Showing posts with label Carbon Capture. Show all posts
Showing posts with label Carbon Capture. Show all posts

Monday, May 26, 2014

The Kemper Plant and Carbon Sequestration

from Mississippi Power
Last September the U.S. Environmental Protection Agency (EPA) revised their proposed Clean Air Act standards to cut carbon pollution from new power plants. Under the revised proposal, new coal-fired electrical generation turbines would need to meet a limit of 1,100 pounds of CO2 per megawatt-hour. Existing coal –fired electrical generation turbines emit about 2,080-2,180 pounds of CO2 per megawatt-hour of power produced. All existing plants would be grandfathered and exempt from this rule for a period of time, but the EPA was expected to propose CO2 limitations for existing power plants next month. Increased regulation on existing plants was to occur after demonstration of the commercial use of a kind of carbons capture and sequestration (CCS) technology called Transport Integrated Gasification (TRIG™) technology at a newly built power plant in Kemper County, Mississippi. This TRIG technology was developed by Southern Company (the parent of Mississippi Power) and KBR in conjunction with the Department of Energy (DOE).

TRIG is a coal-gasification method designed to be cleaner (capturing 65% of CO2), cheaper and to work with lower rank coals like the Mississippi Lignite. However, the construction of this new technology plant has been besieged with problems and cost and timing overruns as details such as pipe thickness and metallurgy were miscalculated in the initial design. Originally, the project was estimated to cost $2.4 billion to build the 582,000 kilowatts plant that translated to $4,123 per kilowatt (before DOE grants and tax credits). Now, however, the Kemper plant is projected to be delayed another year until May 2015 and to cost $5.5 billion or $9,450 per kilowatt, and the technology has not even been demonstrated to work on an industrial scale, yet.
from Mississippi Power


Mississippi Power, the smallest utility subsidiary of Southern Company, owns the plant and can only recover up to $3.8 billion for the Kemper costs through customer rates and the sale of securitized bonds. Customers began paying 22% higher utility rates for their power to Mississippi Power after the Kemper plant was allowed into the cost base last year after a lengthy regulatory battle. Meanwhile, Southern Company/ Mississippi Power has taken a $1,037,000,000 charge (so far) against earnings to write off costs overruns that cannot be recovered. The EPA has described carbon capture and sequestration as an available technology that will increase the capital cost of every new coal plant built in the United States by only 35%, but the cost overruns at Kemper have more than doubled the cost of the plant and brought the cost of building a coal fired electrical turbine to about nine times the cost of a gas fired turbine.

Regulating CO2 emissions from power plants are all part of the President’s Climate Action Plan that directs all federal agencies to address climate change using existing executive authorities. The EPA is the lead regulator of the plan to cut carbon pollution. The Plan has three key pillars: cutting carbon pollution in the United States; preparing the country for the impacts of climate change; and leading international efforts to combat global climate change. Power plants are the largest concentrated source of emissions in the United States, accounting for roughly one-third of all domestic greenhouse gas emissions. The Energy Information Agency (EIA) most recent preliminary data through March 2013 show coal has generated 40% or more of the nation's electricity each month since November 2012, with natural gas fueling about 25% of generation during the same period. In 2012 natural gas had accounted for a larger share of power generation than in 2013, but fuel costs and power demand during the recent harsh winter increased the power generated by coal fired power plants.
from EIA
The Kemper plant will not be abandoned; it will be completed and will be operated. Southern Company or Mississippi Power, the operating subsidiary, (and possibly bond holders) will have to write off an additional $700 million or more, but the Kemper plant once it’s completed and running will have operational cost advantages. The plant is adjacent to a new coal mine with over 4 billion tons of lignite and near to old Mississippi oil fields. Lignite coal after drying out for three days is fine for the type of plant Southern is building and can supply the plant for centuries. The old oil fields offer an opportunity to sell the CO2 for enhanced oil recovery. Kemper’s pressurized and liquefied carbon dioxide will be used to enhance oil recovery and is estimated to increase oil production by 2 million barrels a year. Liquefied CO2 is valued at around $40 a ton right now and Kemper is projected to capture about 3-3.5 million tons a year.

