Tuesday, February 17, 2009

Is America ready to quit coal?

The New York Times asks if the US is ready to quit coal.

Last May, protesters took over James E. Rogers’s front lawn in Charlotte, N.C., unfurling banners declaring “No new coal” and erecting a makeshift “green power plant” — which, they said in a press release, was fueled by “the previously unexplored energy source known as hot air, which has been found in large concentrations” at his home.

And so it goes for Mr. Rogers, the chief executive of Duke Energy. For three years, environmentalists have been battling to stop his company from building a large coal-fired power plant in southwestern North Carolina. They say it will spew six million tons of carbon dioxide into the atmosphere annually, in addition to producing toxic gases and mountains of fly ash similar to the muck that engulfed a Tennessee community recently.


With concerns over climate change intensifying, electricity generation from coal, once reliably cheap, looks increasingly expensive in the face of the all-but-certain prospect of regulations that would impose significant costs on companies that emit large amounts of carbon dioxide and other greenhouse gases.

As a result, utilities’ plans for new coal plants are being turned down left and right. In the last two-and-a-half years, plans for 83 plants in the United States have either been voluntarily withdrawn or denied permits by state regulators. The roughly 600 coal-fired power plants in the United States are responsible for almost one-third of the country’s total carbon emissions, but they are distinctly at odds with a growing outlook that embraces clean energy.


“If you care about being a leader on solving global warming problems, you don’t build new coal plants, especially ones that don’t have a way to capture carbon,” said Stephen A. Smith, executive director of the Southeastern Alliance for Clean Energy. (Mr. Smith’s group was not involved in the decorating of the Duke executive’s lawn. That was the handiwork of a small group called Rising Tide, in Asheville.)

This green chorus also includes Al Gore, the former vice president, Eric E. Schmidt, the chief executive of Google, and Harry Reid, the Senate majority leader, who has called for a moratorium on new coal plants.

Mr. Reid and other Democratic leaders in Congress, emboldened by support from the Obama administration, have promised climate change legislation by the end of the year. While the exact outlines are yet to be determined, lawmakers are discussing plans to force companies to reduce carbon emissions or be required to pay some form of penalty.

Some conservatives in Congress, and the coal industry itself, say the clean energy push is an affordable luxury — and a pet cause — for people in states that don’t have to rely primarily on coal to produce electricity.

“The costs for those customers in the heartland who get more of their electricity from coal, not only residential but commercial customers, could be significantly higher, at a time when we can least afford it,” says Jim Owen, spokesman for the Edison Electric Institute, which represents electric utilities. “So we want to make sure that a climate change program is properly designed.”

Moreover, getting more and more of our energy from squeaky-clean sources like wind, solar and biomass sounds like a great idea, but whether renewables can keep the lights on and our iPods charged remains an open question.

THE coal industry is aware of all of these issues and is fighting back. An industry-financed group called the American Coalition for Clean Coal Electricity spent $38 million last year informing Americans, via TV and newspaper ads, that coal is the source of 50 percent of their electricity, that it is an abundant domestic resource and, most importantly, that there is the promise of “clean,” or carbon-free, coal. This argument is what Mr. Kennedy’s group calls “the dirty lie.”

Nevertheless, the industry sees clean coal technologies as its best hope for joining the ranks of green power. The problem is that the technology, called carbon capture and storage, is still being developed and could make electricity generated by coal more expensive than power from other sources.

“There are 16 gigawatts of new coal-fired generation coming online in the next few years,” said Kevin Book, an energy policy analyst at FBR Capital Markets. “They may well be the last plants.”

Mr. Rogers, 61, may adhere to the pro-coal sentiments of many of his peers, but he is hardly a typical captain of the energy industry. Five years ago, he began advocating for climate change legislation at a time when some companies were still saying human activity had nothing to do with global warming. Mr. Rogers, a native of Birmingham, Ala., considers himself an environmentalist and calls his decision to move forward with the new plant, made shortly after he became chief of Duke in April 2006, a difficult one.

The estimated 240 million tons of carbon dioxide that will be generated over the 40-year life of the plant, known as Cliffside, will probably never be captured, when or if such technology becomes viable. Most proposals to capture gas involve injecting it deep into the earth. But in North and South Carolina, where Duke operates, the underground rock is too porous to contain any gas.

“There’s always been a tension between affordability and clean,” Mr. Rogers said in mid-January, sipping a cappuccino on his way to a meeting in Washington with Carol M. Browner, the White House coordinator of energy and climate policy. “Ultimately we need to be able to meet the energy needs of our customers. That’s my biggest obligation.”

Fulfilling that responsibility through renewable energy wasn’t an option, he said. Duke, which gets 71 percent of its electricity from coal, has only recently delved into solar energy, promising to buy the entire output of a large solar farm in North Carolina and it is seeking final approval to put solar panels on rooftops at hundreds of customer sites. Its first purchase from a wind farm has started flowing to customers in Indiana. All that combined, though, will give Duke only 124 megawatts of energy, compared with 800 planned from Cliffside.

Hoping to mitigate some of the environmental impact of Cliffside, Mr. Rogers has promised to shut down more than an equal amount of older, more polluting power plants by 2018.


For their part, nearly all utility companies yearn for the day when coal isn’t a dirty word and when plants can capture and store their carbon dioxide. No one is a bigger cheerleader for this idea than Mr. Morris of American Electric.

This fall, the 150-foot smokestack at the company’s Mountaineer coal plant in New Haven, W.Va., will be outfitted with technology that uses chilled ammonia to trap carbon dioxide. The greenhouse gas will then be turned into a liquid and injected into the ground. It will be the first such project that will both capture and store carbon from an existing plant, and Mr. Morris is wildly optimistic. “At the end of the day we will develop this technology,” he says.

But Mr. Morris’s plans, as ambitious as they are, say a lot about just how far away “clean coal” is. Of the 8.5 million metric tons of carbon dioxide emitted annually by the Mountaineer plant, only 100,000 to 300,000 will be removed with the new technology. And American Electric and the maker of the technology, Alstom, are spending $100 million on the initiative — a daunting expense for some producers.

Then there is the cost of doing the carbon removal, which Mr. Book, of FBR Capital Markets, estimates would more than double the price of electricity generated from coal, possibly making it too expensive relative to other sources. “The economic case isn’t there for private companies to do it,” he says. “The government is going to have to fund it.”

A podcast by Inside Renewable Energy discusses the Netherlands. In the podcast, French utility EON reveals that their carbon capture technology demonstration costs €40 per captured ton of CO2. They hope to get it down to €20 per ton of CO2 within 5 years. The demonstration captured 250kg of CO2 per hour, whereas the 1 GW plant put out several tens of tons per hour. The discussion on carbon capture technology starts at 9:30. The cost figures come out around 12:00.

McKinsey and Co, a respected international business consulting firm, projects that CCS should cost around €30-45 per ton of CO2 captured in 2030 on a commercial scale. McKinsey expects carbon emissions to cost €30-48 per ton, which would make CCS projects self-sustaining. Keep in mind that costs for individual projects can vary considerably from this range due to unique characteristics. Captured CO2 has to be stored, and McKinsey pointed to transport costs for this CO2 as one variable. Transporting captured CO2 over 200km added €10 per ton to the cost. I haven't perused their full report yet, so I can't say how much CCS would add to our electricity costs.

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