The Energy Blog

The Beginning of the End for Coal

A post on Earth Policy Institute describes the difficulty power companies are having in getting coal fired power plants approved. There first paragraph sums up the difficulty they are having:

With concerns about climate change mounting, the era of coal-fired electricity generation in the United States may be coming to a close. In early 2007, a U.S. Department of Energy report listed 151 coal-fired power plants in the planning stages in the United States. But during 2007, 59 proposed plants were either refused licenses by state governments or quietly abandoned. In addition, close to 50 coal plants are being contested in the courts, and the remaining plants will likely be challenged when they reach the permitting stage.

The post goes on to outline 18 events that have occurred in the last year that have contributed to this dilemma.  The latest action was the introduction of a bill in the House of Representatives that would block the EPA and states from issuing permits to new coal-fired power plants that lack state-of-the-art carbon capture and storage, CCS, technology. A comment added to this item was: Since this technology is at least a decade away from commercial viability, if this bill passes it would essentially place a near-term moratorium on new coal-fired power plants.

We have an urgent need for more power production and some way of providing this power must be provided. If the bill introduced in house should pass, as proposed, we would be dependent on renewable energy, nuclear power and conservation to provide the power in the near term. Since these options would not be sufficient, we could only hope that this bill would not pass or it would be modified before passage.

I disagree that CCS technology is at least a decade from commercial viability -- I believe that at least one technology will be successfully demonstrated in 5-7 years. We have at least four CCS technologies in the testing stage and I would propose that coal fired power plants be allowed to be built, 1) under more stringent conditions that the power is needed, 2) that they be located where carbon sequestration can take place and 3) that they be built so that the emerging CCS technologies can be easily adapted to the plant. Their are two ammonia based systems and two amine based systems that I am aware of. It may be necessary to pick one of these technologies or it may be possible to provide (perhaps massive) piping connections that would allow any process to be connected.

While many will say that conservation of electricity is the answer, it is only part of the solution. It will take many years before a structured plan could be put in place.  It may be possible that certain industries could be found where conservation could be mandated, if that can be done constitutionally. Higher prices for electricity may end up being the the greatest force causing conservation. Practices that reduce electrical consumption in the home have been written about by many and these should receive more widespread availability. A simple search on your favorite search engine using the search words "home electricity efficiency" brings up several sources including this one, How to Save Electricity in Your Home from the Edison Electric Institute.

Nuclear and Renewable energy simply cannot be brought up to speed fast enough to meet all our needs, although I think they should be accelerated as fast as possible.  Incentives for renewables should be maintained until the industries are fully sustainable. Geothermal energy has become my favorite renewable energy because it is a baseload power provider, and with new, hot dry rock, HDR, technology can be located in almost all areas of the world, as such it should receive much more funding for demonstration plants from the government. At least four geothermal projects, two funded by DOE and one in France and one in Germany using HDR technology are already underway. Although a large number of HDR plants could be built with existing technology, it might take 10 or 15 years before this technology can be applied universally.

An exception could be made on my, and the US governments, stand that only a few generation III+ nuclear plants can be be built until they have demonstrated that they can operated safely.  If it could be shown that the AP1000 and AREVA plants, and any other that meet US criteria, have been safely and successfully operated in a foreign country, the requirement for operation in the US could be waived.

Chilled Ammonia Carbon Capture Process to be Demonstrated

A pilot plant that uses chilled ammonia to capture carbon dioxide (CO2) from coal-fueled power plants was launched by Alstom, the Electric Power Research Institute (EPRI) and We Energies, at We Energies’ Pleasant Prairie Power Plant in Wisconsin. Alstom designed, constructed and will operate the 1.7 MW system that captures CO2 from a portion of coal-fired boiler flue gas at the power plant, a 1,224 MW coal-fired generating station.

Alstom’s process uses chilled ammonia to capture CO2 and isolates it in a highly concentrated, high-pressure form. In laboratory testing it has demonstrated the potential to capture more than 90 percent of CO2 at a cost that is far less than other carbon capture technologies. Once captured, the CO2 can be used commercially or sequestered in suitable underground geologic sites.