The Kemper plant when it is finally completed will have a base coal-fired capacity of 524,000 kilowatts and natural gas capacity 58,000 kilowatts. The plant will capture 65% of total CO2 emissions resulting in 3-3.5 million tons per year of captured CO2 and reducing the CO2 emissions per megawatt to under 800 pounds if the plant performs as designed. The Kemper plant will also have fewer particulate, sulfur dioxide and mercury emissions than traditional pulverized coal plants making it the cleanest coal plant ever built.

The utility rate payers and shareholder will both share in the high cost of this project. You and I threw in a little bit, too. Mississippi Power received a $270 million grant from the Department of Energy for the project and $133 million in investment tax credits approved by the Internal Revenue Service. Although by missing its projected deadline it will loses some of the tax benefits.
from Mississippi Power


Monday, September 23, 2013

Carbon, Coal and Government Action

As expected the U.S. Environmental Protection Agency (EPA) last Friday once more proposed Clean Air Act standards to cut carbon pollution from new power plants. Under the new proposal, new large natural gas-fired turbines would need to meet a carbon dioxide (CO2) limit of 1,000 pounds of CO2 per megawatt-hour, while new small natural gas-fired turbines would need to meet a limit of 1,100 pounds of CO2 per megawatt-hour. New coal-fired units would need to meet a limit of 1,100 pounds of CO2 per megawatt-hour, and would have the option to meet a somewhat tighter limit if they choose to average emissions over multiple years. All existing plants and currently permitted and built in the next 12 months will be grandfathered and exempt from this new rule for a period of time.

This new proposal is a revision (and slight loosening) of the proposal made in March by the EPA. This is part of the President’s Climate Action Plan that directs all federal agencies to address climate change using existing executive authorities. The EPA is the lead regulator of the plan to cut carbon pollution. The Plan has three key pillars: cutting carbon pollution in the United States; preparing the country for the impacts of climate change; and leading international efforts to combat global climate change. Power plants are the largest concentrated source of emissions in the United States, accounting for roughly one-third of all domestic greenhouse gas emissions. While the United States has federal limits on arsenic, mercury and lead pollution that power plants can emit, currently, there are no national limits on the amount of carbon pollution power plants can emit. This is the first federal regulation to limit CO2.

Despite the progress being made on the carbon capture and sequester system that’s being developed by Alliant Techsystems and partner ACENT Laboratories to sequester carbon from coal fired power plants before it enters the atmosphere, the cost of capturing CO2 from power plants is currently too high for wide-scale implementation, and for now there will be no more coal fired power plants built. The continued existence of coal fired power plant will depend on developing more affordable technologies for carbon capture, utilization and storage (CCUS). The Department of Energy (DOE) Loan Programs Office is has launched a new loan guarantee program with $8 billion in loan guarantees available to develop new technologies.

The program seeks to make loans to advance the technology in three primary areas. Advanced Resource Development; projects that employ new or significantly improved technologies that avoid, reduce, or sequester air pollutants or greenhouse gas emissions from the development, recovery, and production of traditional and non-traditional fossil energy resources. Carbon Capture to selectively remove CO2 from process streams and flue gases, and produce a concentrated stream that can be compressed and transported to a permanent storage site. Third, because natural gas electricity generation produces a flue gas with low concentrations of CO2, and, therefore, making the adoption of carbon capture expensive and inefficient, the DOE is looking to finance the development of Low-Carbon Power Systems that utilize natural gas for electricity generation using novel processes or improved technologies that can integrate with CO2 storage or beneficial reuse. For now, the fuel of choice for all future power capacity additions will be natural gas, nuclear, or the renewable category (with government subsidies).

All federal agencies are required, “to assess both the costs and the benefits of intended regulation and, recognizing that some costs and benefits are difficult to quantify, propose or adopt a regulation only upon a reasoned determination that the benefits of the intended regulation justify its costs.” To justify the costs to the economy to implement the Presidents Climate Plan, the agencies use the “social cost of carbon” (SCC) to quantify the social benefits of reducing carbon dioxide (CO2) emissions into cost-benefit analyses of regulatory actions that in reality have only tiny impacts on cumulative global emissions. At this time in history the global emission of CO2 that are being driven by the growth in emission in the emerging markets of China and India.

