Ongoing litigation over EPA rules raises compliance risks and costs. North Carolina utilities, however, benefited from the state’s forward thinking.
A new future for small coal-fired plants.
comparable and more expensive, with natural gas somewhat preferred. The choice between natural gas and biomass depends a great deal on judgment about the future prices of those two fuels, something that is a matter of considerable debate. If natural gas is readily available and remains inexpensive, it appears preferable to biomass. If biomass is readily available and natural gas rises in price, biomass is the most appropriate choice. When modest environmental adders are considered, the picture changes only slightly. Coal refurbishment remains the best economic choice, with biomass and natural gas repowering being moderately more expensive. Of course, these observations must be considered in light of the specific conditions at each site.
How does consideration of biocoal change this picture? This is illustrated in Figure 5 where three scenarios of biocoal economics are shown: low, base and high. The capital cost required for using biocoal is modest. In this example, boiler refurbishment will be required but environmental controls required are less extensive, largely for PM-10. SO 2, NO X and Hg. The estimated cost is $25 million. In this example, three possibilities are included for the cost of biocoal. In the base case, biocoal is assumed to cost $4/MMBtu more than raw biomass. This is consistent with current estimates. The low case is $2/MMBtu, which is consistent with technological and infrastructure advances as well as short transportation distances. The high case is $6/MMBtu, which is associated with disappointing technological results and long transportation distances.
Biocoal has a major effect on the choice among alternatives. In the base case, the annual fuel bill is $25 million. The resulting cost of biocoal repowering is $32 million with or without environmental adders. Without environmental adders, biocoal is considerably less expensive than both natural gas and raw biomass repowering. It remains somewhat more expensive than coal itself. With even modest environmental adders, biocoal is now considerably cheaper than all three other alternatives by between $5 million and $15 million per year.
In the low case, the cost of biocoal repowering is $26 million. This figure is even lower than coal on a pure economic basis. With foreseeable technological advances, biocoal might be able to compete in some circumstances with coal on straight economics. In the high case, the cost of biocoal repowering is $39 million. Even in this case, biocoal repowering is preferred to natural gas and raw biomass repowering. Even with disappointing technological progress, biocoal might have an important role where environmental considerations are significant.
Based on this analysis, biocoal appears to have the potential for considerable economic and environmental benefit. In the absence of any environmental adders, biocoal conversion might save up to $2 million/year on a straight economic basis over the next best alternative—coal refurbishment. If environmental adders are considered, whether they are mandated or pursued voluntarily, the savings might be as high as $5 to $15 million/year or more over the other alternatives. And if biocoal conversion takes the place of coal refurbishment or natural gas repowering, CO 2 emissions are reduced by between 150,000 and 300,000 tons per year.