“Developing cost-effective carbon capture technology is one of the most important environmental challenges facing the utility industry in the 21st century and it’s important that we take steps now to achieve a long-term technology solution”

-- Gale Klappa, Chairman, President and CEO of Wisconsin Energy, parent company of We Energies

This process sounds like one that could be fairly easily integrated into existing power plants and lead the way towards the government requiring carbon capture and sequestration (CCS) at all coal fired power plants.  Note that this project is being done with no government financing. Other technologies that are being developed and that have been reported on by TEB, include: ones using ZIFs, sodium hydroxide, or amine based solvents, another, I believe ambient temperature ammonia system, algae systems, and an e.coli system.  These processes are aimed at conventional coal fired plants.  IGCC and Oxyfuel plants isolate the CO2 as part of the processes so carbon capture is a much simpler process, but these plants cost more than conventional coal plants.  There is disagreement whether conventional plants with CCS or IGCC plants with just sequestration are the most economical and which plants will dominate the industry in the future.  In any case there is a huge number of existing conventional coal plants that need CCS, once legislation is passed requiring it.

Bank of America to Assess Cost of Carbon on Loans to Utility Companies

The banking industry is taking an increasing interest in green energy and carbon emissions, in lieu of the Federal government not taking any action. Because of this failing, the Bank of America has decided to start assessing the cost of carbon in their risk and underwriting processes for loans to power companies, currently estimating the cost of carbon will fall between $20-$40 per ton of carbon dioxide, anticipating that either a carbon tax will be assessed in the future or that CCS will be required at some point. This follows the establishment of the Carbon Principles, which established guidelines for banks to use in considering the risk factors in making loans to power companies, as announced by a consortium of banks on Feb. 4.

This action effectively acts as a carbon tax and will raise the cost of electricity from power plants emitting carbon to a cost that will give renewable energy a fairer playing field.  This action could increase the spread between the cost of electricity made from nuclear power and coal power, considering that nuclear does not produce any carbon due to the operation of their plants. While I support Gen III+ nuclear (the next generation of nuclear plants), I also believe that the direct and indirect subsidies that the government gives nuclear plants should be eliminated (not much chance of this happening though), which would probably bring coal plants with CCS back into more favorable economics as compared to nuclear.

This action should help clear up the logjam that has been developing regarding construction of new coal fired plants. Because the procedures for approval of Gen III+ plants have not been ironed out, it will still take an extended period to get the first few of these on line. Also the nuclear industry has said that it will not build additional plants until the first 6-8 of these plants are in operation. Thus coal plants will probably start being built again in the not to distant future.  Wind power is near the point where their manufacturing capacity is significant and this should keep their growth rate growing strong.  Solar has many years (5-7) before their capacity could reasonably be expected to be significant and their costs reduced, so the immediate impact on them is nil -- still waiting for more silicon capacity and thin-film technologies to be more developed. However these factors have not kept solar from growing at a high pace.   

In a speech at the Feb. 12 North Carolina Issues Forum Ken Lewis, Chairman and Chief Executive Officer, Bank of America made the following statements outlining his banks position on this subject: 

Plans for Coal-to-Liquids Facility Announced

Fuel Frontiers, Inc. (FFI), a wholly owned subsidiary of Nuclear Solutions, Inc. (OTC:NSOL), announced that it is working with Shaw Stone & Webster (Shaw) to launch an engineering program that will provide a technical basis for a 400 Tonne per day Coal-To-Liquid (CTL) Ultra-Clean Diesel fuel production facility in Muhlenberg County, Kentucky.

FFI is planning to employ a commercially proven plasma gasification system designed by Westinghouse Plasma Corporation (WPC) coupled to commercially available Fischer-Tropsch (FT) gas-to-liquids (GTL) diesel fuel production systems, to be designed and constructed by Shaw for its coal to ultra-clean diesel production facilities.

The WPC website states that "in the plasma gasification process CO₂ can be captured and sequestered." Unless this option is selected I could not support the building of this facility. In this day and age I would think that if a process did not release any CO₂ it would be mentioned in the press release.  I would hope that vehicles with better mileage, plug-in hybrids, electric vehicle and biofuels could be developed to the extent necessary to minimize our liquid fuel needs.  On the other hand, if a coal-to-liquids plant could be built with no CO₂ emissions, that competes economically with other sources of liquid fuels, it could be another resource to add too the mix.

FutureGen Scrapped, CCS to be Demonstrated on Multiple Clean Coal Power Plants

From a DOE announcement:

DOE announced a restructured approach to its FutureGen project that aims to demonstrate cutting-edge carbon capture and storage (CCS) technology at multiple commercial-scale Integrated Gasification Combined Cycle (IGCC) clean coal power plants.

