A number of recent developments suggest that continued use of a plentiful and relatively affordable fuel may have a future worldwide that is brighter than it now seems. That’s because, after at least a decade of rhetoric about “clean coal,” cleaner coal is slowly becoming a reality. Though many may see these developments as baby steps, it is also true that, as the familiar Chinese aphorism says, “The journey of a thousand miles begins with a single step.”
Lower U.S. Emissions
On Sept. 30, the U.S. Environmental Protection Agency (EPA) released its fourth year of Greenhouse Gas Reporting Program (GHGRP) data, showing that in 2013, reported GHG emissions from large industrial facilities were 20 million metric tons higher (0.6%) than in the prior year. An increase in coal use for power generation was cited as the primary reason for the uptick. How is that good news, you ask?
The recent increase is likely a small blip, given scheduled retirements of older, less-efficient U.S. coal-fired plants in the near future and the overall trend. The EPA notes that between 2011 and 2012, “emissions reported to the GHGRP declined by 4.5% . . . . This decline was driven by a 4.7% decline in emissions from power plants.” Overall since 2011, GHG emissions from power plants have dropped faster than emissions from all other sectors, whose trend lines are virtually flat.
Carbon Capture Advances
Later the same week, on Oct. 2, the first full-scale post-combustion carbon capture and sequestration project at an operating coal-fired power plant was inaugurated just north of the U.S. border in Saskatchewan. (For more on the Boundary Dam project, see the lead story in this issue’s Global Monitor department.)
Later this year, a commercial-scale CO2 mineralization process plant is scheduled to open at a cement plant in Austin, Texas, representing a new approach to handling GHGs captured from other industrial plants, including power plants. Instead of compressing and piping captured CO2 for use or storage underground—an approach that is geology-dependent and raises concerns about long-term sequestration—this and other approaches under development would enable both byproduct sale and simpler, solid disposal rather than gaseous storage.
Thinking Globally, Acting Locally
Some of those opposed to U.S. GHG-cutting policies argue that we shouldn’t be the leaders in emissions reductions, because developing nations are building gigawatts of new fossil-fueled capacity that will position the emerging nations for economic advantage. There is some justifiable concern about energy costs and the siting of industrial facilities. But something unexpected is happening: By all accounts, China is shifting from an energy-intensive industrial economy to a more service-oriented one, which is helping it reduce overall emissions. The nation also has developed several carbon cap-and-trade programs that account for the largest volume of emissions after the European Union’s program. Though China remains the world’s largest GHG emitter, it is also taking sizable, independent steps toward reducing emissions.
In fact, if China follows through on plans announced in August for a nationwide GHG cap-and-trade plan by 2016, there could be “a profound impact on corporate credit quality,” according to Standard & Poor’s (S&P) rating firm. The Chinese market would “effectively set the benchmark for carbon prices worldwide.” What does this mean for the aforementioned corporate credit quality? “Winners will be those that are proactive in managing their carbon emissions in their business operations and are strategic in managing emission allowances during financial transactions,” according to a Sept. 16 S&P commentary.
China’s War on “Traditional” Emissions
As examined in “China’s War on Air Pollution” in this issue, dangerous air quality in China’s urban areas has led the country’s leaders to set ambitious goals for reducing or, in some cases, eliminating the use of coal for heating and power generation. Where continued coal use is allowed, rules going into effect this year for sulfur and nitrogen oxides, particulate matter, and mercury are stricter than those on the books in Europe, the U.S., and Canada. And although enforcement of environmental regulations has been sketchy in the past, China is also beefing up enforcement.
During the last Five-Year Plan period, 2006 to 2010, China met its goal of reducing the energy intensity of its economy by 19.1%; from 2005 to 2013, energy intensity dropped nearly 30%. The shift toward a service economy is part of that story, but another way China is attempting to lower all fossil fuel emissions is with efficiency. Switching to more efficient light bulbs, motors, and appliances as well as demand response programs are all being pursued.
The Future of Coal Power
These developments are good news for folks in the coal power business. Yes, first-of-a-kind technologies are usually expensive, but given a market, regulations, or both (which there are for both conventional and GHG pollutants in the major coal-burning parts of the world), the cost curve does bend down. We’ve seen technology costs for wind and solar generation decrease, and there’s no reason costs for carbon capture, use, and storage technologies shouldn’t follow the same trajectory.
Yes, there are energy penalties for added environmental control systems, which may make individual units marginally competitive under some scenarios, but China is facing the same constraint in that regard as its global competitors. Reconciling energy security, environmental regulations, and market rules is simply part of today’s power industry, and a challenge being addressed by generators, regulators—and the courts.
Change is rarely easy, but when it comes to making coal power cleaner, it is becoming possible worldwide. And it is worthwhile—not only for human health but also, as China has figured out, for reasons of economic growth. ■
— Gail Reitenbach, PhD is POWER’s editor (@GailReit, @POWERmagazine).