Kerry proposal would ban conventional PC plants and
require CO2 capture and storage
Should this be viewed as pro-IGCC or just another attempt to slow the coal rush?
By late April, legislative activity in Washington related to limitations on greenhouse gases has reached fever pitch. Congressional hearings are being held almost continuously, and it seems that everyone is coming up with a proposal for some form of regulation.
It already seems that a cap-and-trade system for CO2 is inevitable, but legislators are still groping as to how it would work.
Now a growing sense of urgency about climate change is pushing legislators to propose some pretty bold initiatives.
One case in point: a bill, The Clean Coal Act of 2007, introduced last week by Sen. John Kerry (D-Mass.).
Kerry's bill would go so far as placing an immediate ban the building of any new coal plants unless they included provisions for capturing and sequestering CO2 emissions.
To quote our almost president: "This bill is our No. 1 solution to global warming. Unless we can build clean power plants, we should not be building them at all.”
Kerry's proposal is actually an amendment to the Clean Air Act, and would establish a New Source Performance Standard for CO2 emissions for all new coal-fired power plants.
When introducing the bill, Kerry, now the chairman of the Senate subcommittee on Science, Technology and Innovation, made the point that the utility industry is desperately looking for "certainty regarding mandatory greenhouse gas standards" so that planning for new plants can move forward.
He also said that there is need for a uniform national standard as opposed to a patchwork of standards being adopted by a growing number of states.
Some see it as a ban of new coal plants. But if there are to be any new plants built, whether they be gasification-based or PC-based, the proposed requirment is that CO2 emssions be limited to 285 lb/MWh.
Since the typical conventional PC plant emits close to a ton per MWh, this requirement translates to a capture rate of about 85%.
As one industry insider close to the DC scene observed, "this might be viewed by some as favoring IGCC. But even if IGCC offers the low-cost means of meeting the proposed CCS requirements, it may put coal-based power - whether gasification- or PC-based - out of reach.
"Who's going to pay for it?" he asks.
Others are saying that a requirement to include CCS "would kill coal. The only thing that might get built is a natural gas plant", they say.
"Experts" say technology is not here yet
Does the Kerry proposal have a chance of surviving the debate?
Or is it just too far-reaching at this stage of the fledgling US commitment to join the world community in the mission to slow global climate change?
Given the current politically charged situation in Congress, almost anything that would show how the Bush administration has avoided this major environmental issues is possible. But with nearly 200 proposed coal-based power projects in the US affected, and the very growth of the coal industry and the ability to meet future power demands at stake, any serious attempts to bring this bill to a vote will face steep opposition.
For one thing Congress has been hearing a stream of expert comment on how the technology needed to achieve Sen. Kerry's objectives still needs to be demonstrated - and is at least 10 to 15 years away from being commercially available.
Maybe I'm naive. But what baffles me is how all of these "experts" want to ignore what has been going on at the Dakota Gasification operation in North Dakota for almost 7 years now.
Not only are they capturing and sequestering CO2, but they are making money at it - and that is without any kind of trading scheme in effect.
A Google search (CO2 for Sale) would tell them that the equivalent CO2 emissions from a 400 MW power plant is being stripped from syngas used to produce SNG, compressed and piped some 200 miles north into Canada where it is forced deep underground to enhance oil production at an old oil field in Saskatchewan.
The hope is that our Senators and Congressmen can see through this testimony that would have them ignore the facts. They need to be aware that CCS has already been shown in full scale to be technically and commercially sound.
They need to get on with the business of passing a law that would give the utility industry a clear national policy and a path to follow in moving foward.
Others want even quicker action
It will be interesting to see how the power and coal industries come down on Sen. Kerry's proposal, or even if it ever sees the light of day. Meanwhile, others are calling for even quicker and more severe action.
Sen. Barbara Boxer (D-Calif.) suggested that the country should be launching a “Manhattan Project”-type initiative on carbon sequestration. She said that the estimate of 12-15 years for the use of CCS to be widespread is far too long.
"More than 20 percent of carbon dioxide emissions come from coal plants. Advanced cleaner coal can help us solve this great threat that is facing us," she said.
"The most disturbing thing is what could happen if we don't respond to this. We are the Saudi Arabia of coal and if we could figure this out, we'll be well on our way to energy independence in a responsible way."
Sen. Byron Dorgan (D-N.D.), Chairman of the Senate Energy and Natural Resources committee joined Boxer and Kerry in their concern over the lack of urgency in the U.S. on reducing CO2 emissions.
“I hope to move as aggressively as we can persuade Congress to do so” on promoting CCS technology, he said.
Sen. Craig Thomas (R-Wyo) joined committee members calling for quicker deployment of CCS, criticizing an on-going DOE study. “Sometimes we get so caught up in research…….we know how to do this,” he said.