The SCC is an estimate of the dollar damages associated with an incremental increase in carbon emissions in a given year to the global economy. It includes estimated changes in net agricultural productivity from changes in temperature and precipitation patterns, human health, and property damages from increased flood risk, loss of land from rising sea levels and the value of ecosystem services due to climate change. According to the National Academies of Science (NRC 2009) any assessment of the social cost of carbon will suffer from “uncertainty, speculation, and lack of information about (1) future emissions of greenhouse gases, (2) the effects of past and future emissions on the climate system, (3) the impact of changes in climate on the physical and biological environment, and (4) the translation of these environmental impacts into economic damages. As a result, any effort to quantify and monetize the harms associated with climate change will raise serious questions of science, economics, and ethics.”

Nonetheless, an interagency group made up of the EPA, the Departments of Agriculture, Commerce, Energy, Transportation, and Treasury with input from the Council on Environmental Quality, National Economic Council, Office of Energy and Climate Change, and Office of Science and Technology Policy selected three assessment models (IAMs) commonly used to estimate the SCC on future global gross domestic product (GDP) and assigned a range of costs for a metric ton of CO2 based on the percentage of the global economy that we represent. The models used were: the FUND, DICE, and PAGE models. These models are used in the Intergovernmental Panel on Climate Change (IPCC) assessments. The models produced a range of four estimated costs that were used for the social cost of carbon.

These models combine aspects of the climate change models, economic growth models, and feedbacks between the climate and the global economy into a single modeling framework, though there is only a limited amount of research linking climate impacts to economic damages. Underlying the models are a number of simplifying assumptions and judgments reflecting the various modelers’ best attempts to synthesize the available scientific and economic research and opinions characterizing these relationships and to translate global warming into damage estimates.

One of the most important factors influencing SCC estimates is the discount rate assumed. A large portion of climate change damages are expected to occur many decades into the future and the present value of those damages (the value at present of damages that occur in the future) is highly dependent on the discount rate assumed. Though there have been updates in the damages based on additional work relating to rising sea levels since the development of the SCC in 2010 the assumptions for the discount rate were not revisited. The SCC is actually a range consisting of four scenario estimates for the year 2020. In 2010 when interagency group first reported the SCC estimates, they were $7, $28, $44 and $86 per metric ton (2011$). This year the estimates were revised and the corresponding four scenario SCC estimates for 2020 were $13, $46, $69, and $137 per metric ton (2011$). The average SCC increased from $41 to $66 and increase of over 60% enabling a significantly larger positive benefit to be estimated from any carbon reducing regulation.

Monday, July 2, 2012

Carbon Capture- Will It Save Us?


Last week a three-judge panel of the U.S. Court of Appeals in Washington ruled that the U.S. Environmental Protection Agency, EPA, had “substantial record evidence” that greenhouse gases probably caused the climate to warm over the past several decades, the EPA had concluded that greenhouse gases are pollutants that endanger human health in 2009.  Opponents to that determination had essentially asked the Court to re-weigh the scientific evidence before EPA and reach their own conclusion. However, the three judge panel wrote in the opinion for the case that. “(t)his is not our role.”

 Back in  December 2009,  the EPA officially found that greenhouse gases in the atmosphere threaten the public health and welfare of current and future generations the agency,  and started on the path to regulate carbon dioxide, CO2, after the  "American Clean Energy and Security Act”, also known as the Waxman-Markley energy bill was defeated in the Senate. After collecting CO2 emission data from industry the EPA “found” in 2012 that the largest carbon dioxide generators are the largest stationary combustion sources. It was no surprise that the largest (coal) electrical generation and industrial plants in the nation- big furnaces generate more CO2. For the past decade electrical generation has accounted for approximately 40% of the carbon dioxide emissions in the United States and worldwide. At the end of March 2012, the EPA proposed the first Clean Air Act standard for CO2 rule targeted at power plants.  The agency plans to phase in industrial facilities covered by the carbon rules through 2016. Under the new rule, new power plants will have to emit no more than 1,000 tons of CO2 per megawatt-hour of energy produced. That standard effectively changes the fuel of choice for all future power capacity additions to natural gas, nuclear, or the renewable category (with government subsidies). All existing plants and currently permitted and built in the next 12 months will be grandfathered and exempt from this new rule for now.

