30 November 2006
United States Advances $1 Billion for Clean Coal Projects
Environmentally sound use of resources at stake, Energy Department says
By Andrzej Zwaniecki
Washington File Staff Writer
Washington – The Bush administration has awarded $1 billion in federal tax credits to utility companies for clean-coal power generation as part of a broad U.S. strategy to move toward emission-free energy.
The tax credits, authorized by the energy law passed by Congress in 2005, were awarded November 30 to nine companies mostly for advanced coal and gasification projects using a process called integrated gasification combined cycle (IGCC). An additional $650 million in tax credits for similar projects will be available in 2007, according to an Energy Department fact sheet.
Briefing reporters the same day, James Connaughton, the chairman of the White House Council on Environmental Quality, called the action the largest step to broad commercialization of clean-coal technologies.
He said the United States is well on the way to meet its stated goal of reducing greenhouse gas (GHG) intensity of its economy by 18 percent by 2012 through the use of these and other clean-energy technologies as well as measures to increase energy efficiency. GHG intensity is the ratio of greenhouse gas emissions to economic output.
About half the credits will help fund construction of IGCC plants. IGCC, based on a process in which coal is converted into a gaseous fuel through partial oxidation, is the most environmentally friendly technology for coal-fired power generation available today, according to the Cooperative Research Center for Coal in Sustainable Development. The center is part of an Australian public-private partnership.
Coal gasification offers the opportunity to generate power with near-zero greenhouse gas emissions and is one of the pathways to a future hydrogen economy, the center said in its presentation of the technology.
The wide-scale commercialization of these and other clean-coal technologies can help slow down, stabilize and eventually reverse “atmospheric trends” caused by greenhouse gas emissions, according to an Energy Department fact sheet.
Many scientists believe that greenhouse gas emissions contribute to global warming.
INCENTIVES PROMOTE ENVIRONMENTALLY FRIENDLY USE OF COAL
Energy Secretary Samuel Bodman, who made the announcement, said that the energy content of abundant U.S. coal resources is higher than that of “nearly all the oil in the world.”
“These tax credits will help us find ways to use coal in an environmentally sensitive way,” he said.
Because coal is both plentiful and relatively cheap in the United States and in some other countries such as China, it is expected to remain the main source of electricity generation for decades to come, the department said. The portion of power generated from coal in overall electricity production is projected to increase in the United States from the current 50 percent to 57 percent by 2030 as demand for electricity grows.
The department said it believes that incentives such as tax credits will accelerate the widespread use of advanced technologies that allow electricity to be generated from coal more efficiently and with fewer harmful environmental effects. IGCC and other advanced technologies are expected to extract 55 percent to 60 percent of coal’s energy content compared to 35 percent in existing, modern coal-fired plants, Connaughton said.
The president of Tampa Electric, one of the tax credit recipients, said that incentives also would bring “significant savings” to customers. Tampa Electric was the first U.S. utility company to commercialize IGCC technology in partnership with the department.
The Energy Department said the overall U.S. strategy to make the best and most efficient use of coal in power generation also includes investing in carbon sequestration (capturing and storing carbon dioxide); supporting further modernization of existing power plants; making sure that new plants have the most efficient and environmentally friendly equipment; and building the first virtually emission-free coal power plant known as FutureGen.
The FutureGen plant is intended to deliver electricity at competitive prices and with nearly no greenhouse gas or other emissions by combining a range of innovative technologies such as carbon capture and storage. The construction of the plant is expected to start in 2009 and conclude in 2012. The plant will be operated by an international consortium, which includes companies from Australia, China and the United Kingdom.
For additional information, see related articles on FutureGen and carbon sequestration, as well as the electronic journal Clean Energy Solutions.
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