‘VIRTUALLY NO’ CCS UNDER BINGAMAN’S CES, ACCORDING TO EIA ANALYSIS

Lindsay Kalter
GHG Monitor
05/04/12

The Energy Information Administration (EIA) projects that even under a national Clean Energy Standard (CES) that would award nearly full credits to coal plants equipped with carbon capture and storage capabilities, those plants would have a practically nonexistent role in total power generation. The EIA analysis, released this week, was conducted to determine what the power landscape might look like under Senate Energy and Natural Resources Committee Chairman Jeff Bingaman’s (D-N.M.) "Clean Energy Standard Act of 2012" (BCES12), which was introduced in March.

The legislation aims to award large utilities that produce electricity from renewables, nuclear and natural gas with whole or partial credits based on carbon emissions. Advanced coal plants with a carbon intensity lower than .82 metric tons per MW/hour—or the equivalent of supercritical coal technology—as well as industrial efficiency projects, combined heat and power and waste-to-energy units would also be eligible for partial credits, with a greater number of credits going to generators with lower emissions per unit of electricity. Partial credits awarded to systems fueled by natural gas or coal would be based on the net emissions of each unit.

Previous Report Included Coal-fired Generation

The absence of CCS-related energy production in the report deviates from a previous EIA analysis released in November 2011, which was conducted at the request of Bingaman before the legislation had been drafted. The earlier report was based on President Barack Obama’s goal of having 80 percent of the country’s energy generation come from ‘clean’ sources by 2035. It projected that, given the assignment of 0.9 credits to CCS-modified fossil fuel generation, 47 gigawatts of coal capacity would be retrofitted with CCS equipment by 2035. However, the latest analysis states that “there is virtually no generation from plants that use carbon capture and sequestration technologies under the BCES12, even though CCS technology is awarded nearly a full credit under the BCES12 specification.”

Natural Gas Could be Pushing Out CCS

Before the legislation was unveiled, a staffer from the Senate Energy and Natural Resources Committee told GHG that “carbon capture is going to be in,” adding “for the people who didn’t want to see a CES because of fears that gas might kick coal out of the mix, the baseline is going to be more efficient coal plants.” However, Bill Wicker, director of communications for the committee, said he suspects the role of gas is precisely the reason behind the report’s minimal mention of CCS. “Apparently they’re projecting that utilities won’t be moving in the direction of CCS,” Wicker told GHG this week. “With the arrival of gobs and gobs of natural gas, a lot of coal-fired generation—rather than investing in CCS—is going to be switching over to natural gas.”

Nuclear generation would also get a significant boost under BCES12, according to the report, with more than 80 gigawatts of capacity being added by 2035. Energy generation would see an increase in coal-fired plant retirements, reaching 97 gigawatts by 2035.  “The relatively high credit price combined with the need for additional baseload capacity and CES-compliant generation all contribute to the significant nuclear capacity additions in the latter part of the forecast,” the report states.

The analysis also projects that changes in electricity prices will not be evident until 2020, when the BCES12 requires a shift in focus from biomass and natural gas facilities that are already online to expenditures for new nuclear, renewable and combined cycle generation. The average end-use price of electricity would be 18 percent higher by 2035, according to the report. However, the report says price changes will depend on various factors including the number of exempt electricity providers and state-specific regulations.