Under this strategy, the U.S. Department of Energy (DOE) will join industry in its efforts to build IGCC plants by providing funding for the addition of CCS technology to multiple plants that will be operational by 2015.  This approach builds on technological research and development advancements in IGCC and CCS technology achieved over the past five years and is expected to at least double the amount of carbon dioxide sequestered compared to the concept announced in 2003.  . . .

The Department today issued a Request for Information (RFI) that seeks industry’s input by March 3, 2008, on the costs and feasibility associated with building clean coal facilities that achieve the intended goals of FutureGen.  Following this period and consideration of industry comment, DOE intends to issue a Funding Opportunity Announcement – or competitive solicitation – to provide federal funding under cooperative agreements to equip IGCC (or other clean coal technology) commercial power plants that generate at least 300 megawatts, with CCS technology aimed at accelerating near-term technology deployment.  . . .

Under this plan, DOE’s investment would provide funding for no more than the CCS component of the power plant – not the entire plant construction, compared with the FutureGen concept announced in 2003 where the federal government would incur 74% of rising costs.  This would allow for commercial operation of IGCC power plants equipped with CCS technology to begin as soon as the plants are commissioned, between 2015 and 2016.  . . .

The four sites – two in Illinois and two in Texas – evaluated in the Department’s Environmental Impact Statement issued in November 2007, including the site announced by the FutureGen Alliance in December 2007, Mattoon, IL, may be eligible to host a commercial-scale IGCC plant with CCS technology.

I think this approach is much better than the original, provided it does not delay the demonstration of CCS and the following legislation to require CCS, or equivalent technology, on future coal fired plants.

Crude Reserves in US Decline, Natural Gas Reserves Increase

U.S. crude oil proved reserves declined 4 percent in 2006, while natural gas reserves increased by 3% according to estimates released by the Energy Information Administration

The Gulf of Mexico Federal Offshore and Alaska, two of the largest oil producing areas, respectively reported 10 and 7 percent declines in crude oil proved reserves. This was due to downward revisions and fewer new discoveries. Utah reported the largest increase in crude oil proved reserves, adding 78 million barrels (a 30 percent increase from 2005), followed by Colorado and New Mexico. 

Domestic crude oil production declined 5 percent in 2006 due mostly to lower production in Alaska. Part of the decline resulted from an August 2006 shut-in of producing wells in half of the Prudhoe Bay Field for inspection and repair of corrosion in the gathering system. For the second year in a row Montana had the largest annual oil production increase of any state (6 million barrels; a 20 percent increase) owing to continued development of the Bakken Formation in the Elm Coulee Field. This relatively new and important oil field is difficult to produce and requires cutting-edge technology for economic production.

U.S. natural gas proved reserves increased 3 percent in 2006, rising to over 211 trillion cubic feet, the highest level since 1976. Additions to reserves replaced 136 percent of the dry natural gas produced in 2006. This was the eighth year in a row that U.S. natural gas proved reserves have increased.

Total U.S. natural gas production increased in 2006 due to production increases in Texas (Barnett Shale), Louisiana, and the Rocky Mountain states (Colorado, Wyoming, Utah, and Montana). Gulf of Mexico natural gas production declined the most with a 6 percent drop.

Advance Summary: U.S. Crude Oil, Natural Gas, and Natural Gas Liquids Reserves 2006 Annual Report is available on the EIA Internet site at:
http://www.eia.doe.gov/pub/oil_gas/natural_gas/data_publications/advanced_summary/current/adsum.pdf

An Inconvenient, Dirty Truth About Cheap and Plentiful Coal

This column from the Canadian Globe and Mall gives the writers opinion of the role coal will play in our future energy needs. For those of you that thought renewable energy, conservation and perhaps a new fleet of nuclear reactors were going to save our climate, this article gives a rather dismal picture.    

If you want to make money and don't mind spitting up black phlegm and destroying the planet, buy coal. While the energy markets and the media are obsessed with rising oil prices, the developing world is quietly gearing up for a coal development and consumption spree of astounding proportions. The energy markets of tomorrow are not about oil and hydrogen and wind turbines spinning lazily on ridges. They're about coal, which is cheap and plentiful but also the worst news for the environment that you could imagine in the post-Al Gore world.

The investor case for coal is hard to beat.  . . .

