Utilities Unbundled - Issue 14
While demand for coal-fired power remains high, what is being done to reduce its environmental impact?
Carbon price is key to the success of Carbon Capture and Storage (CCS).
Coal is a relatively cheap and plentiful source of fuel for power generation. But its combustion emits greenhouse gases, including nitrous oxides (NOx), sulfur oxides (SOx), and carbon dioxide (CO2).
An increasingly viable and recognized solution for reducing emissions is Carbon Capture and Storage (CCS). But with the price of carbon at an all-time low, does it pay to invest in CCS?
World’s first commercial CCS plant
Canada’s SaskPower is building the world's first full-scale CCS plant in Saskatchewan, by transforming an aging 110MW unit to capture one million tonnes per year of CO2 emissions.
“We plan to increase gas in our generation mix, but don’t want to become solely reliant on it,” says Robert Watson, SaskPower’s President and CEO. “And we are literally sitting on a 300-year supply of lignite coal right by our Boundary Dam plant.”
Two other factors sealed the business case for CCS:
- Geology: Saskatchewan has significant heavy oil reserves, which CO2 can help to extract through Enhanced Oil Recovery (EOR).
- Government funding: “We received around US$240m from the Canadian government, and signed a long-term agreement with Cenovus Energy to buy our liquefied CO2 to use for EOR,” says Watson. There will also be no transport costs, as Cenovus Energy will pick up the CO2 from Boundary Dam.
End goal: better efficiency
Some believe it would be more effective to focus on the efficiency of coal-fired plants than invest in CCS.
Dr. Franz-Josef Wodopia, a Vice President of the European Association for Coal and Lignite (EURACOAL), says that Germany was able to reduce CO2 emissions by some 92% and NOx emissions by more than 80% from 1990 to 2011, by:
- Focusing on “end-of-pipe” technology
- Optimizing the combustion process
- Improving efficiency
A small rise in efficiency can bring large reductions in emissions. Dr. Wodopia explains that the average efficiency of a coal-fired plant is 30% worldwide. Raising it by just 8%, using commercial technology widely employed in the EU, would cut CO2 emissions by 21%.
Obstacles to commercialization of CCS
Carbon price is key to the success of CCS. “In Europe, CCS does not pay,” argues Dr. Wodopia. “The European Emissions Trading System should be the primary incentive to invest in CCS. If the price was €40 to €75 per tonne of CO2 then it would be rational to invest in CCS, but in February 2013 the actual price was €4 per tonne.”
Cost is an obstacle in other geographies, too. “Price and an inadequate regulatory framework are the biggest factors restricting the progression of CCS technologies in China,” says Professor Xiaochun Li of the Institute of Rock and Soil Mechanics, Chinese Academy of Sciences. At present, there are 11 CCS pilot projects in China (see China could lead in CCS).
Putting coal in its proper context
Reducing the environmental impact of coal-fired generation remains a priority, whether through more efficient plants or CCS.
SaskPower’s CCS plant demonstrates what can be done when the conditions are right. But for those without the scale of new build or promising geologies, improving the efficiency of existing coal-fired plants makes sense.
Educating customers and the public on the costs of abandoning coal and efforts to reduce greenhouse gas emissions should reduce the stigma of “dirty coal” and help to put coal in its proper context.
Contributor, Keith Harrison