From Sweden to the US coal-fired power plants are being repurposed to run off greener fuels such as biomass and natural gas.
In the four years to November 2014 at least 29 coal units in ten US states switched to natural gas or biomass, according to market data firm SNL Financial. By 2035, the U.S. Energy Information Administration anticipates natural gas will be the primary fuel for US electricity generation.
Making the change from coal to biomass or gas can enable power plants to stay open amid tightening limits on CO2 emissions in the US and Europe, thus saving jobs and local revenue generation and meeting local energy demand. It also enables companies to keep power units in operation for longer, meaning they continue to generate revenue from these high-value assets.
However, repurposing coal-fired power plants can be expensive, challenging from a regulatory and government incentive point of view, and the conversion may often face opposition from local environmental groups who say natural gas and biomass do not reduce CO2 emissions enough.
What are the challenges involved?
Fuel switching from coal to gas or biomass can be an economical option for some utilities that must maintain a certain generating capacity in their fleet and can’t justify the cost of adding costly environmental equipment or closing and replacing coal capacity, Scott Gossard, general manager for service products at Babcock & Wilcox Power Generation Group wrote in June.
Since 2010, Babcock & Wilcox has implemented, or is in the process of implementing, the conversion of about 2% (around 3,000MW) of its installed US coal boiler base to natural gas.
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By GlobalData"The most likely candidate for a coal-to-gas conversion are 50-plus year old units, less than 300MW in capacity and generally early generation sub-critical utility boilers – the least efficient, most costly to operate and with the lowest overall capacity factor in the coal fleet," Gossard explained.
However, the main challenges for companies doing this are cost, government regulation, a lack of subsidies and public opposition. In general it can take anything from two and a half to five years to make the conversion.
Christopher Goncalves, co-chair and managing director for energy at Berkeley Research Group, warns that permitting and subsidies can be major hurdles to coal plant conversions.
"The permitting can be a big issue because it can be a complex process and if you are switching from one fuel to another you can often apply for a permit and that can take time and sometimes be quite bureaucratic in certain countries," he says.
He highlights Drax Power’s problems in the UK. The company’s £700m plans to convert three of its six generating units to biomass in 2012, with two of the three units now converted and the third set to complete its upgrade in 2016, were jeopardised when the UK scrapped its Climate Change Levy exemption for renewable electricity producers in August.
The government was accused of pulling the rug from under Drax Power shareholders’ feet and the company has slowed its commitment to reducing carbon emissions by announcing it will not be investing further in the White Rose carbon capture and storage project.
But conversion projects are also facing challenges from another direction. While many local communities and politicians are actively in favour of keeping power plants open because of local and regional economic issues, such as permanent jobs, property taxes and other economic impacts, many groups are opposed to the idea.
The Dunkirk power plant in western New York, for example, is just one of many repowering projects that has faced legal action. The plant was the focus of a lawsuit by environmental groups that said repowering the plant to use both coal and natural gas will force the state’s energy consumers to pay for an unnecessary facility. Boosting transmission capacity could instead fix reliability issues, the opponents argued. The $150m project has since been mothballed despite those in favour saying it will preserve jobs and substantially improve air quality.
Environmentally sound?
While not exactly a ‘green’ alternative, electricity generation from natural gas emits only about half as much carbon as coal-powered electricity, and electricity generated from biomass offers a renewable source of feedstock.
However, many environmentalists question the overall benefits of biomass and natural gas and think money should be pumped into renewables instead.
In fact, biomass’s green credentials have routinely been called into question by a number of scientists including John DeCicco, a research professor at the Energy Institute of the University of Michigan, who has said: "Almost all of the fields used to produce biofuels were already being used to produce crops for food, so there is no significant increase in the amount of carbon dioxide being removed from the atmosphere."
Companies such as Drax have also been accused of unsustainable forestry practices in the sourcing of wood pellets to burn in its biomass units.
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And while natural gas has been touted as a ‘bridge fuel’ that can step in until renewables can sufficiently meet demand, it is still a fossil fuel and not a renewable or completely clean source of energy.
"The retrofit of an old plant will delay only briefly the ultimate replacement of the plant with a combination of renewables (wind and solar) and transmission," says Mike Jacobs from the Union of Concerned Scientists. "The broad policy of converting coal plants to burn another fuel is not generally a good idea."
This point is echoed by Kim Teplitsky, deputy secretary of the Northeast Sierra Club’s Beyond Coal campaign, who told the National Geographic: "Do you pump a whole bunch of the public’s money into outdated, inefficient infrastructure, or do you say it’s time to move forward and invest in renewable energy and upgraded transmission to move that renewable energy around?"
Babcock and Wilson’s Gossard argues that despite the popularity of the concept, the coal to gas conversion market has peaked and is now on the decline. But as long as renewables are unable to fully meet electricity demand, and carbon capture remains a fairly nascent technology, pressing climate change goals will drive companies to switch to gas – especially as long as it remains cheap and abundant – or to biomass if government policy is favourable. If the economics add up, a conversion from coal to gas of biomass, even if only temporary, could be a relatively fast way to do that.