In a gas-fired plant, 3 per cent to 4 per cent by volume of the flue gases flung into the atmosphere are carbon dioxide. The figure in a coal plant is 15 per cent. No wonder the IEA predicts coal's share of global carbon dioxide emissions will rise from 38 per cent in 2000 to 45 per cent in 2030.  .  .  .

In fact, no large coal plant anywhere on the planet uses carbon capture. The technology is said to be coming but you can bet it won't arrive quickly. Designing and building a plant that uses carbon capture can add 50 per cent to the capital costs.  . . . more

Thanks to Tyler of Clean Break for the tip.

Gore Nightmare Wins as Europe Pays to Ship U.S. Coal

Bloomberg has current article on the worlds love affair with coal:

Gore, said that ago the U.S. should adopt a "complete moratorium on new coal-fed power plants unless all of the carbon dioxide from them can be buried underground." . . .

A ton of U.S. coal is so cheap at about $47 that European utilities will pay $50 to ship it across the Atlantic, according to Galbraith's Ltd., a 263-year-old London shipbroker. While oil and coal cost the same as recently as 1998, West Texas Intermediate crude is five times more expensive after climbing to a record $96.24 on Nov. 1. . . .

"Coal is by far the cheapest fuel because there's no price on how much damage it causes,'' said John Holdren, a Harvard University professor of environmental science and director of the Woods Hole Research Center in Falmouth, Massachusetts.  . . .  more.

Gores statement agrees with the position that I have, I hope my position wasn't influence by Gore.

Kansas Turns Down Coal Power Plant Because of CO2 Emissions

An article in the Washington Post reports, on what could be a major decision in the fight against global warming, that the Kansas Department of Health and Environment became the first government agency in the United States to cite carbon dioxide emissions as the reason for rejecting an air permit for a proposed coal-fired electricity generating plant, saying that the greenhouse gas threatens public health and the environment. . . .

It may be the first of a series of similar state actions inspired by a Supreme Court decision in April that asserted that greenhouse gases such as carbon dioxide should be considered pollutants under the Clean Air Act. . . . more

Update, 12:34 am:

This is not the only coal plant in trouble, as this article in the Austin American Statemen reports:  At least 16 coal-fired power plant proposals nationwide have been scrapped in recent months and more than three dozen have been delayed as utilities face increasing pressure due to concerns over global warming and rising construction costs. . . . more

Update, 1:48 am:

In Energy and Capital Jeff Siegel wrote: This past Tuesday, American Electric Power Company agreed to a $4.6 billion settlement over pollution controls at its power plants. The company will also have to shell out $15 million in civil penalties and $60 million in cleanup and mitigation costs. . . . more

If this precedent is followed, and it will be cited by environmentalists in future applications for air quality permits for future coal powered power plants, we may not need additional legislation to require carbon capture and sequestration, unless a law is passed exempting carbon dioxide from the provisions of the Clean Air Act.  The later would be a very unpopular law with citizens and, I believe, from Democrats and without much support from Republicans in an election year.  Until this is straighted out in appeals courts, it looks like a big win for nuclear power and renewables as utilities will be less willing to take a chance on coal powered power plants. This will also be a big boon for wind power and thermal solar in the near future, until PV solar becomes more competitive. The fact is that coal power is getting more expensive as many other sources are becoming less expensive.

Coal Power Limited in California

The Los Angeles Times reported that the state of California  had acted to limit use of coal power. The California Energy Commission on Wednesday imposed new rules that effectively forbid the Los Angeles Department of Water and Power and all other municipal utilities in the state from signing new contracts with coal-fired power plants.

California has largely phased out coal-fired generators within its borders, but the state still buys about 20% of its electricity from coal-fueled power plants in other states.

The maximum emissions allowed under the new rules are 1,100 pounds of carbon dioxide per megawatt hour of electricity. This rule would, in effect, require coal-fired power plants to use sequestration technology that would pipe carbon dioxide into underground repositories in order to keep selling power to California.

This is one way to make power plants minimize their CO2 emissions.  A rather drastic step that could not be carried out nationwide. I would be in favor of a law that would require all new plants to sequester their CO2 and existing plants to employ sequestration over a period of years. California gets most of their power from other sources and the impact of this rule will be to encourage more renewable power generation which would not be practical in other parts of the country that, on the average, get 50% of their electricity from coal power plants.