Solving the Coal Conundrum

A recent U.S. Government Accountability Office (GAO) report examines two key options for reducing carbon dioxide (CO2) emissions from coal-fired power plants. The first is horribly expensive and will be years in the making. The second is blocked by current regulations in the U.S.

The GAO report “Opportunities Exist for DOE to Provide Better Information on the Maturity of Key Technologies to Reduce Carbon Emissions,” released in June, provides an even-handed overview of the status of carbon capture and sequestration (CCS) technology and deployment. In sum, the GAO report finds that “Commercial deployment of CCS within 10 to 15 years is possible… but is contingent on overcoming a variety of economic, technical, and legal challenges.” According to the report, the cost to install post-combustion technologies was estimated by the Department of Energy (DOE) in 2007 as 85% higher when compared to plants without CCS, and parasitic load is estimated to be between 21% and 32% of plant output. The report also notes that there is only one pilot project currently in operation that is capturing CO2 from a coal-fired plant and sequestering the gas in geologic formations.

Looking for Funding

The report suggests that solving the technical and economic challenges is possible but is contingent on substantial government funding during the next decade or two. However, the report’s authors assumed that the research and development dollars would come from the sale of cap-and-trade allowances that were provisions of many recent legislative proposals. As noted in last month’s editorial, I believe the chances of the Senate enacting any form of cap-and-trade legislation in the near future are negligible. Without this source of funds, the report’s assumed 10-to-15-year estimate for commercialization seems optimistic.

However, the limiting factors to commercialization don’t lie completely with the technology development status; they also include institutional limitations. The report notes that “the lack of a regulatory framework to govern the permanent storage of large amounts of CO2 in saline formations and legal uncertainty regarding long-term liability for the storage of CO2” are challenges as significant as those related to the technology development. Without the government assuming this liability, no plant operator will be willing to assume that risk. The report also notes that the immaturity of the technology means regulators are unlikely to approve cost recovery of projects and that CCS will significantly increase water consumption at power plants. There is no discussion about the project cost impact of the increased auxiliary power.

Energy Efficiency Evaluated

The other option investigated by the GAO to reduce CO2 in the short term is improved energy efficiency at coal-fired power plants. The report notes the huge reduction in CO2 emissions possible with improved efficiency of operations at existing coal-fired plants: “DOE has estimated that efficiency improvements to the existing coal fleet could reduce CO2 emissions by 100 million tons annually, or about a 5 to 10 percent reduction in overall emissions from these plants.”

Though true, the conclusions reached by the GAO are not helpful, because the solution is impossible to implement. The moment an energy efficiency project begins, the Department of Justice will slap the plant owner with a New Source Review (NSR) lawsuit. Today, NSR lawsuits dating back to the Clinton administration are still pending against utilities for plant improvements made in good faith. The report mentions the potential for NSR violations when pursuing plant efficiency improvements, but only in passing.

Self-Inflicted Wounds

The irony is that there is overwhelming pent-up demand to invest in efficiency improvements at existing coal-fired plants that would provide immediate reductions in carbon emissions and significant increases in production efficiency, without waiting decades for CCS. Nibbling at the edges are some forward-thinking utilities that have shut down older, less-efficient coal-fired plants in order to obtain permission to construct a modern, much higher efficiency coal-fired plant. Unfortunately, the institutional barriers to those projects are almost insurmountable these days.

The report does note that the latest ultrasupercritical coal-fired power plants can reduce CO2 emissions by 33% relative to the average coal plant but fails to identify successful examples. To read about the exemplar of efficiency and emissions reduction gained through modern coal-fired plant design, turn to page 40. At its Isogo plant, J-POWER replaced two older coal-fired plants totaling 600 MW with two 600-MW ultrasupercritical units on the same site. The result is much higher efficiency, air emissions on par with those from a gas-fired combined-cycle plant, and significantly reduced carbon emissions.

Instead of investing in technology to capture carbon and hide it under the rug, utilities should be encouraged to invest in the most efficient and lowest emission power generation facilities using a domestic fuel. The replacement programs used by J-POWER at Isogo could also be a huge success in the U.S. However, it would require a much more forward-thinking regulatory milieu than the one we have today.

Dr. Robert Peltier, PE, is POWER’s editor-in-chief.