Sunday, March 8, 2009

Coal, no longer the first choice fuel for power plants?

In 2007, the Department of Energy estimated that about 151 coal fired power plants would be built in the coming years in the US[i]. The agency’s latest forecast puts the number at 95[ii] which is an almost 37% decrease from the previous estimate.

This follows a recent trend across the nation where coal fired power plants have faced vehement opposition from environmental groups and lost favor with various state regulation agencies. With the change of administration in Washington coal seems to have lost favor as the backbone of the country’s power supply. In the economic stimulus package President Obama allocated $16.8 billion for renewable energy and energy efficiency programs[iii].

Last year only 5 new coal plants came online set to produce 1400 MW while 8300 MW of wind was added in the same period. [iv]

Plans to build coal plants in various states have been replaced by other options. Recently two coal power plants were shelved in Iowa and Nevada. In Nevada, the utility decided to focus on geothermal, wind and solar potential in the state while in Iowa the proposed coal plant lost out to a wind farm. In Texas, TXU was forced to scrap 8 planned coal plants because of the opposition from various environmental groups[v]. Even in Montana and Wyoming which house the biggest deposits of coal in the world with reserves enough to last the US more than a century, lawsuits over climate change have delayed construction of new power plants[vi]. An unofficial tally suggests that more than 90 plants have been delayed or canceled since 2002.

If this happens to become a long term trend, this could greatly reduce the pressure on Carbon Capture and Sequestration (CCS). The technology is a policymaker’s dream because it eliminates the need for them to limit the use of coal. At present, there is no large power plant in the world that uses CCS[vii].

Carbon dioxide has been used by oil firms to increase the pressure in the reservoirs for years. Exxon Mobil runs the world’s largest carbon capture facility at La Barge, Wyoming. The US has a network of 3600 miles of pipes to carry CO2 from such facilities to oil and gas fields.[viii] Even so the technology is expensive for power plants. The IEA forecasts a $35-60 per ton of emissions reduced through CCS[ix]. This cost would be for plants employing state of the art technology so it is reasonable to assume that old plants would find it even more expensive.

So if the smaller the overall number of coal power plants is, the less expensive would be the cost emission reduction. That, in itself, is a positive sign.

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