King coal, II: Administration restructures approach to clean coal funding

To ensure a clean, reliable and affordable energy future, the Department of Energy is planning the largest budget request in over 25 years focusing on demonstrating advanced technology like carbon capture and storage so that the technology can be perfected and rapidly deployed across the country.”

DOE issued a Request for Information (RFI) which seeks industry’s input by 3 March 2008, on the costs and feasibility associated with building clean coal facilities which achieve the intended goals of FutureGen. Following this period and consideration of industry comment, DOE intends to issue a Funding Opportunity Announcement — or competitive solicitation — to provide federal funding under cooperative agreements to equip IGCC (or other clean coal technology) commercial power plants that generate at least 300 megawatts, with CCS technology aimed at accelerating near-term technology deployment. Initial input from industry will assist in determining how many demonstrations can be commissioned. DOE says that this restructured approach allows DOE to maximize the role of private sector innovation, provide a ceiling on federal contributions, and accelerate the administration’s goal of increasing the use of clean energy technologies to help meet the growing demand for energy while also mitigating greenhouse gas emissions. Under this plan, DOE’s investment would provide funding for no more than the CCS component of the power plant — not the entire plant construction, compared with the FutureGen concept announced in 2003, which called for the federal government to incur 74 percent of rising costs. This would allow for commercial operation of IGCC power plants equipped with CCS technology to begin as soon as the plants are commissioned, between 2015 and 2016.

The FutureGen concept announced in 2003 planned the creation of a near-zero emissions, 275 MW power plant which produced hydrogen and electricity from coal on a smaller-than-commercial-scale, serving as a laboratory for technology development. DOE says its last week’s announcement builds on advancements in technology made since 2003 and allows for electricity to be produced and greenhouse gas emissions sequestered at a rate and scale that offers tremendous potential for commercial viability. The restructured approach will focus on separating carbon dioxide (CO2) for CCS, and does not include hydrogen production, which the concept announced in 2003 included; however, hydrogen production for commercial use will remain an important component of DOE’s other energy initiatives. Also, engagement with the international community will remain an integral part of DOE’s efforts to advance CCS technology on a global scale.

The four sites — two in Illinois and two in Texas — evaluated in DOE’s Environmental Impact Statement issued in November 2007, including the site announced by the FutureGen Alliance in December 2007, Mattoon, Illinois, may be eligible to host a commercial-scale IGCC plant with CCS technology. The site analysis and characterization data at these sites may be applicable to future environmental analyses under this restructured approach. More than one site may be selected as a host for the commercial demonstration of CCS technology and DOE encourages applicants to include these four sites in their consideration for this restructured approach. Also, the FutureGen Alliance’s thirteen member companies may compete with all the other applicants.

DOE’s restructured approach builds on the administration’s investment of more than $2.5 billion in clean coal technology since 2001, which includes small-scale carbon sequestration projects and IGCC research that have advanced our understanding of the potential for clean coal technology. It is also consistent with a key recommendation of last year’s Massachusetts Institute of Technology Study, “The Future of Coal,” which indicated that “the main purpose of the [FutureGen] project should be to demonstrate commercial viability of coal-based power generation with CCS.” The administration’s Clean Coal Power Initiative, as well as awards of $1.65 billion in clean coal tax incentives, and the use of loan guarantees, are other key components of DOE’s efforts to demonstrate the potential of advanced clean coal technologies to meet growing energy demand.

Tomorrow: Clean coal — the facts