The competitive transformations of the natural gas and telecommunications industries are over a decade in the making. By contrast, competition in the electricity industry is still emerging....
The Carbon Conundrum
even if the gasifier is down, the combined-cycle portion of the plant can keep operating. He also adds that next-generation IGCC plants are expected to have higher availability rates, in part due to lessons learned at the Polk plant.
Yet even according to Tampa Electric's own charts, Polk has achieved 80 percent availability rates for the gasifier portion of the plant only in 2000 and 2002. In 2001, the gasifier was available only 65 percent of the time. From 1998 through 2002, the average Polk gasifier availability rate was 72 percent. While 65 percent-the lowest availability figure over Polk's last 5 years-is close to the average availability of 70 percent for coal-fired plants nationwide, that level of availability won't be enough to convince skeptics of new coal technologies.
"From a coal plant standpoint, if you have one day of unscheduled outage, that's up to $1 million in lost revenues. So if you don't prove that these emerging technologies can run day in, day out, without burps and upsets, then you're never going to get wide-scale acceptance or deployment," says NETL's Klara. "That's why a demonstration is so key."
Certainly, WSPC's decision to go with a pulverized coal technology bears Klara out. According to Jeff Jensen, the company considered IGCC but did not feel it was commercially viable. "There are no 500-MW models" of IGCC plants, Jenson notes.
According to Tampa Electric's Black, one of the problems is that no other utility wants to be next to dip its toe in the IGCC waters. As he dryly pointed out, "At this point, it seems everyone would like to see multiple successful IGCC plants in service before they move forward." It's the classic chicken-egg problem.
FutureGen, with its experimental tilt, may help solve some of the problem. But even if operational issues with IGCC are ironed out, the fact remains that no economic incentive exists for utilities to deal with carbon, aside from pressure from shareholders and the public.
As the National Coal Council says, "Power companies are not likely to pay the premium to install today's IGCC designs in the absence of clear regulatory direction on the CO 2 issue." 3
Black agrees. As he testified before Congress in June, "The environmental superiority of IGCC is financially unrewarded. Other coal-fired technologies may be able to meet current environmental regulations, and there is no economic benefit for the additional environmental performance of IGCC. The potential benefits of future mercury and CO 2 removal are difficult to monetize."
No Funding Solace
While some look to increased federal funding to push gasification and sequestration, this year's budget does not offer much solace, despite the rhetoric from the administration.
The House Energy bill includes a $2 billion, 10-year authorization for the Clean Coal Power Initiative. While last year's CCPI proposal earmarked 80 percent of funding for demonstration of gasification systems, this year's CCPI proposal drops that earmarked amount to 60 percent. Tax credit proposals also signal the administration's de-emphasis on gasification. Though the tax credit levels are substantial, existing plants that make some improvements in pollution control,