Coal electrical generation plants currently produce about 1,800 pounds of carbon dioxide per megawatt-hour of electricity. EPA says the CO2 rule that requires new plants to produce no more than 1,000 pounds of CO2 per megawatt-hour as creating “a path forward for new technologies to be deployed at future facilities that will allow companies to burn coal, while emitting less carbon pollution.” The EPA in their new regulations and Department of Energy, DOE, in their research grants are pushing forward on the development of Carbon Capture. In June the International Energy Agency, IEA, released its preliminary 2011 estimates of world CO2 emissions from fossil fuel combustion. World CO2 emissions rose by 1 billion metric tons, a 3.2 % increase over last year to reach 31.6 billion metric tons. The worldwide level of CO2 is now higher than the worst-case scenario outlined by climate experts just five years ago and within 1 billion metric tons of the IEA point of no return. (That is the point where mankind cannot hold global warming at 2 degrees Celsius.)
 
 In 2011 the top four world generators of CO2 emission from fossil fuels were (from highest to lowest) China, the United States, the European Union and India who edged out Russia to take the number four slot. China increased emissions contributed almost three quarters of the global increase, with its emissions rising by 720 million metric tons, or 9.3% to 8.46 billion metric tons of CO2, primarily due to higher coal consumption. India’s emissions rose by 140 million metric tons or 8.7% to 1.75 billion metric tons. Since 2000, China has more than tripled its installed capacity of coal power plants, while India’s capacity has increased by 50%. Neither country has used the most efficient designs and technologies available for those plants and those plants will continue to operate 24/7 for decades to come.

CO2 emissions in the United States, in contrast, fell by 92 million metric tons in 2011, or 1.7% to an estimated 5.32 billion metric tons. The European Union increased their CO2 emissions from fossil fuel by 69 million metric tons to approximately 3.56 billion metric tons. Japan’s CO2 emissions increased by 28 million metric tons, or 2.4% to approximately 1.19 billion metric tons, as a result of a substantial increase in the use of fossil fuels in power generation post-Fukushima tsunami. Russia and Canada reportedly remained fairly stable from the previous year. Nonetheless, the IEA still believes that it is still possible to prevent the earth’s temperature from rising more than 2 degrees Celsius if “timely and significant government policy action is taken, and a range of clean energy technologies are developed and deployed globally.” One of the key technologies according to the IEA is carbon capture.

In 2009 DOE supported eleven projects to conduct site characterization of geological formations for CO2 storage. Carbon capture is really three activities: Gathering or capturing of CO2 from point sources (power plants, industrial plants, and refineries), transporting the captured CO2 to a geological storage site, and injecting the CO2 into the ground for permanent storage and monitoring the site for eternity. Capturing and transporting CO2 from industrial plants is technologically possible but is currently prohibitively expensive, though DOE’s National Energy Technology Laboratory and several universities are exploring ways to bring down the costs or raise the costs of other energy sources.  A significant portion of the CO2 generated in the United States and the world is not generated from large stationary point sources, but from cars, homes, and smaller sites. Only about a quarter of the CO2 generated from fossil fuel combustion annually is generated at large point sources the only possible capture points. Storing even a portion of this amount of CO2 would require capturing the gas at many locations around the country and transporting it to facilities that could inject the CO2 into appropriate subsurface rock formations. According to the researchers efficient underground storage of CO2 requires that it be in the supercritical (liquid) phase to minimize required storage volume.

