Whether in the form of a carbon tax or cap-and-trade regime, climate-change policy is coming and will have a profound effect on electric suppliers and consumers. EPRI studied the effects of high...
The Key to California's Coal Future
world coal resources, so using it makes us less dependent on fossil imports.
Promising, Yet Challenging
Lower-carbon coal technology is on the horizon. However, it will take 15 or 20 years for integrated gas combined-cycle (IGCC) units with carbon capture and geological sequestration to become commonplace. This technology has the potential to capture and sequester up to 90 percent of the carbon-dioxide emissions associated with coal combustion.
As promising as this technology is, existing demonstration sites in Europe and the United States reveal fundamental challenges. Among these are the complexity of IGCC’s structure and substantially higher investment costs. Electricity from the first commercial scale IGCC plants will be about 15-20 percent more expensive than electricity from pulverized coal plants, according to estimates.
While smaller IGCC plants have been demonstrated in the United States, combining the technology with geological storage of carbon dioxide has not. A number of important technical and financial issues remain, and it is possible that geo-sequestration will prove too costly or technically infeasible. Since IGCC plants emit less than pulverized coal plants, IGCC plants that are sequestration-ready could be built, with the intention of retrofitting them as sequestration becomes available. It is prudent to plan on it taking another 15 to 20 years for this sequestration technology to become commercially available.
Thus, California finds itself in a difficult situation. Aggressive efficiency and renewables will be insufficient to meet either the growth in electricity demand or state emissions targets. Committing to a fleet of new gas plants would be much more expensive and volatile than new conventional coal plants. IGCC with geological sequestration likely won’t be ready for 15 to 20 years. IGCC alone, while reducing emissions, is more expensive than conventional coal, and is still an emerging technology. At best, over the next decade, IGCC will become commercially prevalent, but geosequestration will be perhaps another decade away, and emissions still will be significantly higher than from gas turbines. At worst, some amount of conventional coal will be built to serve California’s electricity demand. As a result, California faces a host of challenges to meet its GHG emissions reduction targets.
This dilemma can be addressed at least in part by high-quality, project-based reductions. Project-based reductions can be used to mitigate this potential forthcoming pulse of GHG from IGCC or conventional coal. They can serve as a transitional bridge that allows the state to meet its GHG targets while IGCC with geosequestration becomes commercially available. Project funds can be invested in a wide variety of technologies in uncapped sectors, such as transportation, industry, forestry, and agriculture. It is essential that project-based reductions meet high quality standards. They must be real reductions that are additional to business as usual, and they must be quantified and verified using third-party verification.
Project-based reductions are an important component of the Kyoto Protocol, and have been successfully demonstrated in the United States. Among the first organizations to assemble a portfolio of project-based reductions, The Climate Trust got its start in 1997 when the Oregon legislature unanimously passed a law that requires new power plants