Technologies for Clean Electricity Generation: Challenges and Opportunities (Part 2)

Like it?

Posted November 23, 2009 with 272 reads

Keywords: canada, canadian electricity association, Carbon and De-carbonization, carbon capture and storage, cea, coal, electricity, energy, Energy Investing, green building, Politics & Legislation, utilities

comment

In a recent blog post, I mentioned that the appetite for low emissions and carbon-free technology in electricity generation has never been so great. Here in Canada, we are making great strides in the development of low emissions technologies in order to meet greenhouse gas reduction targets we fully expect will become legally binding commitments at some point in the near future and more sustainably meet growing electricity demand.

A crucial next step the electricity industry must take to produce energy from lower emitting sources is the commercialization of Carbon Capture and Storage (CCS) technology. CCS will allow Canada to take advantage of its abundant coal resources while minimizing the impact to the environment. Canada is a global leader in the development of CCS technology and has 16 demonstration projects in various stages of development underway across the country. These include TransAlta’s Project Pioneer (Alberta) in a joint venture with Alstom and Capital Power Corporation (CPC). CPC is also completing Front End Engineering and Design (FEED) work on a pre-combustion CCS project known as Genesee IGCC power facility. SaskPower’s Boundary Dam Project (Saskatchewan) is also underway and examining improvements to the chemical absorption process (using a variety of solvents) as well as developing new technology and carrying out technology screening studies.

CCS involves the removal of CO2 from fossil-fired generation and requires a wide range of complex equipment and processes, including flue gas treatment prior to capture; capture and CO2 clean up processes; CO2 transportation to storage sites; injection and storage in suitable underground geologic reservoirs; and monitoring. CCS technology has the potential to remove up to 90% of CO2 emitted from the burning of coal for electricity. SaskPower’s 100 MW clean coal project at Boundary Dam has the potential to capture 1 million tonnes of CO2 each year while also drawing up to 3 million barrels of oil (also known as “Enhanced Oil Recovery” or EOR) out of otherwise spent reserves by displacing the oil with CO2.

Although there are great strides being made towards the eventual deployment of CCS technology, CCS is currently not widely commercially viable. CCS requires three key technical elements to be successful: coal supply near the facility; the right geology for storage; and the right technology, and an appropriate incentivized tax platform of accelerated Capital Cost Allowance (CCA) rates and Investment Tax Credits (ITC).

Canada has significant domestic coal resources. It is home to 10 billion tonnes of coal reserves – enough to produce more energy than all of its oil, natural gas and oil sands combined. Canada is also is well suited in some parts of the country for underground injection and storage of CO2. The Western Canada Sedimentary Basin, which underlies roughly 1,400,000 square kilometres of Western Canada, has significant potential for the sequestration of CO2. However, technological performance improvements and reductions in costs are required in order for CCS to become widely commercially viable in Canada.

The Government of Canada is supportive of CCS development and has funded research and development as well as demonstration projects. The Clean Energy Fund has committed $650 million to carbon capture and storage projects that are at or near full commercial scale, and the Government of Canada is co-funding a number of individual projects. Under the ecoENERGY Technology initiative, up to $140 million will be invested in these projects to support industry-led research, development and demonstration of CCS technologies. The Province of Alberta has also funded projects in CCS from a $2 billion fund. However, more research and development funding is needed along with changes to federal tax regulations to encourage the commercial development of projects utilizing a variety of new CCS technologies. Canadian industry is working with federal and provincial officials to ensure that the role of government in developing and deploying CCS is successful.

An improved ability to develop low carbon technologies that are presently non-commercial will serve Canada well by placing the country at the forefront of critical technology development for economies dependant on coal. New technologies are needed to move Canada faster towards a low carbon future and round out the great environmental advantage we already enjoy by having over 75% of our electricity generation from non-emitting hydro and nuclear. The electricity system is part of the energy backbone of the Canadian economy, its competitiveness, and its ability to attract international capital. Because the US and Canadian electricity grids are so interconnected, all of North America benefits.

Pierre Guimond

President and CEO

Canadian Electricity Association

» Login or register now to comment!

» Already a member? Login now to comment!

» Not a member? Register to comment!

Like it?

