Weathervane: A Climate Policy Blog from Resources for the Future

Aug26

The President’s Task Force on CCS: It’s Going To Be Pretty Expensive

Six months ago President Obama set up a task force of federal agencies to look into a central issue in the strategy to slow climate change. Technologies exist to capture the carbon dioxide that coal-fired power plants emit into the atmosphere. What’s required, the president asked, to get those technologies deployed rapidly and widely?

The task force has now given him his answer.

“The lack of comprehensive climate change legislation is the key barrier to CCS (carbon capture and sequestration) deployment,” its report said. “Without a carbon price and appropriate financial incentives for new technologies, there is no stable framework for investment in low-carbon technologies such as CCS.”

Nearly half of this country’s electricity is generated by coal, and the resulting smoke contains a third of the country’s total emissions of carbon dioxide. Those two statistics make CCS crucial to any serious attempt to control global warming. But capturing the carbon dioxide and storing it permanently underground is expensive and, the task force makes clear, would have a very substantial impact on electricity prices.

In a paragraph discreetly tucked into an appendix, the task force warned:

“Recent studies conducted by NETL (the National Energy Technology Laboratory) show that current technologies are expensive and energy-intensive, which seriously degrade the overall efficiency of both new and existing coal-fired power plants. For example, installing the current state-of-the-art post-combustion CO2 capture technology --- chemical absorption with an aqueous monoethanolamine (MEA) solution --- is estimated to increase the levelized COE (cost of electricity) by 75 to 80 percent.” That estimate apparently does not include the costs of transporting the gas to the burial site and disposing of it there.

At present power utilities can emit carbon dioxide into the sky without cost. Putting a price on carbon means imposing a tax or fee on those emissions, and setting it high enough to give the utilities an incentive to pump the emissions underground instead.

“Cost estimates for employing current technologies on new and existing fossil energy power plants in terms of cost per tonne of CO2 avoided, range from $60 per tonne for IGCC (integrated gasification combined cycle), $95 per tonne for PC (pulverized coal) to $114 for NGCC (natural gas combined cycle),” the task force reported.

The task force, headed by the Department of Energy and the Environmental Protection Agency, included 14 federal agencies.

“Up to 10 integrated CCS demonstration projects supported by DOE (the Department of Energy) are intended to begin operation by 2016 in the United States,” it told the president.

“Even with financial support,” it said, “challenges such as legal and regulatory uncertainty can hinder the development of CCS projects. Regulatory uncertainty has been widely identified as a barrier to CCS deployment…. Experience gained from regulating and permitting the first five to 10 CCS projects will further inform potential changes to existing requirements and the need for an enhanced regulatory framework for widespread CCS deployment.”

J.W. Anderson is Resources For the Future’s journalist in residence.

Published: Aug-26-10 | 0 Comments

Aug12

The Evolution of FutureGen: Latest Turn in a Long Story

CCS, FutureGen, Obama Administration

On again, off again, and now …

FutureGen first appeared seven years ago as a dramatic proposal to demonstrate technologies that could burn coal without emitting carbon into the atmosphere. After many bumps and halts in the road it reappeared Friday in its latest form, as a proposal to rebuild an existing Illinois power plant. Some of the technology will be less complex, but it will still be designed to capture and sequester some 90 percent of the carbon it emits.

The new concept is less spectacular than the original one, but wiser and more useful. The story of FutureGen has become an illustration of the perils that a government encounters when it tries to push a new technology.

After launching FutureGen with much fanfare in 2003, the Bush administration went through a long site selection process and then, in early 2008, suspended the project entirely. The reason given was the rapid escalation of cost estimates. But there may have been second thoughts on other points as well. The previous year the high-powered MIT Study on the Future of Coal had strongly warned that one project with one technology would have little credibility. It urged the government to support a range of different projects experimenting with varying types of coal, varying generating systems and varying geological formations for the underground storage of carbon dioxide.

But the MIT study also emphasized that the carbon capture and sequestration technology (CCS) was critical to any realistic hope of slowing global warming. Both China and the United States—the two leading sources of the world’s carbon emissions—have massive reserves of coal and steadily rising demands for electric power.

When President Obama took office his administration restarted the planning and design preparations for the FutureGen plant, promising a final decision whether to proceed in early 2010. Instead, last February, the White House announced a task force to develop within six months a plan for the “widespread, cost-effective deployment of CCS within 10 years, with a goal of bringing 5 to 10 commercial demonstration project online by 2016.”

