ANALYSIS-Georgia order seen hurting U.S. coal investment

By Eileen O'Grady and Timothy Gardner

HOUSTON, July 1 (Reuters) - Developers of coal-fired power plants in the U.S. will face yet more obstacles since a Georgia court overturned an air permit for a new coal plant, saying the plant needed to limit emissions of carbon dioxide, a greenhouse gas blamed for global warming.

Environmental groups predicted Monday's ruling would discourage investment in coal plants while supporters of the fuel said the ruling was unlikely to be seen as a legal precedent in other states.

While the legal importance of the Georgia decision remained cloudy, financial community reaction may be more visible, said Matt Preston, principal analyst with Hill & Associates, a Wood Mackenzie company focused on coal.

"This adds to the uncertainty as if that was needed," Preston said. "Until there is a more clear path for coal projects with regard to climate change, it will be more difficult to raise money for coal projects."

The only point observers agreed on was that Monday's court ruling was "unprecedented" in scope as it relates to the need for coal plants to regulate carbon emissions now.

"It could be a real harbinger of things to come," said Frank O'Donnell, president of Clean Air Watch in Washington.

Rising construction costs and public concern about climate change have already led major utilities to cancel dozens of coal plants in the past two years. Even so, more coal plants are now under construction in the U.S. than in the past two decades.

About 28 coal plants with a total capacity of 14,885 megawatts are currently under construction across the U.S., according to a government report. Another 20 projects have permits or are near construction and as many as 66 coal plants have been announced or are in the early stages of development.