GLOBAL WARMING
Effect of Carbon Sequestration on Cost Competitiveness of Coal
Once again, setting aside the other negative impacts of coal based electric generation – the pollution, consequent public health costs, and the damage from mining – it still doesn’t make economic sense. The primary problem is the amount of energy needed to capture and compress the carbon from a coal plant. That extra energy need reduces the plants efficiency about 20%. That means a 1,000 Megawatt plant becomes an 800 Megawatt plant with CCS. Another way to say this – the plant would have to burn 25% more coal to have the same output after CCS is installed.
The following charts show how this could affect energy prices from CCS equipped plants.
This chart shows a 60% to 80% increase in the cost of electricity from a traditional pulverized coal plant with CCS.
This Standard & Poor’s chart was amended to add predicted costs from concentrating solar plants (right two columns). Note in the next to last line that the electricity from all the coal plants with CCS costs more than any of the other alternatives.
79 “Which Power Generation Technologies Will Take The Lead In Response to Carbon Controls?”, S&P Viewpoint, May 11, 2007
Here is a recent analysis by Excel Energy of the cost of various generating methods. Note that the capital costs plus operating costs are less for wind and solar compared to coal plants designed to capture only 50% of their CO2 emissions.
Another way to assess the economic viability of coal plants in a carbon constrained world is to look at the effects of a cap and trade program and test the price impact of carbon allowances at different dollar amounts. That is what this chart does. As noted, the mid range carbon cost increases the cost of coal generated electricity by 40%.
One of the arguments made in favor of new coal plants is the jobs they would create. This chart shows the projections from a UCS study comparing the employment impact of increasing U.S. renewable based generation to 20% of the market vs. continuing to use fossil fuels for almost all of our electric production.
UCS estimates suggest that the implementation of a basic RPS (20% of electricity be renewable by 2020) would create 355,000 new jobs over the period – far more than electric generation from fossil fuels (197,000 is the estimate for the latter).
87 http://www.ucsusa.org/clean_energy/renewable_energy_basics/
renewing-americas-economy.html
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This excerpt makes the point that it is foolish to build new coal plants based on current market conditions, without considering the impact of future carbon constraints. The chart below it shows the dramatic reduction in coal development that might occur if carbon costs are considered in the decision to build new generation facilities.
Building a major energy resource – especially one that costs as much and lasts as long as a coal plant -- is unavoidably an exercise in predicting the future. It cannot be prudently done without objectively analyzing the trends and potential risks that will shape the decades ahead. In the case of new coal plants, the critical trends are undeniable and moving with unstoppable momentum: CO2 levels are rising to levels unseen on the planet in millions of years, global temperatures are setting new records, scientific evidence showing that our current energy path is leading to dangerous climate changes is mounting, and the policy response at every level of government is accelerating. To assume in the face of these trends that a new coal plant could be put into service and allowed to emit millions of tons of CO2 for free for the next few decades is reckless, to say the least. New conventional coal plants in the age of global warming are not just bad policy – they are a bad investment, and one we cannot afford to make.
http://www.ucsusa.org/assets/documents/clean_energy/
gambling_with_coal_final_report_sept_06.pdf