The task force brought out its report on August 12, warning that CCS would be widely deployed only if and when driven by a national policy to reduce greenhouse gases. But on August 5 Energy Secretary Stephen Chu and the senior senator from Illinois, Dick Durbin, announced an award of $1 billion for FutureGen. This time it intends to refit a plant owned by Ameren Energy Resources in Meredosia, Ill., to burn coal with pure oxygen. The resulting carbon dioxide would then be carried by pipeline to the original site of the project, Mattoon, Ill., and injected underground there. The reason for the long pipeline is that much work has already been done in Mattoon to assure that the geology can store the gas safely and permanently.

The Energy Department’s decision to shift from construction of an entirely new plant to retrofitting an older one may well be a response to advice from the MIT group, among others, who reminded the administration that power plants have very long lives. If the administration wanted to have an impact on carbon emissions that is both significant and timely, the MIT scholars emphasized, it would have to demonstrate success in refitting plants that are already in use.

J.W. Anderson is Resources for the Future’s journalist in residence.

Published: Aug-12-10 | 0 Comments

Feb08

Obama Shifts and Speeds up Clean Coal Strategy

CCS, FutureGen, Obama Administration

President Obama set up a federal task force on Feb. 3 to accelerate the development of technologies to capture and store carbon emitted by coal-fired electric utility generators. It looks as though the administration is having second thoughts about a clean-coal strategy that depends crucially on one pilot project, the plant dubbed FutureGen.

The president's memo directed the task force to prepare a plan in 180 days "to overcome the barriers to the widespread, cost-effective deployment of CCS (carbon capture and storage) within 10 years, with a goal of bringing 5 to 10 commercial demonstration projects online by 2016."

That is an extremely ambitious target. The reason for the urgency is that no one has come up with a plausible way to meet this country's growing demand for electricity without continuing to rely heavily on coal. Any progress in slowing climate change consequently depends on finding ways to burn coal without emitting carbon dioxide into the atmosphere.

Responding to that logic, in 2003 President George W. Bush launched FutureGen as a public-private partnership to build a plant that would demonstrate CCS. His administration canceled it in early 2008, on grounds that it would be too expensive. Obama's energy department restarted the planning process last year, promising a final decision early this year on whether to proceed with construction. But there was no mention of FutureGen in the president's recent memo.

The president may be heeding advice from technical experts—offered repeatedly over the past several years— that focusing the whole policy on one experimental plant would be a serious mistake.

"America's Energy Future," a report published last summer by the The National Research Council, warned:

Too little is known at present to determine which power-generation technologies and which storage options could best produce electricity after 2020 if carbon emissions were constrained. Reliable cost and performance data are needed, both for capture and storage, and they can be obtained only by construction and operation of full-scale demonstration facilities... Because of the variety of coal types and the myriad of technology-conversion options for coal, natural gas and biomass fuels, a diverse portfolio of demonstrations of CO2 capture technology will actually be required. Similarly, to sort out storage options and gain experience with their costs, risks, environmental impacts, legal liabilities, and regulatory and management issues, it will be necessary to operate a number of large-scale storage projects in a variety of subsurface settings.

The NRC committee that wrote this report also said that if the country makes an immediate start it should be possible to gain the necessary information and get 10 gigawatts of CCS generation in place by 2020.

The Obama administration is also well aware that CCS projects are already under way in many other countries, notably in Europe and China, and further indecision here risks putting the U.S. at a technological disadvantage.

The president's memo contained a reminder that passage of cap-and-trade legislation, which would put a price on carbon emissions, will be necessary to induce utilities to use CCS technology. "Ultimately," the memo said, "comprehensive energy and climate legislation that puts a cap on carbon pollution will provide the largest incentive for CCS because it will create stable, long-term, market-based incentives to channel private investment in low carbon technologies."

J. W. Anderson is Resources for the Future’s journalist in residence. He previously explored FutureGen in this Weathervane post and this 2008 Weekly Policy Commentary.

Published: Feb-08-10 | 0 Comments

Feb04

Administration Doubles Down on Biofuels, CCS

Biofuels, CCS, EPA, FutureGen, Obama Administration

Striking while the post-State-of-the-Union/budge release iron is hot, President Obama Wednesday unveiled details of his administration’s plans for the next generation of energy technology. With the FY 2011 budget backing loans for the development of nuclear power plants eating up several days of the news cycle, yesterday’s announcement shifted energy and environment watchers’ gaze toward biofuels and carbon capture. From the Environmental Protection Agency’s release:

The EPA has finalized a rule to implement the long-term renewable fuels standard of 36 billion gallons by 2022 established by Congress. The U.S. Department of Agriculture has proposed a rule on the Biomass Crop Assistance Program (BCAP) that would provide financing to increase the conversion of biomass to bioenergy. The President’s Biofuels Interagency Working Group released its first report – Growing America’s Fuel. The report, authored by group co-chairs, Secretaries Vilsack and Chu, and Administrator Jackson, lays out a strategy to advance the development and commercialization of a sustainable biofuels industry to meet or exceed the nation’s biofuels targets.

