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In a recent speech during a visit to Toronto, Vice President Dick Cheney gave a sneak peak at the Bush administration's energy policy. As head of an energy task force that has been working since January to develop the foundation for meeting America's energy needs in the 21st century, Cheney dared to utter what has, in recent years, been a four-letter word in energy and environmental policy circles-coal. Relatively cheap and abundant, coal still provides the cornerstone of the U.S. electric generation system, accounting for 43 percent of installed utility capacity and 56 percent of total utility generation. However, increasingly stringent environmental regulations, higher capital costs, and longer construction lead times have steered power plant developers away from coal and toward alternative fuels-primarily natural gas-to power new generating facilities.
Indeed, of the nearly 474,000 MW of new generating capacity identified by RDI's NewGEN database as newly operating, under construction, or in some phase of development, approximately 422,000 MW (89 percent) is gas-fired. In recent months, however, high natural gas prices, the California energy crisis, and a favorable administration have stimulated renewed interest in coal. RDI has identified 70 new coal projects, accounting for nearly 32,000 MW of capacity, currently on the drawing board. Of these, at least half were announced in the last six months.
Still, environmental, permitting, and siting risks have not disappeared. Developers, with an eye toward improving regulatory and public acceptance of coal projects, have drawn up plans for an unprecedented number of plants incorporating "clean coal technologies" or "CCTs". More widely utilized in Europe, circulating fluidized bed (CFB), pressurized fluidized bed (PFB), and integrated gasification combined cycle (IGCC) technologies generally have been used only in pilot-scale applications for power generation in this country. For the most part, these projects have been subsidized, at least in part, with funding from the Department of Energy's CCT program. Commercial demonstration of these technologies on a large scale has been limited, yet approximately 40 percent of the proposed new coal-fired capacity incorporates CFB, PFB, or IGCC technology into its design.
Nevertheless, economics still tend to weigh in favor of traditional pulverized coal (PC) units, whether sub-critical or super-critical, which have the lowest up-front capital costs, even when fully loaded with the necessary emissions control technologies. PCs have won favor with some developers because there is greater familiarity with the technology and a greater flexibility in the size of the unit-ranging from 50 to 1,300 MW. Fluidized bed units are the next lowest cost and provide the advantage of being able to burn a wide variety of coal qualities. These units tend to be smaller (typically 25 to 250 MW) and can provide a benefit of adding generation incrementally. Additionally, CFB/PFB technologies inherently reduce nitrogen oxide emissions because of the lower firing temperatures required by these units. The use of IGCC's has been limited because of their higher initial costs but is being touted by some as the "zero emissions" technology of the future. This application is currently being considered by developers using low cost petroleum coke from refineries in the Northeast