Abby L. Harvey
GHG Monitor
1/30/2015
The treatment of coal amid growing concern over climate change is problematic for the advancement of carbon capture and storage technology, industry experts said during this week’s National Conference and Global Forum on Science, Policy and Environment. Experts noted perception issues that could hinder the technology’s advancement, such as CCS being categorized with fossil fuels instead of with clean energy technology in price comparisons and the misperception that CCS is a technology whose use is limited to the coal industry. “CCS isn’t just about coal. It’s not just about electricity. It applies to natural gas as well as to coal. It applies to paper mills, ethanol manufacturing … steel plants. This technology and this process — really a combination of technologies — is really something that’s about climate change,” Sarah Forbes, senior associate with the World Resource Institute, said during the conference.
Throughout the conference, discussions regarding CCS often focused on rationalizing the cost of the technology, which has been a hindrance to getting it to a point of commercial viability. “We need to invest in large demonstration projects. Unfortunately each of those cost about $2 billion so those kinds of investments don’t come easy,” said Julio Friedmann, Deputy Assistant Secretary of Energy for Clean Coal. “In my shop, we’re focused not only on that, but also on the precursor. Before you can field a 300 megawatt unit you have field something in the 20-50 megawatt scale, and that’s where most technologies go to die,” he said.
Jim Wood, Director of the U.S.-China Clean Energy Research Center (CERC), explained that cost overruns at U.S. clean coal projects are detrimental to creating a secure market for the deployment of the technology. Wood explained that “the industry gasp that occurred from cost overruns at Duke Energy’s Edwardsport and Southern Company’s Kemper,” would be hard to overcome. “Both projects are sponsored by experienced electric utilities with strong balance sheets, with competent managers and each is seriously over budget, each faces regulator and probably investor scrutiny,” he said. The Kemper project, which employs a CCS component, has more than doubled its projected costs and has been delayed several times. The plant is now expected to reach full operation in 2016. The Edwardsport project, a 618 MW integrated gasification combined cycle plant operated by Duke Energy in Indiana, came on-line in June 2013, $1.5 billion over budget.
Costs of CCS Should be Compared with Costs of Other Clean Energy
However, Forbes said, comparing CCS projects to non-CCS coal plants is not an accurate way to assess the cost of the technology. CCS on energy generation should instead be compared to the cost of other low- and no- carbon energy generation technologies, Forbes suggested. “We often talk about the high cost of CCS, the fact that it costs more to do CCS than it does to run a typical coal-fired power plant, but that’s actually the wrong frame of reference. CCS needs to be compared with other types of clean energy. … In certain markets, solar and wind are at price parity with conventional fossil, but that’s not true for all renewables and that’s not true for all markets. We need to be shifting our framework when we talk about CCS and when we talk about the cost to thinking about it alongside other clean energy,” Forbes said.
Speaking earlier in the conference, Friedmann also alluded to this idea when discussing the Boundary Dam CCS project, which began full operation in Saskatchewan in October 2014. SaskPower, the utility responsible for the project, had considered other forms of low carbon energy generation but for them, CCS was the most economically feasible. “For many parts of the economy this is the one that’s the cheapest option. If you take it off you have to replace it with something more expensive. This was the case in Canada,” Friedmann said.
Shift to Natural Gas Does Not Negate Need for CCS
The United States has significantly increased its use of natural gas for electricity generation, many panelists pointed out. Natural gas emits less CO2 and is currently an inexpensive fuel. However, Friedmann noted, if the world is going to avoid the globally agreed upon two degree limit in global temperature rise, CCS is eventually going to have to be installed on natural gas plants as well. “My research portfolio was conceived in a world of abundant coal and dwindling natural gas supplies, not so much the case these days. The flip side of that is the abundant low cost natural gas … also means we’re about to lock in a whole generation of gas infrastructure,” Friedmann said. “We’re going to build gas-fired power plants. We’re going to build gas pipelines and for the right reasons we’re going to be doing these things. That actually doesn’t get us out of our climate problem. In fact, one of the things that I draw a certain amount of joy from is almost everything that we do in the coal program also has application to natural gas capture.”
