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Prepared Witness Testimony The House Committee on Energy and Commerce
Future Options for Generation of Electricity from Coal.
Subcommittee on Energy and Air Quality
Mr. Hank Courtright
Mr. Chairman and Members of the Committee: I represent EPRI, which is a non-profit, collaborative organization conducting electricity related R&D in the public interest. EPRI has been supported voluntarily since our founding in 1973. Our members, public and private, account for more than 90% of the kilowatt-hours sold in the U.S., and we now serve more than 1000 energy and governmental organizations in more that 40 countries. My testimony will focus on the technology pathways needed for the continued use of coal for power generation in the United States. EPRI has used a roadmapping process, in conjunction with more than 200 organizations; representing electric utilities, government, industry and academia; to address the fundamental societal concerns of the 21st century. This work identified several "destinations" to be achieved to increase electricity's benefits to society over the next 50 years through advances in science and technology. One of these destinations is to "resolve the energy/environment conflict" with particular emphasis on carbon management. In order to resolve this conflict there are two limiting challenges that must be solved: 1. Strengthen the Portfolio of Electricity Generation Options 2. Accelerate Development of Carbon Sequestration Technologies The electricity generation portfolio should consist of a broad range of energy sources, including fossil, hydro, nuclear and renewable energy to adequately address issues of fuel supply uncertainty, price volatility, energy security and global sustainability. Distributed energy resource technologies are also needed to enhance power system flexibility and reliability-based generation. Coal provides over half of America's electricity and keeping coal in the generation portfolio will assure the diversity of domestic supply options and will moderate the energy cost impact on the consumer. In a study published in May 2002, EPRI estimated that the consumer benefits of keeping coal in the mix through a strong research and development (R&D) program are enormous, between $300-$1,300 billion (in 2000 dollars). The range of values reflects different assumptions about natural gas prices and discount rates used to determine net present values. If recent gas price levels continue into the future then the high end of the range, or greater than $1.0 trillion, is an appropriate benefit value. Economical technologies for sequestering carbon dioxide (CO2) need to be developed if fossil fuels are to remain as environmentally acceptable, affordable energy sources for electricity production. These technologies must include both direct methods such as capturing CO2 from electricity generation processes and storing it in geological formations, as well as indirect methods such as managing forests. Technology Pathways for Coal Use in Power Generation EPRI, DOE's Fossil Energy Office and the National Energy Technology Laboratory, (NETL) and the Coal Utilization Research Council (CURC) have recently compared their individual studies and collaborated to develop a common "Clean Coal Technology Roadmap" that provides performance targets, critical technology needs, development costs and benefits to society. This joint roadmap provides guidance to energy companies, equipment manufacturers and government on public/private R&D that is essential to achieve the coal performance targets. Each of the major pathways allow for reduction of CO2 intensity of generation. The clean coal roadmap identifies two key technology pathways that can keep coal as a viable generation option. These include: · Coal Gasification o Power Generation with extremely low emissions via Integrated Gasification Combined Cycle (IGCC) o Co-Production of transportation fuels (such as hydrogen) with electricity generation using combined cycles and fuel cells. One example of this technology is the recently announced FutureGen Presidential initiative to create power and hydrogen in conjunction with CO2 capture and storage. · Advanced Combustion o A number of advanced pulverized coal (PC) combustion options also promise extremely low emissions of criteria pollutants combined with higher efficiency of generation thus producing fewer CO2 emissions per kilowatt of generation. Some of these options concentrate the streams of CO2 to enhance its capture. Integrated Gasification Combined Cycle (IGCC) IGCC involves the gasification of coal with the resulting syngas being fired in a gas turbine. The hot exhaust from the gas turbine passes to a heat recovery steam generator (HRSG) where it produces steam that drives a steam turbine. Power is generated from both the gas and steam turbines, resulting in a combined cycle with higher efficiency. IGCC using coal for power generation is currently the cleanest coal technology available and is being demonstrated at four plants that are currently operating, two in the U.S. and two in Europe. IGCC technologies control most of the pollutants as part of the conversion process, rather than the use of "backend" clean-up devices added to today's plants. The economics of the coal utilization technologies are continuously being evaluated in EPRI studies, with the following observations: · Currently the capital cost of IGCC is estimated to be a slightly higher than for Pulverized Coal (PC) plants but the cost of electricity (COE) from the two technologies is very similar. However, because of the limited experience with IGCC the risk-driven financing costs for IGCC may be higher initially. · The difference in the cost of electricity (COE) for an IGCC versus a natural gas combined cycle plant (NGCC) is highly dependent on fuel costs. A NGCC plant with natural gas at $2.50/Million Btu has a slight advantage over IGCC with coal at $1.50/Million Btu. But with long-term natural gas prices expected to be above $4.00/Million Btu, the IGCC plant will provide the lower cost of electricity. · When the costs of CO2 capture using currently available technologies are evaluated for the various technologies, the costs for pre-combustion CO2 removal from the syngas in IGCC are much lower than for post-combustion CO2 capture from the large volumes of flue gases from PC or NGCC plants. The increase in COE for CO2 capture is 25-30% for IGCC but 60-70% for PC. When the costs of CO2 transportation and sequestration are also added, the COE increases are 30-40% and 70-80% respectively for IGCC and PC. These study results show the advantage for IGCC if CO2 removal is required. The successful future of IGCC requires: · Financial institution confidence must be established in this "new" power generation technology. Incentives in energy legislation should support the need for early deployment of this key technology. · Further reductions in capital costs