NR2028

NEWS RELEASE                                                                                                     NOVEMBER 2014

The Global Warming Debate Can Be Resolved At Least Temporarily With a Plan to Please Everyone

The Republicans want more jobs and the White House wants greenhouse gas reduction. Both can be achieved with a revised version of a clean coal program. There are new developments and options not previously explored which make this possible.  They are as follows:

  • Environmentalists are willing to take the long-term view as per the agreement between China and the U.S. based on Chinese CO2 emissions peaking in 2030.
  • A new IEA study shows the economic life of a coal-fired power plant can be as little as 25 years.
  • Advanced coal-fired power plants emit 20 percent less CO2 than old power plants.
  • Waste heat utilization can double the efficiency of a coal-fired power plant.
  • New technologies can make coal-fired power plants more efficient.

There is an intensive debate in the U.S. relative to greenhouse gas reductions. Both sides cite economic consequences. The reduction advocates cite the longer term harm to the planet while the opponents cite the loss of jobs and cost particularly in the short term. Surprisingly, there is one alternative which can achieve the goals and increase rather than decrease jobs.

The solution lies in the fact that upgraded coal-fired boilers can emit 20 percent less CO2 than older boilers. The cost of electricity for upgraded units would not rise because the 20 percent coal reduction and lower maintenance costs offset the depreciation on investment. The analogy is identical to driving a new car or an old one.  Many coal-fired power plants are as old as a 1960 Studebaker and not any more efficient.

The new agreement between China and the U.S. calls for steeper greenhouse gas reductions. The United States intends to achieve an economy-wide target of reducing its emissions by 26 percent - 28 percent below its 2005 level in 2025. Relative to the contribution from the power sector, EPA proposed guidelines for existing power plants in June 2014 which would reduce power sector emissions 30 percent below 2005 levels by 2030.

If 40 percent of coal-fired boilers were converted to the advanced supercritical design and those plants which could economically utilize their waste heat did so, the impact on greenhouse gases would be very substantial.

The fact that these capital investments can be amortized based on a 25 year life means that by 2045 these power plants will be retired. They can then be replaced with the latest technology to minimize greenhouse gas emissions.

Upgrading 40 percent of the coal fleet and providing the systems to utilize waste heat would require an investment of more than $300 billion. This would be a very big stimulus to the U.S. economy. It is a win-win situation in that the reduction goals are achieved and there are jobs added rather than lost.

Some coal-fired power plants can be upgraded with new supercritical boilers but retention of existing coal handling and waste treatment.  Others may need to be replaced in total. Waste heat utilization can be achieved in multiple ways. Great Rivers Energy is a leader in this technology. It operates the Blue Flint Ethanol plant with waste heat from the power plant. DOE/NETL has a number of waste heat recovery programs.  Europe has many examples of co-generation and district heating.

As attractive as this may seem, there are those who will argue that other routes are even more attractive.  Why not replace 100,000 MW of coal-fired power plants with gas turbine combined cycle plants?  With the cost of gas at $4/MMBtu this is a low cost route to reduce greenhouse gases. There are two problems with this option:

  • Transmission of the gas can be costly and requires more infrastructures. Some industrial plants are finding that it will cost an extra $4/MMBtu just to obtain access.
  • The low gas price is temporary.  Eventually U.S. gas prices will rise to world levels.  The construction of LNG and gas-to-liquids plants will ensure the closure of the gap.

A large program is already in place to build gas turbine power generators to fill our expanding electricity needs. The risk in trying to expand this program to eliminate coal is too great.

Others argue that now is the time to replace coal with renewables. However, the selection of renewables to replace coal in the short term would be very expensive.  One reason is that each of the renewable energy options has its sweet spot but unlike coal cannot be sited anywhere.

Variables   Associated With Energy Sources

Solar Irradiation

Varies widely   depending on the location and varies from hour to hour and day. Typical capacity   factor is 25 percent.

Wind  Velocity

Varies widely   dependent on location and fluctuation at a location  providing a   typical 30 percent capacity factor

Nuclear Power Capital   Costs

Estimates range from   $3000 to more than $5000/kW with recent escalation for some new   plants.  Considerable variation in region e.g. low cost Chinese labor.

Nuclear External   Costs

Ongoing safety costs   and impact of accidents such as Fukishima, costs of waste disposal.

Biomass

Fuel availability and   cost.

Gas Turbine

Gas price varies   greatly from region to region.

Coal

CO2   mitigation cost.

 

The economics is a function of these variables. A solar plant might have a capital cost of $2,000/kW vs. $2,500/kW for a coal-fired power plant.  But if the solar plant has a capacity factor which is 20 percent and the coal-fired power plant has an 85 percent factor, then the capital cost for actual electricity produced is far higher for solar.  Many of the areas with the highest irradiation are far from where the electricity is needed, so infrastructure costs loom large.

The reality is that coal will remain a major source of power generation in the U.S. for the next few decades.  Carbon sequestration cannot be economically justified but supercritical upgrades and waste heat utilization have an attractive return on investment while also meeting greenhouse gas reduction goals.

More information on this subject can be found in N043 Fossil and Nuclear Power Generation: World Analysis and Forecast.

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