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WisBusiness.com: Study Says Coal Gasification Is Cleaner, More Expensive And Inevitable
6/2/2006

By Brian E. Clark
WisBusiness.com

A draft report on coal gasification released Thursday by the state Department of Natural Resources and the Public Service Commission says the process is currently $5 to $7 per megawatt hour more expensive than conventional coal-burning technology.

However, when costly controls are added to capture carbon dioxide – a primary greenhouse gas – gasification is about $10 per megawatt hour less expensive, the report said. Such controls are not currently required, and until they are, the technology will likely remain a more expensive option.

The draft said that treatment of carbon dioxide is the major factor determining the cost-competitiveness of the process, which is also known as integrated gasification combined-cycle (IGCC).

Regulating carbon dioxide is primarily a federal issue that has yet to be addressed, but congressional leaders are reviewing the issue and carbon-capturing controls or even a tax on each ton of carbon a plant produces soon may be required.

Beth Martin, a spokeswoman for Wisconsin Energy – which is in the process of building the $2.15 billion Oak Creek coal project -- said her company has a copy of the report and is reviewing it.

“We have proposed IGCC in the past and will likely try again when technology and cost are more certain,” she said.

Bruce Nilles, director of the Midwest Energy Campaign for the Sierra Club, lauded the report for addressing global warming.

“It’s long overdue,” he said. “We can’t ignore that coal remains a very dirty source of power. If coal is to have a future, we have to use something better than 19th Century technology.

“Regulation of carbon dioxide is coming and every power company knows it. Do we plan for it here in Wisconsin or put our heads in the sand?”

Nilles said 10 states already have adopted global warming standards for cars. And he said states on the East and West coasts are in the process of proposing global warming standards for coal plants to cut greenhouse gas emissions from power plants.

“The PSC should factor in global warming pollution into all future decisions on new power plants when it compares the two different kind of coal-burning processes,” he said. “It should also consider alternative sources. The price of coal is becoming more volatile, the cost of wind doesn’t go up.”

Scott Smith, spokesman for Madison-based Alliant Energy, said there are a handful of test sites across the nation developing IGCC – all either fully or substantially funded by the federal government.

“We are earnestly hopeful these sites will further this technology and it can be made much more reliable and somewhat less expensive,” he said.

But he said his company - which is planning a 300-megawatt coal plant on the Mississippi - is not large enough to be the laboratory for such development.

“We are not big enough financially – and we are not big enough in our operating scale,” he said.

“We simply should not take the risk of building a plant which will cost over one-half billion dollars being unsure if it will operate reliably,” he said.

“We believe that sort of scrutiny is reasoned and practical and what our customers and our investors expect from us. We believe our time for deployment of IGCC will come, but it is not now.”

Steve Kraus, a spokesman for Madison Gas & Electric, said his utility is interested in the technology and hopes to use it as it becomes more cost-effective.

MGE recently announced it will close the coal-burning part of its Blount Street power plant on Madison’s isthmus within six years because of the pollution it emits.

But Kraus said the issue with the nearly century old plant was not so much carbon dioxide as other pollutants such as nitrous oxide, particulates and mercury.

Todd Stuart, the new executive director of the Wisconsin Industrial Energy Group (WIEG), said he will be sending the report to his members – some of whom consume huge amounts of energy.

“This technology is promising, especially considering some sort of carbon tax is probably inevitable,” he said.

"However, at this time it is probably too big of a risk to bear for Wisconsin customers. We have relatively small utilities and therefore the costs to the ratepayer could be very expensive.

“I think WIEG will probably take a position to let other utilities and other states go first and let them bear the risk of being a first-mover," he said.

Commissioner Mark Meyer said the report is an important step because the Badger State is “is in the midst of a building cycle, and the decisions we make in the next ten years for future power plants will likely impact our economy and environment for the next half century.”

Five of the state’s biggest power companies are now planning, constructing or helping fund major new coal power plants. Though they might be cleaner than past generations of plants, none of them are slated to use gasification.

And last year, nearly two-thirds of the electricity consumed in Wisconsin came from coal-burning plants.

In addition to cost, the draft report also explores engineering, environmental, financial, economic development and policy issues related to IGCC.

The draft results show that IGCC has lower sulfur dioxide and mercury emissions than conventional coal plants and greater potential to capture carbon dioxide given the current technology.

The report also said that as IGCC matures and questions of construction cost, reliability and efficiency are addressed, IGCC may reach cost parity with SCPC, regardless of the treatment of carbon dioxide.

“Controlling carbon dioxide is the wild card in this analysis,” said DNR Air and Waste Administrator Al Shea.

“Both in terms of our understanding of technology options and federal regulations - these factors have the potential to change the draft results dramatically.”

IGCC uses high pressure and temperature to transform coal into a gas prior to combustion. The resulting gas can be cleaned of pollutants prior to firing in a turbine.

Conventional coal technology burns coal in a boiler, and pollutants must be stripped out after combustion in the exhaust, which is both a more difficult and expensive process.

IGCC also has lower emissions of sulfur dioxide, which contributes to haze, acid rain and the formation of fine particulate pollution.

The draft report is available at: http://psc.wi.gov/CleanCoal/comments.htm The agencies will take comments until 4 p.m. on June 30 and then will issue a final report. The public is encouraged to submit comments via the website.
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