to reduce the cost of electricity produced. Research and development programs are needed to enhance the performance and reduce the cost of CO2 capture technologies, together with demonstration of CO2 sequestration alternatives, as envisaged in the proposed DOE FutureGen Project. DOE's Clean Coal Power Initiative projects can also provide some of this important R&D. Sustaining sufficient funding levels over the next decade is critical for resolution of this pacing issue. · Increase in overall system reliability and availability of IGCC for power production operations. The use of two-train gasification systems that provide appropriate sparing for higher availability levels of electricity production would initially solve this concern although at increased capital cost. Co-Production/Hybrid Cycles Providing hydrogen for power and transportation from domestic primary energy sources, such as coal, will reduce dependency on imported energy and enhance national security. The development of advanced coal-based cycles, with near-zero emission capability, is an important long-term objective of the coal roadmap. These concepts are contained in the Clean Coal Technology Roadmap, DOE's Vision 21 effort and in the FutureGen initiative. These cycles may include the following capabilities: · Gasification of coal · Syngas firing with advanced turbines · Hydrogen-fired turbines · Hydrogen powered fuel cells · Production of chemicals or liquid fuels for transportation · Capture of CO2 for sequestration The efficiencies of these advanced cycles could reach or exceed 60% (Lower Heating Value or LHV). This high efficiency, coupled with CO2 capture and sequestration would result in significant reduction of CO2 compared to existing technologies for coal-based generation technologies. The provision of sufficient funding, through both government programs and public/private partnerships, is needed throughout this decade and into the next decade to accelerate the development of these cycles to their commercial state and provide clean coal options for a new fleet of coal-based electricity generation plants. Advanced Combustion Higher efficiency in combustion and steam cycles is important to the reduction of all forms of emissions. Efficiency improvement is the most cost-effective approach for reducing CO2 emissions until CO2 capture and storage becomes a commercially available technology and process. Opportunities for efficiency improvements in coal-fired power plants include: · Improved Materials for Boilers and Turbines - the development of materials to enable the move from supercritical steam cycles to higher temperature and pressure "ultrasupercritical" conditions can result in efficiencies up to 50% (LHV) for bituminous PC power plants, or an efficiency increase of 5-7 percentage points from conventional plants. A DOE/NETL funded project involving U.S. boiler manufacturers, EPRI and the Ohio Coal Development Office has been launched to provide materials for higher efficiency operation. Application of this material technology is expected to be available within a decade. · Innovative Combustion Technologies - as mentioned earlier, the capture of CO2 from the flue gases of PC plants with existing technology is very costly and energy intensive. Because of the importance of the 320 GW of existing coal plants in retaining low power costs there is an incentive for an RD&D program to investigate possible reductions in the costs and energy consumption for CO2 capture from PC plant flue gases. It is also important to examine innovative combustion technologies such as combustion with oxygen and recycled CO2 (Oxyfuel). CO2 Sequestration The development of CO2 capture, transport and storage technologies/processes is critical to sustaining coal as an option of power generation. The development of technologies for more efficient conversion of coal to electricity must be matched with a vastly expanded CO2 sequestration R&D program. No technology is at present commercially available for capturing and disposing of CO2 from power plants. Processes used in other industries for CO2 capture, if applied to existing coal-fired plants would nearly double the cost of electricity. CO2 capture and storage for the advanced systems such as IGCC, where more concentrated streams under pressure improve capture effectiveness, still results in increases in the cost of electricity by 30-40% compared to a modern pulverized coal plant with state of the art emission controls. Reducing the cost and energy penalty associated with the capture of CO2 is one focus of the research needed. This is emphasized in the recently released National Coal Council report that identified the opportunity for the U.S. to "explore a wide range of potential capture options, applicable to both gasification and combustion systems, in the hope that breakthrough technology can be identified to reduce the onerous costs and energy penalties associated with current approaches." In order to meet the challenge of managing CO2 the U.S. needs to accelerate the research and funding of work on carbon sequestration. Programs like the one million tonnes per year CO2 sequestration testing envisioned in the FutureGen effort will help prove the long-term safety and effectiveness of CO2 sequestration. However FutureGen by itself is not sufficient to prove sequestration in all applications. As stated in the National Coal Council report "Given the number of possible sinks, and likely regional differences in the characteristics of these sinks, there is a need for several of these large-scale, long-duration demonstrations." The challenge of funding this work is made even more difficult since the ongoing DOE R&D program in coal and CO2 sequestration supports these long-term goals. It would therefore be counterproductive to cut ongoing coal and CO2 research programs in order to fund FutureGen and other large-scale demonstrations. Both ongoing R&D and the new programs of large-scale testing are essential. The most critical needs for R&D in CO2 sequestration include: · Development of advanced concepts for capture · Pilot and full scale demonstrations of direct sequestration · Carbon disposal stability · Support for indirect sequestration options such as forest management and modified soil utilization practices Summary In order for the U.S. to solve the energy/environment conflict encountered as a result of the growing demand for energy, two key challenges must be solved. 1. We must sustain a strong, diverse electricity generation portfolio and keep coal prominently in this mix. This will assure a secure domestic energy supply by developing and deploying cleaner, more efficient methods of producing electricity from coal. 2. We must accelerate the research and development of efficient, environmentally sound carbon capture and storage technologies. Thank you for the opportunity to address the Committee and I welcome your questions.
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