HOUSTON -- As the development of new coal-fired power plants is slowing amid growing opposition, utility executives say development of carbon capture-and-storage technologies will play a major role in the industry's long-term viability.
"We have to be able to advance that technology for future coal plants to be built," said Nick Akins, the executive vice president for generation at utility giant American Electric Power Co. Inc., which relies heavily on coal. "We have to answer the carbon capture and storage equation to keep coal in the picture."
Coal accounts for half of U.S. electricity production and roughly 85 percent of the power sector's greenhouse gas emissions. And while no one knows when large-scale underground carbon storage will be available, policymakers who want to curb U.S. greenhouse gas emissions are ascendant in Washington -- most notably President Obama, who has called for a cap-and-trade plan to reduce U.S. emissions.
Getting a handle on carbon capture and storage (CCS) technology is one of the great energy challenges, said Ernest Moniz, director of the Massachusetts Institute of Technology's Energy Initiative.
"We need to develop, in my view, an understanding about the real capability for carbon sequestration," Moniz told the annual Cambridge Energy Research Associates (CERA) conference here last night. "We have no serious projects going on today, and it will take some time to develop the scientific understanding of long-term cumulative injections and certainty to develop the regulatory structures to permit the private sector to go forward."
The economic stimulus package that Congress hopes to send to the White House this week is expected to include billions for research and development of CCS, but details on the $790 billion measure hashed out yesterday by House and Senate negotiators are still not available.
Dan Reicher, Google's director of climate and energy initiatives and an adviser to Obama's campaign on energy issues, said gaining clarity on CCS is vital. "The role of carbon capture and storage is a big question mark right now. How quickly it can become commercially viable?" he said in a short interview yesterday. "It is important that we get some greater sense -- yes or no -- whether ... CCS is really going to work."
Robert LaCount Jr., CERA's senior director for climate change and clean energy, said that even under the best-case scenario, it is difficult to see commercial carbon-storage deployment getting rolling before 2020. "That's to get a green light for the industry to say, 'Let's take this and begin investing in a big way,'" he said.
An "aggressive" case would show CCS applied to 55 gigawatts' worth of U.S. coal-fired generation in 2030, he said. Current U.S. coal capacity is 320 gigawatts.
Carbon capture and storage's role in a future climate regime will depend on the price of carbon, LaCount said. CERA's analysis shows that a CO2 price of $60 per ton would spur a 22 percent reduction in power-sector emissions in 2030, while a $100 per ton price generates a 60 percent reduction.
"It is really not until we even get to this $100-per-ton case that you see that dramatic kinds of change of reductions that are being discussed in some of these bills," LaCount said.
In the 2030 time frame, efficiency and demand moderation play the largest roles, he said, while other reductions come from the deployment of nuclear power and a suite of other technologies, including various forms of renewable power and CCS. With carbon at $100 per ton, he said, CCS plays the third-largest role -- a role that would grow larger in the future.
Environmental groups and some state officials have stepped up their opposition to the construction of new coal plants, and the financial crunch has also affected the power sector's plans. More than $65 billion worth of coal projects were canceled in 2007 and 2008, said Larry Nettles, a partner with Vinson and Elkins who works on energy.
Utility executives are cautioning against stopping the development of new coal plants, saying CCS technology would be developed later.
Paul Newton of Duke Energy Corp. touted the integrated gasification combined cycle (IGCC) power plant his company is building in Edwardsport, Ind., as a bridge toward carbon controls. He noted that the plant could be equipped with carbon capture and that the company is studying geologic storage there. He said that plant and another coal plant his company is building will enable the retirement of older, less efficient plants.
"I would love it if someday our opponents would recognize that value," Newton said yesterday. Both projects are slated to come online in 2012.
Akins, meanwhile, said his company is pushing ahead with a project that will trap and store a small percentage of the emissions from its 1,300-megawatt Mountaineer plant in West Virginia.
'New political reality'
Coal has serious hurdles to cross if environmental worries move to the forefront of public concern as the battered economy begins to recover.
"The truth is that we all know there many environmental challenges associated with mining and burning coal," Fred Krupp, president of the Environmental Defense Fund (EDF), told industry executives today.
EDF agrees that massive research and development funding for CCS from government and the private sector is essential if there is to be any hope for the technology's widespread deployment. But far more important for future CCS development, Krupp said, is greenhouse gas legislation that creates a robust market for carbon emissions avoidance.
"I became convinced that we're not really going to get CCS into the marketplace until we have a private market demand for it," Krupp said. "And that's why its so important, in my view, to put a declining cap on carbon emissions."
Despite the bumpy road ahead for CCS, Krupp encouraged companies to be optimistic. The ubiquitous nature of coal in America's energy grid means CCS will probably be key to achieving major cuts in greenhouse gas emissions, he said, and his experience working closely with the private sector on these and other difficult environmental issues leads him to believe that the U.S. can achieve even the transition.
In particular, Krupp spoke of this involvement with the U.S. Climate Action Partnership, or U.S. CAP, a coalition of environmentalists and corporations that last month issued a blueprint outlining how federal legislation could be drafted to achieve greenhouse gas emission reductions throughout the economy. Krupp noted that U.S. CAP's membership includes representatives from several industries with heavy emissions, including coal-mining companies.
The U.S. CAP initiative, which calls for an 80 percent cut in heat-trapping emissions by 2050, is "part of new political reality, center of gravity, that says we are going to go forward with a cap-and-trade plan," Krupp said.
Even though the ongoing global financial crisis has diverted business and public attention elsewhere, Krupp insisted that enough momentum toward cap-and-trade legislation has built up that it is highly likely that Congress will move forward with climate legislation this year, meaning coal-burning industries need to prepare for the coming changes.
From talks that U.S. CAP has had with the White House, Krupp said, it is clear that the Obama administration and many in Congress also see a new climate bill as another critical component to reviving the economy.
If done right, he said, climate legislation could spur a wave of commercial activity akin to Thomas Edison's commercialization of electric light more than a century ago.
"This new challenge of generating electricity as we reduce greenhouse gas emissions will generate a similar wave of innovation and profits," Krupp said.
Reprinted from Greenwire with permission from Environment & Energy Publishing, LLC. www.eenews.net, 202-628-6500