In order for CO2 to remain in a supercritical phase, the pressure in the storage reservoir must be greater than about 68 atmospheres and at temperatures above 31.1°C. (Sminchak et al., 2001). These conditions require that the CO2 be injected at high pressures, which can only be achieved at depths greater than about 2,600 feet below the earth’s surface. The supercritical CO2 will be injected into the geologic formations that are overlain by appropriate sealing formations and geologic traps that will prevent the CO2 from escaping as the CO2 injection well remains in continuous operation for years or decades. The volumes of supercritical CO2 envisioned for carbon capture are huge. A recent U.S. National Research Council report suggests that carbon capture and deep earth sequestering could potentially induce earthquakes because significant volumes of fluids are injected underground over long periods of time. However, insufficient data exists at this time to evaluate this risk. An IPCC Special Report on CO2 capture and storage suggests that between 73 and 183 million metric tons of CO2 could be captured and stored worldwide from both coal and natural gas energy plants each year (Metz, 2005).  The IPCC envision that carbon capture and well injection would take place at a number of locations, ideally places near to power plants that produce CO2 to avoid long transportation distances under pressure.

American Electric Power, AEP, participated in three DOE funded projects to advance CCS technologies. All were conducted at the Mountaineer Plant in New Haven, West Virginia (from which some of my power is supplied within the PMJ Interconnection). AEP planned to replace its pilot demonstration CO2 capture plant with a larger $668 million Carbon Capture and Storage facility, which would have buried more than 1 million metric tons of CO₂ a year, splitting construction costs evenly with the DOE, but failed to obtain the consumer rate increases necessary to fund the experiment. The project has been discontinued. In 2010 there were almost 1,400 coal fired electrical generating units in the United States if each were to be converted to carbon capture operation the total cost would be almost a trillion dollars in construction costs (assuming no cost over runs) and capture 1.4 billion metric tons of CO2 per year. This would represent 26% of the net annual CO2 emissions of the United States and increase average electrical rates 25% nationally for just building the units. Electrical rates would have to increase more if there were any annual operating costs of the Carbon Capture unit. Actual rate increases would be regional.  

The AEP projects were demonstrations of Alstom’s Chilled Ammonia Process for Post-Combustion CO2 Capture. The process uses ammonium carbonate to absorb CO2 and create ammonium bicarbonate. This resulting ammonium bicarbonate is converted back to ammonium carbonate in a regenerator and is reused to repeat the process. The flue gas, cleaned of CO2, but with the tell-tale smell of the ammonia reaction, flows back to the stack and the captured CO2 is sent for storage. Once captured, the CO2 is compressed into a liquid state and is injected 1.5 miles beneath the earth’s surface. Several major pilot projects, in Europe have also been cancelled in the last few years because of doubts over their financial and technical viability. Some are still under consideration for EU and government funding, but the need to rescue the Euro and European Banks has taken the financial resources of the European Union. Ayrshire Power in Scotland, blamed their cancelled plans for a new carbon-capture power station at Hunterston on the recession and anxieties about winning funding from the government and the same reasons were given for the cancellation of the Longannet power station in Fife.

 Globally, only a few, small-scale commercial carbon capture projects are in operation. The oil and gas fields in the North Sea are the site of the world’s first offshore commercial CO2 capture and storage project. Carbon dioxide is captured at a plant located on the offshore natural gas platforms and is stored underground in a sandstone well approximately 2,600 feet below the sea bed. The CO2 tax levied on offshore oil and gas operations by the Norwegian government made the project worthwhile and the drilling rig and available aquifer made it possible. CO2 is removed from the natural gas produced at the Sleipner field in the North Sea and re-injected it into a very porous, permeable sandstone and saline aquifer above the oil and gas reserves. Approximately 1 million metric tons of CO2 have been stored each year since 2000 when the system went into operation. This is just a small fraction of the 31.5 billion metric tons of CO2 released into the atmosphere each year.  It appears as if the United States has passed the point of peak CO2, but the atmosphere of the earth is interconnected and China and India appear to be increasing their CO2 emissions by 860 million metric tons a year. It matters what kind and how efficient a power plant is installed in China or India since they will be sending particulates and CO2 into the atmosphere for decades. Nonetheless, we have no control over the growth in India and China’s coal fired power supply, nor in the abandonment of nuclear power by Germany, Belgium, Switzerland and Japan in the next decade in response to the damage to the nuclear reactors that occurred in the Japanese Fukushima tsunami.