWEVER, IN 2015, MORE THAN 90% OF AMERICA'S COAL-FIRED POWER PLANTS WERE OVER 30 YEARS OLD. MANY OF THESE PLANTS DO NOT HAVE THE EMISSION TECHNOLOGY TO MEET NEW EPA AIR EMISSIONS REGULATIONS.BIOMASS IN GENERAL AND BIOPELLETS IN PARTICULAR BENEFIT SOCIETY AS A RENEWABLE RESOURCE AND CAN BE CO-FIRED IN COAL-POWER PLANTS. BIOPELLETS ARE PELLETIZED BIOMASS, WHICH INCREASE BIOMASS DENSITY YIELDING HIGHER ENERGY AND LOWER MOISTURE CONTENT AS WELL AS A UNIFORM SIZE FOR HAULING, HANDLING, AND USAGE. THIS PELLETIZATION DIRECTLY BENEFITS RURAL COMMUNITIES BY ADDING SIGNIFICANT VALUE ADDED TO RURAL PRIMARY PRODUCTION.UNDER THE RIGHT CONDITIONS AND POLICIES IT MAY BE ECONOMICAL TO REJUVENATE COAL POWER PLANTS THROUGH RETROFITTING AND CO-FIRING WITH BIOPELLETS. WITH SUCH REJUVENATION, THE LIFE OF A POWER PLANT CAN BE EXTENDED, WHICH DELAYS THE DECISION OF PLANT REPLACEMENT. PROVIDING AN AVENUE FOR DELAYING A DECISION RESULTS IN KEEPING THE OPTION OF REPLACEMENT OPEN, WHICH HAS VALUE. CONSIDERING THIS OPTION VALUE MITIGATES THE COST OF REJUVENATION MAKING IT MORE ATTRACTIVE. THE EXTENDED LIVES MAY ALLOW FOR THE REPLACEMENT WITH NEW TECHNOLOGIES NOT YET AVAILABLE, WHICH CAN LOWER THEIR COSTS. THIS MAY ALSO MAKE THE IMPACT OF REGULATION ON COAL-MINING COMMUNITIES MORE GRADUAL, ALLOWING TIME TO TRANSITION TO ALTERNATIVE ENTERPRISES. EXTENDING A POWER PLANT'S LIFE MAY CONSTITUTE A BEST PRACTICE, WHICH CONTRIBUTES TO ECONOMIC AND SOCIAL SUSTAINABILITY OF COMPLIANCE WITH ENVIRONMENTAL POLICIES. YET, THE ECONOMICS OF THIS TRANSITION PATH REMAIN MOSTLY UNEXAMINED, AS DO ITS IMPLICATIONS FOR COMPLIANCE COSTS. THIS GAP IN OUR BODY OF KNOWLEDGE IS SURPRISINGLY PERVASIVE, AS COMPLIANCE COSTS REMAIN A HOTLY DEBATED ISSUE IN THE POLICY ARENA.IN TERMS OF RISK MANAGEMENT, CO-FIRING HAS A POTENTIAL PORTFOLIO-EFFECT BENEFIT WITH TWO FUEL SOURCES REDUCING THE VOLATILITY OF FUEL PRICES. THE REDUCTION IN FUEL-PRICE VOLATILITY DIRECTLY BENEFITS CONSUMERS AND FIRMS BY REMOVING SOME PRICE UNCERTAINTY. REDUCED PRICE VOLATILITY IN COMBINATION WITH THE OPTION VALUE MAY RESULT IN SIGNIFICANT BENEFITS, WHICH ENHANCE THE FEASIBILITY OF COAL/BIOPELLET CO-FIRING. FAILURE TO ACCOUNT FOR THESE BENEFITS MAY NEGATIVELY BIAS ADOPTION WITH A CORRESPONDING LOSS IN PUBLIC WELFARE AND RURAL DEVELOPMENT.SUCCESSFUL ATTAINMENT OF OUR GOAL RELIES ON A SET OF SUPPORTING OBJECTIVES:ESTIMATE THE MINIMUM COST OF DELIVERING COAL/BIOPELLET CO-FIRING POWER BY ESTIMATING THE OPTION VALUE, THE PORTFOLIO EFFECT, AND THE OPTIMAL TIMING OF WHEN TO RETROFIT AND FINALLY REPLACE A POWER PLANT IN A STOCHASTIC ENVIRONMENT. THE THEORY OF ASSET REJUVENATION/REPLACEMENT WILL BE COMBINED WITH REAL OPTIONS ANALYSIS IN DEVELOPING THE OPTIMIZATION MODEL.ESTIMATE U.S. RESIDENT'S DEMAND FOR BIOMASS-BASED POWER. THIS ENTAILS ESTIMATING CONSUMERS' WILLINGNESS TO PAY (WTP) FOR KEY ATTRIBUTES OF THIS POWER SOURCE AND EXPLICITLY CONSIDERING THE LIKELY HETEROGENEOUS PREFERENCES OF RESIDENTS.DETERMINE THE DIFFERENCE BETWEEN SUPPLY (DELIVERING COST) AND DEMAND (WILLINGNESS TO PAY) OF BIOMASS-BASED POWER. GIVEN THAT CONSUMER WTP IS EXPECTED TO VARY ACROSS CONSUMER SEGMENTS, DIFFERENCES WILL BE DETERMINED ACROSS SPECIFICALLY IDENTIFIED SEGMENTS.DETERMINE HOW CURRENT AND PROSPECTIVE POLICIES MAY AFFECT THE GAP BETWEEN SUPPLY AND DEMAND OF BIOMASS-BASED POWER, AND THE POSSIBLE ADOPTION OF CO-FIRING BIOPELLETS WITH COAL.FULFILLMENT OF SUPPORTING OBJECTIVES AND OUR GOAL PROVIDES INSIGHTS INTO THE FOLLOWING QUESTIONS:IS IT FEASIBLE (BEST PRACTICE) TO RETROFIT PLANTS FOR CO-FIRING BIOPELLETS WITH COAL IN ORDER TO EXTEND THEIR LIVES?WHAT IS THE VALUE OF THE OPTION TO EXTEND A PLANT'S LIFE WITH THE ANTICIPATION OF FUTURE DEVELOPMENT OF ALTERNATIVE POWER-PLANT TECHNOLOGIES?WHAT POLICIES ARE REQUIRED TO SPUR THE DEVELOPMENT OF A U.S. CO-FIRING COAL AND BIOPELLET TECHNOLOGY?