To punctuate the message, Joseph Chaisson, a director of the Clean Air Task Force (CATF), an environmental advocacy group told one Senate committee that the U.S. must act to commercially deploy IGCC technology as soon as possible.
He put forth the CATF action plan for a sound national coal policy as follows:
* Ban the construction of conventional new coal burning power plants.
* Rapidly commercialize the use of IGCC for power generation to benefit from its reduced environmental footprint.
* Urgently demonstrate large-scale geologic storage of CO2, and then require all new plants to include at least 90% carbon capture and sequestration.
* Demonstrate and deploy advancements such as underground coal gasification to further shrink IGCC’s environmental footprint.
* Reform coal mining practices worldwide, imposing effective U.S. regulation of coal plant solid waste disposal.
* Reduce water use and associated impacts of coal mining and coal-based generation to the minimum practical levels.
* Increase the efficiency of IGCC to the maximum practical levels over time.
Chaisson emphasized that IGCC is seen as the key enabling technology for carbon capture and storage.
He said that “while it is possible to retrofit a coal combustion plant with carbon capture technology, it would cost twice as much as capturing carbon from an IGCC plant”.
In either case, there is a very high price to pay in terms of loss of plant thermal efficiency – with the heat rate of a PC plant increasing by some 30-40 percent, and that of an IGCC plant by 20-30 percent.
Based on current technology, said Chaisson, “IGCC power generation is likely to be the most availing path forward If we are to turn the world coal tide to a near-zero carbon footprint in the next 20 years.”
Is cap-and-trade the key?
Regardless of the fate of Sen. Kerry's Clean Coal Act, those close to the scene in DC are saying that a mandatory cap-and-trade regulatory system for regulating greenhouse gases in the general economy seems to be inevitable.
Such a system would set a ceiling on emissions and grant credits to companies that take measures to lower emissions. These credits could be traded (sold) to companies with higher emissions.
In theory, this could be what enables a proposal such as Sen. Kerry's work. If the value of CO2 credits are high enough, they might provide enough incentive for plant developers to include the necessary provisions for CCS.
Some pretty serious players are already lining up to cash in on it. Example: AES and GE joining with a plan to trade "disposal" of methane - which has 20 times the greenhouse effect of CO2 - for emissions of CO2.
An alternative would be a "carbon tax", where the government would set up a trust fund to support investment to reduce emissions.
Energy-related committees in both houses have been holding hearings focused on the pros and cons – and potential pitfalls – of legislating a cutback in CO2 emissions.
Spokesmen from Europe have appeared at hearings to describe how the EU's 2 year-old system has been working (or not working) there.
As for the EPA, and its role in all of this, Stephen Johnson, EPA Administrator, told one of the Senate committees that the Supreme Court ruling was limited to vehicular emissions of CO2, and that a separate determination would have to be made as to whether or not such emissions from stationary sources were to be included in any new standards.
If that were to be the case, he said, one of the remedies available to the EPA would be to set up a cap-and-trade system.
Congressional Budget Office warns of doom and gloom
The Congressional Budget Office (CBO) released a report that focused on how a cap-and-trade scheme to limit CO2 emissions would come at the cost of greatly inflated prices for electricity and other forms of energy.
That should not be surprising, given the substantial impact of CO2 capture on power plant cost and efficiency that has been seen in so many recent studies. (See article in this issue of GTW.)
Additionally, the CBO report warns that any attempt to limit CO2 emissions would cause higher operating costs across the economy and result in job losses. It suggests that the negative impacts would particular hurt the poor.
Predictably, critics of proposed regulations and climate-change skeptics were quick to embrace the CBO report. One ranking Republican senator called the report a “devastating indictment.” He said that CO2 cap-and-trade schemes are doomed to “utter failure”
Back to reality - utility chooses “capture-ready” SPC approach
Roberto Denis, a senior VP of Nevada’s Sierra Pacific Resources, told one Senate committee that in spite of all the new focus on limiting CO2 emissions, and increased efforts to develop renewable energy, his company still needs to build the 2,500 MW Ely Energy Center, which will use super-critical PC technology.
He explained that company engineers and planners decided against IGCC, as it was not shown to be economical when using high moisture, western coal.
He said Sierra Pacific fully supports the conclusions of the MIT “Future of Coal” study that: “new coal units must utilize the best commercially available technologies and must be built to accommodate retrofits when new large scale carbon capture and sequestration (CCS) technologies are demonstrated feasible.”
“The new Ely coal complex will do just that. The first two units are being designed so that when CCS is available we will have a physical facility that can be retrofitted to enable us to capture the CO2 and identified the land for a CO2 storage site.”
According to the MIT report, such a retrofit (without cost of storage) could cost the utility (ratepayers?) upwards of 60 percent of the original plant cost!
Who said that this Mission to Save the Planet was going to come cheap??