Clean coal isn't climate-friendly yet
By Reuters
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U.S. utilities are planning a fleet of new coal plants amid bountiful domestic supplies of the fuel and all-time high natural gas prices.
But only a fraction of those will use the Holy Grail of clean coal technology - integrated gasification combined cycle (IGCC) - because of the high initial cost.
IGCC gasifies coal before it's burned, cutting large quantities of pollutants harmful to human health, such as particulates, small components and mercury, from going up the smokestack.
"This is the way we need to go to preserve the coal option," said John Stowell, environmental strategist at utility Cinergy Corp.
IGCC can be paired with pipes that capture the leading greenhouse gas carbon dioxide. Most scientists believe greenhouse gases lead to global warming that could have catastrophic consequences such as rising seas and stronger hurricanes.
Capturing can be added much more cheaply to IGCC than conventional coal plants.
American Electric Power Co Inc. and Cinergy plan to build IGCC plants in the Midwest in the next decade. Both companies are also involved with the U.S. Energy Department's FutureGen coal demonstration project which aims to capture carbon.
But they don't plan yet to add the capturing equipment on the IGCC plants they aim to build.
That concerns some environmentalists, especially as the technology could increase coal use and open up vast areas of high sulfur coal in the Midwest to mining that have been off limits since the 1990 Clean Air Act.
"If IGCC is not built with carbon capture and storage, it may as well be the old dirty stuff," said Dave Hamilton, the Sierra Club's global warming program director. "It will be a cumulative increase in our carbon emissions."
President George W. Bush dropped out of the Kyoto Protocol on global warming soon into his first term. That means U.S. companies aren't held to limit greenhouse gases as they are in most other industrialized countries.
"Until there is such a requirement we're not going to put that technology in place at this point," said Melissa McHenry, a spokeswoman for AEP.
IGCC start-up costs can run 20 percent over conventional plants, but new incentives could ease the pain.
The new federal Energy Act contains up to $800 million in investment tax credits for IGCC. Those could help utilities build six to 10 of the first commercial IGCC plants by 2010 or soon after, said Stuart Dalton, a power expert at the Electric Power Research Institute, an industry funded group.
Dalton said those incentives are in addition to billions in other federal coal, gasification and carbon sequestration incentives as well as incentives in Illinois and other states.
"It makes it (IGCC) something people are considering now, even more than six months ago," he said.
In addition to the start-up costs, electricity prices could rise if power plant operators adopt carbon capturing technology, according to a recent U.N. report.
But carbon capturing on IGCC plants adds only 25 percent to the cost of the electricity, compared to a 60 percent cost boost for electricity from conventional coal plants that add capturing, said Ed Lowe, the gasification manager at GE Energy. GE Energy develops IGCC units for utilities with privately held Bechtel.
In addition, Lowe said, IGGC's can remove 90 percent of the mercury in coal at one-tenth of the cost as conventional clean coal plants. And GE also aims to halve the startup cost, he said.
IGGC plants are so clean that utilities hope soon they will lead to a boost in Midwestern coal mining.
Connie Holmes, a spokeswoman with the National Mining Association, said IGCC and other clean coal technologies could open high-sulfur coal fields in Illinois, Ohio, Western Kentucky and Pennsylvania that miners have avoided since the 1990 Clean Air Act made burning fuel from the region more expensive.
U.S. electricity demand should rise 50 percent from 2003 to 2025, according to the DOE. Much of that generation could be coal-based as natural gas supplies thin and as U.S. communities protest the building of liquefied natural gas (LNG) ports.
More than 90 percent of power plants built since the late 1990s run on gas. As a result, gas prices, which averaged about $2 per mmBtu throughout the 1990s, are on track to average a record $7 per mmBtu this year, their third consecutive record year.
In the mid-1990s, not one utility had plans to build a coal plant. Now more than 120 U.S. coal plants have been proposed, more in the last 12 months than the last 12 years, according to the National Energy Technology Laboratory.
Companies are eyeing looming carbon caps, such as those envisioned by the Regional Greenhouse Gas Initiative, a group of nine northeastern states. RGGI seeks to break with Bush by forming regional carbon dioxide markets.
While utilities don't yet capture carbon, those with IGCC could be well placed to do so in the future. AEP agrees that over time, there could be cost savings.
"We feel that for the operating life of the plant, 40 or 50 or 60 years, it (IGCC) is the best and most cost effective route to take for customers and shareholders," said AEP spokesman Pat Hemlepp.
Some environmentalists are cautiously optimistic about IGCC, but say renewables such as wind power and solar could replace some of the need for coal. "We believe it should be considered the requirement for a modern power plant, but until (carbon constraint) happens, this is still just the shiny object that distracts us from the nearly 500 dirty coal plants that are polluting the air," said Greenpeace energy policy specialist John Coequyt.
