What Happened to Clean Coal?

Posted on Posted in Consumer Advocacy, Deregulated Electricity, TER News, Texas Deregulated Electricity, Texas Electricity, Texas Electricity News, Uncategorized
Though CCS is technically feasible, it might be economically smarter to leave the coal in the ground.
Though “Clean Coal” (Carbon Capture and Storage) is technically feasible, it might be economically smarter to leave the one-time “Black Diamond” in the ground.

Though Carbon Capture and Storage —“Clean Coal”— is technically feasible, it might be economically smarter to leave the once Black Diamond in the ground.

For years, the coal industry has championed “clean coal” as an innovation that could reinvigorate the US coal industry and make it competitive as a low-carbon emitting fuel for the future. In 2009, Senators John Kerry, D-Mass., and Lindsey Graham, R-S.C., even wrote a New York Times op-ed piece calling for the United States carbon capture and storage (CCS) to become the “Saudi Arabia of clean coal.” CCS removes CO2 from exhaust and then either put the CO2 back into the ground for storage or sells the gas via pipeline for other industrial uses, most notably for enhanced oil recovery (EOR).

One thing has stood in the way: clean coal is highly expensive. While the technological process has been shown to be successful, capturing CO2 uses lots of energy —some of which is produced during the process. CCS currently relies on three methods for capturing CO2 and all three, to some degree, currently reduce plant efficiency which adds to the cost of the electricity it produces.

  1. Post Combustion. Coal is burned and the exhaust is scrubbed of CO2. This method is well-adapted for retrofitting existing coal-burning generators. However, research by the DOE and National Energy Technology Laboratory (NETL) suggest that current technology “may increase the cost of electricity for a new pulverized coal plant by up to 80 percent and result in a 20 to 30 percent decrease in efficiency due to parasitic energy requirements.” In other words, some of the energy produced would need to go to maintaining the process itself.
  2. Pre Combustion. Coal is heated in order to release “syngas” — a combination of carbon monoxide, water, CO2, hydrogen, and methane. The syngas is processed through a water-gas shift reaction to convert the CO and H2) (water) into CO2 and H2 (free hydrogen). There are two processes that produce this reaction; one that works at 400°F to 500°F and the other that works at 550°F to 900°F. Both rely on metallic catalysts which must be replenished periodically. While this process makes CO2 is much easier to capture and is ideal for combined cycle generation, the high energy requirements add about 30% to the price of electricity.
  3. Oxy-fuel Combustion. Coal is burned in oxygen instead of air, producing more heat and also mostly CO2 and water vapor as exhaust. The water is condensed out leaving just the CO2. And while oxy-fuel combustion also reduces NOX and SOX emissions between 60-70 percent and reduces mercury as well, the amount and the purity of oxygen used adds to the production cost of the electricity.

Costs mount in the storage phase include the energy used to compress CO2 and gas storage itself. One estimate is that CCS increases the fuel needs of a coal-fired electricity plant by 25–40%. Storing CO2 in the ground such as in salt mines or deep layers of off-shore basalt adds well-drilling costs and water to wash the gas down and fix it to the deep rocks. In the case of oil, while EOR was initially floated as a means to squeeze more oil out of depleted American wells, it lost favor when environmentalists pointed out that it not only used captured CO2 to produce more CO2-producing fuel but that some of that CO2 used to recover oil would escape into the atmosphere —completely negating the whole idea behind CCS. While EOR does push more oil out of the ground cheaply and effectively, it uses CO2 from a process that reduces the efficiency of electric generator plants passes those costs onto electricity ratepayers.

One controversial study arose last year pointing out that previous studies ignored how CCS costs escalate due to an energy consuming-feedback loop. Basically, CCS requires a coal generator to divert a portion of their energy output to power their CCS. The more power you produce, the more energy you have to divert to CCS —which cuts the overall efficiency to 16%. In other words, compared to renewables and natural gas, it’s presently more energy efficient to leave coal in the ground.

According to the Center for Climate and Energy Solutions, “CCS technology is just reaching commercial maturity for power plant applications,” which the main reason cost are high and efficiency is low. While that’s a reasonable argument, the irony is that hidden energy costs are not what almost snuffed out two major CCS projects.

Financing Clean Coal is a Mess

The Southern Company’s Kemper coal plant in Dekalb, MS, is currently under investigation by the Securities and Exchange Commission on charges that the plant’s owners underestimated and misled the public on the length of the plant’s construction. The project is over 2 years behind schedule and $4 billion over budget. The plant currently costs $6.6 billion and has paid back $368 million in federal tax credits. In addition to a suit filed by 186,000 Mississippi Power consumers, EOR company Treetop Midstream Services is seeking $100 million and punitive damages for fraud saying the delayed project has failed to deliver the CO2 it was promised.

The Texas Clean Energy Project (TCEP) was planned as an Integrated Gasification Combined Cycle (IGCC) project using coal gasification located in Penwell, Texas. Begun by Summit Power in 2010, the $1.9 billion TCEP received $118 million in DOE funding with the understanding that Summit Power would be able to secure lenders and investors to finance the rest of the project. Six years on, costs of grown to $3.9 billion, and TCEP is nowhere closer to attracting investment. In an April special report, the DOE pointed out that “coal-based power plants have higher capital and operating costs, making investments in other sources of energy more appealing.” In particular, cheaper natural gas generators, wind farms, and solar arrays.

One other line stands out from that April report. Christopher Smith, Assistant Secretary for Fossil Energy points out in a memo that when DOE made the agreement with TCEP that “there were no commercial-scale CCUS electric power projects anywhere in the world”, and that such risk-taking required some flexibility. Sure, that’s understandable and to be fair, it’s possible that once the technology is mature it might not perform quite as poorly. However, the point here has been made resoundingly clear by the market: big gambles on complex and unproven coal-fired CCS plants are not worth the expense or the financial risk. Nobody wants to mess with it.

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