For continued growth, the coal industry must get clean. Carbon capture storage (CCS) technology is ready and available but is still relatively expensive and has, until recently, never been applied to the power industry before.
Two power companies - one in Canada and another in the US - have set out to show how the economics and technology of CCS can be applied to the power industry.
SaskPower's $1.3bn CCS retrofit project at Boundary Dam power station in Saskatchewan, Canada, will become the world's first post-combustion coal-fired CCS project in the world. It is expected to reduce greenhouse gas emissions by one million tonnes of CO2 each year when it comes online at the end of 2014.
In the US, Mississippi Power's Kemper County energy facility, which is currently under construction, will use coal gasification TRIG technology to turn lignite coal into gas while capturing 65% of CO2 produced.
SaskPower Boundary Dam power station in Canada
In the prairie province of Saskatchewan, more than half of the electricity generated comes from coal-fired generation. Coal is both accessible and cost-effective in the region due to significant local supply; preserving the coal industry as well as the environment is considered a high priority.
In creating a business case for retrofitting Unit 3 of Boundary Dam with CCS, SaskPower president and CEO Robert Watson says two things affected their analysis - a strategic desire to retain coal as a viable energy source and federal regulation on green house gas (GHG) emissions, which required coal-fired generation to capture a portion of the CO2 emitted.
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Boundary Dam Power Station, which received a $240m government grant for the project, will produce 110 megawatts (MW) of base-load electricity and will save the equivalent CO2 of taking 250,000 cars off the road, according to SaskPower.
Explaining the technology, Watson says: "Conceptually, the technology involves the movement of flue gas from the power plant, through an absorber and then a stripper which via chemical reactions removes the CO2 from the flue gas stream, compressing it and moving it out by pipeline to an off-taker. The key chemical is a solvent called an 'amine'."
The technology itself is not new and is based on industrial uses elsewhere but applying it to the power industry was new at the time, says Watson. This created development challenges such as building a new turbine for the unit, interconnection with the carbon capture facility and the integration of the carbon capture system with the running of the power plant.
In terms of a business model, Watson says the company compared the relative costs of the installation of a CCS system at Boundary Dam against a natural gas-fired combined cycle turbine.
"Based on the expected cost trajectory of natural gas at that time, and the sale of the CO2, the cost per megawatt hour was competitive," Watson explains.
"Over the long term (20 to 30 years), the economics are expected to remain reasonable."
It has also been reported that SaskPower hopes for a 15.5% price increase over the next three years to help pay for the project.
The CO2 captured at the project will be delivered by pipeline to nearby oil fields in southern Saskatchewan where it will be used for enhanced oil recovery. CO2 not used for this purpose will be stored at the Aquistore project, which is an independent research and monitoring project in Canada. Its aim is to demonstrate that storing CO2 deep underground is safe. Additional revenue will be collected by capturing and converting sulphur dioxide to sulphuric acid to be sold, as well as selling by-product fly ash.
Boundary Dam is just months from coming into operation - it was supposed be ready in April but has been delayed slightly - and SaskPower are already keen to take the knowledge gained from Boundary Dam around the world, particularly North America where it hopes to cash in on new restriction on carbon emissions.
Mississippi Power - Kemper County Energy Facility
According to the Environmental Protection Agency (EPA), power plants are the largest source of carbon pollution in the US, accounting for roughly one-third of all domestic greenhouse gas emissions. The EPA has proposed new emission limits for new power plants and has said that new coal-fired power plants should be built with advanced coal technology to reduce greenhouse gas emissions.
The EPA also had its authority upheld by the Supreme Court recently to regulate smog from coal plants that drifts across state lines. These proposals relate to the Obama administration's goal to cut US carbon emissions by 30% by 2030 from 2005 levels. The message is clear - the US coal industry must clean up. This is where Kemper County energy facility in Mississippi is ahead of the game.
"Southern Company is, in many ways, leading all towards a 21st century generation portfolio," said United States Secretary of Energy Dr Ernest Moniz.
The facility is a 582 MW electric power plant that will use an Integrated Gasification Combined Cycle design called TRIG (Transport Integrated Gasification), which was designed over the last 15 years by the Power Systems Development Facility in Wilsonville, Alabama - a research facility for the Department of Energy and Southern Company, Mississippi Power's parent company.
TRIG is an integrated gasification combined cycle technology, also known as coal gasification. Low-grade coal, such as lignite coal, will be heated at a high pressure to turn the coal into gas. According to Mississippi Power, the gas can be used to produce electricity while making it easier to remove emissions, such as carbon dioxide, that would otherwise end up in the atmosphere. The technology will capture 65% of the CO2 produced in the gasification process.
"The carbon footprint is essentially the same or maybe even less than a natural gas plant that doesn't have carbon capture," Southern Company engineer Randall Rush told The Guardian.
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Like Boundary, the Kemper County facility, which has received a $245m grant from the US Department of Energy as part of its Clean Coal Power Initiative and hopes to receive investment tax credits worth $279m, will capture and sell sulphuric acid and ammonia. From this, Mississippi Power says it expects to generate $50m in revenue annually. The project overall is costing $5.2bn and it has been reported that Mississippi Power expects to increase local electricity prices by 24% to claim back about half its costs.
"The Kemper County energy facility's technology provides a way to maintain coal's place in a clean, safe, reliable and affordable portfolio of energy resources," Southern Company CEO Thomas Fanning has said.
Start-up testing of the energy facility is currently ongoing. Mississippi Power media relations manager Natalie Campen says: "In May and June, pneumatic pressure testing of the two gasifiers was a success, which is an important step before the gasifiers can be heated up later this summer.
"Additionally, the combined cycle and associated common facilities are expected to be placed in service this summer. The remainder of the project is expected to be placed in service in the first half of 2015."
CCS in the power industry - is more to come?
Overall, there are 18 large-scale projects for capturing and storing CO2 emissions underway around the world; most are in North America. But the companies behind these two pioneering projects suggest there could be more CCS projects in the pipeline in the near future given the right conditions and incentives.
Campen says Kemper County energy facility model is suitable for places with abundant low-grade coal and a need for marketable captured carbon, but less applicable in places which lack those features.
She adds: "Long-term generation solutions include not only 21st century coal options like what's being constructed at the Kemper facility, but also other fuel sources like nuclear, natural gas, hydro and cost-effective renewables."
Watson believes there is lot of potential to replicate Boundary Dam elsewhere in the US, as some of its coal-fired plants will have to convert to clean coal technology to meet the new GHG emissions reductions, but that globally there is less incentive.
"Not all countries face restrictions on GHG emissions and hence there is a reluctance to impose additional costs on a given economy by having such regulations," he says.
"The technology, while not new, is not demonstrated as viable for the electrical industry. SaskPower's initiative will answer this latter point. The former two will remain to be resolved by governments around the world."