JeremyCooper said:

Research and demonstrations are not enough. China and Russia proved that central planning does not work well and there is a problem at the heart of cap and trade; who gets the initial allocation of the right to emit or the revenue from auctioning it? It is clear from the response of oil and coal price to minor excess demand just before the boom turned to crunch, that we are prepared to pay almost anything to sustain our energy consumption. The rights to emit will be worth trillions of dollars and sustainable worldwide agreement on who is entitled to sell them will be virtually impossible.

There is a better way that all nations should find attractive and easy to agree to without protracted negotiation.

Energy saving, nuclear, renewables, electric cars etc. are only ways of filling the energy gap that cutting carbon dioxide emissions will create and mankind has been very effectively filling energy gaps for centuries without the aid of agreed national or global strategies, taxes or caps. Carbon capture is different. It is a way of stopping pollution and will always add cost. You can legislate to stop pollution (which is economically inefficient) or you can use market forces by giving credits in a cap and trade system, credits against a carbon tax or by paying directly in fuel prices as I propose. If we drive carbon capture in these ways all the other things will happen too.

We should oblige fossil fuel producers and importers to contract for the capture and sequestration of a quantity of carbon dioxide equal to a proportion of that produced from the fuel they supply. The proportion could start at a few percent and build up. This would provide full, immediate funding for carbon capture and storage and increase fuel price, encouraging energy saving, nuclear, renewables, electric cars etc.

The contract might permit capture to be delayed for a year if the quantity captured were increased by 10%, and for another year for another 10% etc. This would not only help with plant problems, but would also allow contracts to be placed today, providing a huge incentive to get carbon capture and storage up and running as soon as possible. It is not lack of know-how that is holding back carbon capture but the lack of an incentive to apply it.

We must soon stop carbon emissions from power generation, cement manufacture etc. and substitute electricity for fuel use in many domestic, industrial and transport applications. Taxing carbon, capping emissions or contracting for carbon capture when fuel is produced could all provide the economic incentive but unless the rest of the world joins in they will not solve the problem.

Contracting for carbon capture is guaranteed to reduce carbon dioxide emissions to whatever annual target is set and is easy for everyone to agree to because:

 It will appeal to rapidly growing and mature countries alike. There are no national caps to restrict relative growth.

 It will allow all industries in all countries to compete on a level playing field. There are no carbon tax or carbon credit differentials.

 Because there is only one number to agree, the global annual target, extensive international negotiations will be unnecessary. There will be no national targets to haggle over and perhaps never meet. There will be no issue about who gets the revenue from a carbon tax or what the rate should be or who gets free allowances (or the revenue from an auction) with cap and trade.

 Enforcement is straightforward and does not rely on the co-operation of every country. The contracts would be traded and recorded centrally, mostly placed and paid for by the international energy companies. If countries were uncooperative and used their own fuel internally without contracting for carbon capture, a central monitoring organisation could impose an increased capture proportion on imports or exports of fuel for that country to compensate.

So what will it cost? The simple answer is that carbon capture and storage could cost 50 euros per tonne of carbon dioxide emission avoided. This is equivalent to $32/barrel of oil but the contract would only cost a proportion of that.

The complicated answer is that it is only practical to capture carbon dioxide from large point sources like power stations. Forcing 75% capture on the global market through my proposal would drive fuel price up and electricity price down until we switched from fuel to electricity for many industrial, domestic and transport applications.

The simple cost is modest compared to recent price changes so why are we waiting? Perhaps within as little as twenty-five years we could be defining the proportion of carbon to be captured, based on fossil fuel production at the time, such that global emissions were contained at the level that the oceans absorb annually. That is about 2.2 billion tonnes of carbon per year (25% of current emissions). Atmospheric carbon dioxide concentration would then stop rising.

Why not move on to capped fuel production with a saleable additional allowance for carbon dioxide capture, once nearly all power stations etc. have stopped their emissions? This could still be based around a global target and implemented at the point of production. It would avoid the incentive to build new power plant simply to create more carbon to capture (and then dumping the electricity on the market) when perhaps nuclear or wind would have been cheaper. But this takes us back to the problem we started with; who gets the revenue from auctioning the basic allowances. Fuel producers could well decide to form a cartel, cut supply to the required level and do the whole job for the rest of us, keeping the premium for themselves.

» Login or register now to comment!

Tue, 2009-11-24 10:07 — JeremyCooper

Please note: Your first comment as a registered user will be held for moderation up to 24 hours (usually less). For more information about comments on our site, please read our FAQ and terms of use.