Coal’s Evolution

October 26, 2009

Ken Silverstein, EnergyBiz Insider
Editor-in-Chief

Coal is at a fork in the road. If it is to remain relevant, then the industry must work to commercialize advanced technologies that can scrub the carbon and bury the residue.

Progressives, who now dominate the Congress, are more inclined to set limits on emissions and thereby give vendors the assurances they need to take risks and bring critical products to market. That approach, however, runs counter to conservative thinking that says that industry cannot comply with such laws if the technologies to bring about change do not yet exist.

It's the classic chicken-and-egg scenario. But collaboration is central -- a strategy whereby government funds the preponderance of research and development in the early stages while industry carries the burden in the latter phases. The goal is to reduce the time it would otherwise take for instrumental technologies to get to market.

"It is a given that through legislation or regulation, industry will be forced to reduce its carbon emissions," says Michael Mudd, chief executive of the FutureGen Alliance in Columbus, Ohio. "Policy and technology must remain in alignment, which is not now the case. If government sets the rules and expects industry to follow, it may take 25 years to get from concept to commercialization. But if you wait for the technologies to develop, then industry will not have the motivation."

Consider the Waxman-Markey bill, which has passed the House and which requires 17 percent reductions in carbon emissions by 2020 and 80 percent by 2050, all from 2005 levels: According to the U.S. Energy Information Administration, 1.3 million short tons of coal are expected be consumed in 2030 with current rules. But that number would fall to 700 million short tons under the House's measure.

While the bill funds modern coal technologies, progressives reason that generators will switch to cleaner fuels. The Energy Information Administration does say that it expects nuclear and renewable energy to be the major benefactor, as well as energy efficiency.

But conservatives note that the nuclear industry is in a regulatory quagmire while renewable power will not soon be able to supplant fossil fuel usage. In referencing the information agency's report, they say the added constraints on coal would force prices up by roughly 2 cents, from roughly 10 cents a kilowatt-hour to about 12 cents a kilowatt-hour by 2030. At the time, they point out that the agency is predicting that gross economic output would grow during this time 0.8 percent less than otherwise.

"Our analysis says there are economic costs to the bill but that they are not devastating," says Scott Sitzer, with the energy agency's office of coal, nuclear, electric and alternate fuels. "The cost would come in the form of having to buy carbon allowances and from switching to nuclear and renewables."

Multiple Fronts

The thinking among political analysts is that while the pending Senate measure is similar to the House bill, any ultimate legislation will be watered down. That's because key Democratic senators represent the Southeast and the Midwest where coal is integral to their respective economies. Therefore, if any measure is to survive stall tactics in that chamber, allowances will be made.

Possible concessions: Look for more funding when it comes to retrofitting current coal generators with modern technologies. Or, expect compromises in the methods by which carbon credits are distributed -- a process that could give them away for longer periods to those businesses that would be the most adversely affected.

Older, pulverized coal-fired plants are the least efficient units with about 35 percent of the energy input converted to electricity. But as more power generators opt for supercritical units with higher water-side operating pressures the efficiencies associated with pulverized coal units can increase to at least 40 percent. In the works: ultra-supercritical facilities are said to have efficiency rates of 50 percent or more.

If coal gasification is used, the efficiencies would reach as high as 60 percent. Coal gasification removes the sulfur dioxide, mercury and carbon dioxide from the "syngas" before it is combusted. And because the "syngas" is cleaner than raw coal, lower quantities of nitrogen oxide and particulate matter are produced during the combustion or burning process. The carbon is more concentrated, which makes it easier to capture. Four such plants are operating now: two in the United States and two in Europe.

FutureGen, which could break ground in 2011 and become operational in 2014, would be a 275-megawatt coal gasification facility that could capture about 90 percent of all carbon emissions. American Electric Power, meantime, is testing a much smaller coal facility in West Virginia to see if carbon can be captured and buried on site while it is also building the first-ever ultra-supercritical coal facility in Arkansas that it says will use less coal.

All the potential developments come with a price tag. But if fewer tonnages of coal are burned, the economic and environmental values will add up and become clearer.

"Gasification has been around for some time," says John Mead, director of the coal research center for Southern Illinois University. "But incremental improvements can make the technology more attractive to industries that use conventional processes. However, ultra-supercritical coal generation can rival coal gasification in power generation applications. We need to move on multiple fronts. From a planning standpoint, government and industry must collaborate."

Coal-fired generation will change. Government mandates along with the emergence of modern technologies will work in tandem to improve efficiencies. The evolution is not just necessary to meet the challenges of a carbon-constrained world. It is also essential to coal's future, if it wants to remain a significant part of the global energy mix.

More information is available from Energy Central:

• EnergyBiz Leadership Series On-demand Webcast: The Future of Coal

• A Model for Coal Generation, EnergyBiz, Jan/Feb 2009

• Underground Treasure - Coal Gasification Revisited, EnergyBiz, Nov/Dec 2008