April 15, 2008

Global Monitor (April 2008)

Tenaska proposes first new coal-fired plant with carbon capture

Tenaska Inc. is developing a site near Sweetwater, Texas, for a new 765-MW gross, 600-MW net supercritical coal-fired power plant that will capture up to 90% of the CO₂ in the stack gas. The captured CO₂ will to be used in enhancing oil production in the Permian Basin. The proposed construction site for the $3 billion Trailblazer Energy Center is a 1,919-acre tract east of Sweetwater and north of Interstate 20 in Nolan County. Construction could begin in late 2009 and be completed in 2014 (Figure 1).

1. First out of the gate. Tenaska has proposed the first coal-fired supercritical power plant with integrated CO2 capture. Source: Tenaska Inc.

If built, the plant will be the first new commercial coal-fueled power plant, other than small research projects, to capture and provide for storage of CO₂. The CO₂ would be captured and transported via pipeline to oil fields in the Permian Basin, where it will be used in enhanced oil recovery and be stored in the basin’s geologic formations. CO₂ has been used to increase oil production in West Texas for more than 30 years (Figure 2).

2 Bury it deep. Captured CO2 from the Trailblazer Energy Center will be used for enhanced oil recovery in the Permian Basin. Source: Tenaska Inc.

The volume of CO₂  expected to be sold to oil producers could be used to recover enough oil to add more than $1 billion a year to the Texas economy.

“Nolan County is home to more wind turbines than any other place in the United States,” said Nolan County Judge Tim Fambrough. “The Tenaska Trailblazer Energy Center builds on this area’s reputation as a location for progressive, environmentally responsible electric generation. We are delighted to welcome Tenaska to our community.”

An air permit application, the first formal step in gaining approval to build the plant, was filed in early March with the Texas Commission on Environmental Quality, according to David Fiorelli, president and CEO of Tenaska’s Business Development Group.

The final decision to proceed with the project will be made in 2009 based on a number of factors, including the availability of local, state, and federal incentives; final project cost estimates; and projected market prices for electricity and CO₂. Current estimates of these factors make the project appear to be economically feasible. In the meantime, Tenaska is working with Sweetwater area officials to determine the project’s feasibility and to provide accurate and timely information to Sweetwater area residents.

Concerns raised over growth of China’s CO₂ emissions

The growth in China’s CO₂ emissions is far outpacing previous estimates, making the goal of stabilizing atmospheric greenhouse gases even more difficult, according to a new analysis by economists at the University of California, Berkeley and UC San Diego. The study is scheduled for print publication in the May issue of the Journal of Environmental Economics and Management.

Previous estimates, including those used by the Intergovernmental Panel on Climate Change, say the region that includes China will see a 2.5% to 5% annual increase in CO₂ emissions between 2004 and 2010. The new UC analysis pegs China’s annual growth rate at 11%, at a minimum, for the same time period. In contrast, the U.S. Energy Information Administration reports U.S. CO₂ emissions decreased 1.3% in 2006 from the previous year. Data for 2007 is not yet available.

The researchers’ most conservative forecast predicts that by 2010 there will be an increase of 600 million metric tons of carbon emissions in China over the country’s levels in 2000. This growth from China alone would dramatically overshadow the 116 million metric tons of carbon emissions reductions pledged by all the developed countries in the Kyoto Protocol and surpassed those of the U.S. last year.

Put another way, the projected annual increase in China alone over the next several years is greater than the current emissions produced by either Great Britain or Germany.

The authors pointed out that after 2000, China’s central government began shifting the responsibility for building new power plants to provincial officials, who had less incentive and fewer resources to build cleaner, more efficient plants, which save money in the long run but are more expensive to construct. Government officials turned away from energy efficiency as an objective to expanding power generation as quickly and cheaply as they could. Wealthier coastal provinces tended to build clean-burning power plants based upon the very best technology available, but many of the poorer interior provinces replicated inefficient 1950s Soviet technology.