-----

Resources



Market News

 June 06, 2007
What to do about the projected coal boom?

 Washington, D.C., USA (GLOBE-Net) -- By 2030, an estimated 1,400 gigawatts of new coal-fired power plants will be installed worldwide, projects the International Energy Agency. Without emissions controls, greenhouse gas emissions from these new plants before 2030 will equal roughly 50 percent of all fossil fuel emissions over the past 250 years.

A new report from the 'progressive think tank' Center for American Progress examines how to reconcile this with the need to stabilize atmospheric GHG concentrations, and promotes rapid deployment of carbon capture and storage technology. CAP clearly advocates a strong role for coal in the future energy supply mix, and provides some interesting analysis on how this fuel, which will almost certainly continue to be an important energy source worldwide, can be made more sustainable.

In the United States alone, about 145 gigawatts of new power from coal-fired plants are projected to be built by 2030, resulting in CO2 emissions of 790 million metric tons per year in the absence of emission controls. By comparison, annual U.S. emissions of CO2 from all sources in 2005 were about 6 billion metric tons.

Policymakers and scientists now recognize that the current growth of greenhouse gas emissions must be reversed and that emissions must be reduced substantially in order to combat the risk of climate change, argues the Center for American Progress (CAP) report. Yet a dramatic increase in coal-fired power generation threatens to overwhelm all other efforts to lower emissions and virtually guarantees that these emissions will continue to climb. Lack of progress in countries such as China and India would doom to failure global efforts to combat global warming, the authors add.

According to CAP, there is a potential pathway that would allow continued use of coal as an energy source without magnifying the risk of global warming. In essence that is the capture and long term storage of carbon dioxide from coal-fired plants.

Installing carbon capture and storage (CCS) technology at new coal plants is an energy challenge which must be met soon, and consequences of delay will be far-reaching - a new generation of coal plants could well be built without CO2 emission controls, says CAP.

According to the report, one major barrier to deployment of CCS is that only a small percentage of new coal plants built before 2030 are expected to use Integrated Gasification Combined Cycle (IGCC) technology, which is well suited to CCS. IGCC plants are currently expensive, and those that are built are not likely to capture and sequester their CO2 emissions in the current regulatory environment since add-on capture technology will reduce efficiency and lower electricity output, CAP notes.

The report concludes these barriers can be partially overcome by tax credits and other financial incentives and by performance guarantees from IGCC technology vendors. However, CAP believes it is unlikely that IGCC plants will replace conventional coal plants in large numbers or that those plants which are built will capture and store CO2, because even cost-competitive new technologies are usually not adopted rapidly, and because there is currently no business motivation to bear the cost of CCS systems.

A suggested policy framework

The CAP paper considers how to best change the economics of coal power so that CCS can be adopted by plant developers. The authors evaluated a number of policies, including a GHG cap-and-trade program, a carbon tax, a "low carbon portfolio" standard for utilities, and an emissions performance standard for new coal power plants that would limit CO2.

According to their analysis, an emission performance standard for new power plants is likely to be most effective in spurring broad-scale adoption of CCS systems. A cap-and-trade system is deemed unlikely to result in a sufficiently high market price for CO2 (around $30 per ton) in the early years to assure that all coal plant developers adopt CCS systems, due to the current U.S. political environment. A carbon tax at a high enough level is seen as politically infeasible, while other regulatory measures are seen as complex or legally difficult to implement.

CAP recommends an emissions performance standard that limits new plant emissions to levels achievable with CCS, applying to all new plants built after a certain date. Some flexibility could be allowed in the timing of CCS installation so that the power generation industry can gain more experience with various types of capture technology and underground CO2 storage.

For example, all plants that begin construction after 2008 could be subject to the standard and would be required to implement carbon capture technology by 2013, and then to meet all sequestration requirements by 2016, says the paper.

One consequence of mandating CCS would be an increase in the cost of coal-fired electricity. To offset this, CAP recommends that government take steps to offset the additional costs of installing CCS systems and provide relief from electricity price increases.

One area which is not fully evaluated is the possibility that the increased costs of CCS will lead many power developers to switch to alternative energy sources, such as renewables. Other analysts have demonstrated that this will be the case in some markets, though coal is still expected to play a role.

CAP advocates U.S. leadership in clean coal technology, and increased exports to China and India to help control GHG emissions while boosting economic performance. While CAP can certainly be called a "coal supporter", their call for investment in this area has been echoed by scientists at MIT and others.



For More Information: Source Document