In addition, President Obama announced a Presidential Memorandum creating an Interagency Task Force on Carbon Capture and Storage to develop a comprehensive and coordinated federal strategy to speed the development and deployment of clean coal technologies. Our nation’s economy will continue to rely on the availability and affordability of domestic coal for decades to meet its energy needs, and these advances are necessary to reduce pollution in the meantime. The President calls for five to ten commercial demonstration projects to be up and running by 2016.

The EPA’s move on biofuels puts the Obama administration in compliance with the Energy Independence and Security Act of 2007 (EISA) but finding the right alchemy of fuels to meet the standard is likely to be a subject of political and logistical debate, not to mention the difficulties in calculating the GHG implications.

As for CCS, yesterday’s announcement regarding the proverbial “clean coal” marks some of the first official murmurs from the White House on the technology since it announced its plans to kick FutureGen back in gear last summer. I’ll be interested to see what the president’s task force can pull together in a 180 days that will put CCS within reach in the next five years.

Tiffany Clements is managing editor of Weathervane.

Published: Feb-04-10 | 0 Comments

Aug24

NRC on America’s Energy Future: Efficiency the Immediate Solution

United States, CCS, Renewables

Image courtesy bunæn via Flickr America can ensure adequate supplies of clean energy only with a “sustained national commitment” begun very soon, an expert committee of the National Research Council warns in a new report.

The fastest and cheapest route to lower energy demand is through wider use of existing technologies to increase efficiency according to the report, “America’s Energy Future.” The full deployment of cost-effective technologies in buildings alone, it said, could eliminate the need for any net increase in electricity generating capacity through 2030.

The country’s present means of generating and using energy are unsustainable over the long term, the committee declared. As world population and economic growth rise competition for fossil fuels is sharpening and markets are increasingly volatile. At the same time, concerns about the effects of burning fossil fuels—notably the acceleration of climate change—are growing.

To protect the climate, the report said, it is possible by 2035 to shift the country’s entire electric generating system to carbon capture and sequestration (CCS) technology, which buries the carbon dioxide underground rather than emitting it into the atmosphere. But that would require an immediate speed-up in demonstrations of CCS technology. And the report noted that CCS would increase the cost of power in the range, it estimated, of 3 to 6 cents per kilowatt hour of electricity. In 2008 the average cost of electricity to a residential consumer was 11.4 cents per kilowatt hour.

Oil will remain indispensable for highway transportation as far ahead as the report could see—to the middle of the century. But, it noted, alternative fuels could begin making significant contributions by the 2030s.

The committee’s chair is Harold T. Shapiro, an economist and former president of Princeton University. The National Research Council published a summary of the report in July. The full text is now available.

John W. Anderson is the journalist in residence at Resources for the Future.

Published: Aug-24-09 | 0 Comments

Jun16

Obama Administration Puts FutureGen Back in Play

Obama Administration, CCS, Coal, FutureGen

Not surprisingly, the Obama administration has revived the planning process for FutureGen, a demonstration project to generate electricity with coal but without carbon emissions into the atmosphere.

Energy Secretary Steven Chu announced late last week a restart of work on engineering design and on a funding plan. He said that he foresees a final decision early next year on whether to proceed with construction. FutureGen is a partnership between the federal government and a consortium of large American and foreign utilities and mining companies, including a Chinese utility. The program was initiated by the Bush administration, which suddenly stopped it early last year on grounds that the cost estimates were excessive.

But it’s not surprising that the present administration has returned to it, for FutureGen represents a solution—and so far the only visible solution—to an urgent dilemma of energy and environmental policy. The United States, like the world generally, relies on coal to generate nearly half of its electricity. But burning coal emits massive amounts of carbon dioxide into the atmosphere, and carbon dioxide contributes to global warming.

FutureGen would construct a coal-burning generating plant in Mattoon, Illinois, to demonstrate the technology, known as carbon capture and sequestration (CCS), to capture the carbon dioxide and seal it permanently underground. The concept is clear in theory but it has never been tried on an industrial scale, and no private company wants to bear the risk of experimenting. Under FutureGen, the government would provide $1 billion already appropriated by Congress in the economic recovery legislation, and the consortium has pledged an additional $400 million.

The idea of developing and demonstrating technology to sequester carbon is widely popular in Congress, where many members acknowledge the need to reduce carbon dioxide emissions but see no way to meet the country’s demand for electricity without coal. The Waxman-Markey bill to slow climate change would set up a permanent Carbon Storage Research Corporation, funded by a charge on burning fossil fuels.

John Anderson is Resources for the Future’s journalist in residence. He previously explored FutureGen in this 2008 Weekly Policy Commentary.

Published: Jun-16-09 | 0 Comments