EU Energy Policy Blog

Coal is often considered as an energy source of the past, mainly due to its environmental effects in a more-and-more carbon constrained world. Whereas coal represents 42% of the worldwide energy and heat generation, it accounts for 68% of the CO2 emissions in this sector. However, according to the most recent interdisciplinary MIT Study “The Future of Coal”, coal might well turn out to be a solution to the CO2-issue, and not a problem thereof. The thrust of the MIT study is that coal has a high potential in future energy supply, once new technology to reduce CO2-emissions from coal combustion will become economic. Coal is relatively abundant, geographically broadly spread and the use of clean coal technologies could lead to a true renaissance of the oldest used fossil fuel. Also, it is often ignored in the public debate that in the Stern Report on the economics effects of climate change, coal accounts for a large part of potential CO2 reduction in the decades to come.
The MIT text itself provides an impressive piece of interdisciplinary research. Paul Joskow was part of the team, which was co-chaired by Jon Deutch and Ernest Moniz, both former under-secretaries of the Department of Energy. The study also proves that only interdisciplinary work can grasp with the complexity of the issue, and provide sustainable solutions.
Back to the study: the fact of the matter is that 40% of the global carbon dioxide emissions are due to coal, and the use of coal increases rapidly. Thus, China alone is currently constructing the equivalent of two 500 megawatt coal-fired power plants per week and a capacity comparable to the entire UK power generation park each year. But also other countries, such as the U.S., India and Russia rely heavily upon electricity from coal. It is suggested that the use of coal be adapted to the new carbon constrains, rather than be phased-out.
Carbon capture and sequestration (CCS, hereafter) requires two technical processes: the separation and capture of the CO2 at the power plant and the transport to and sequestration in geological reservoirs in the earth’s upper crust. The MIT study illustrates the effect of CCS and emission taxes on the use of coal. The results are that some form of CO2 emissions price is necessary to provide incentives to implement CCS technologies. But as the timing and level of CO2 emissions are uncertain as well as the estimate of CCS cost, the study recommends that governments provide assistance for demonstration projects and support R&D programs on CCS.
Considering the technical and economic issues of CCS, the study points out that it is a false assumption to believe that today CCS is a demonstrated and available technology for very large scale sequestration. There are several technical aspects to be considered. For example, the storage mechanism must be properly understood and the movements of CO2 must be monitored, leakage must be prevented and it has to be proven that there is enough capacity of reservoirs. Nevertheless, the authors of the MIT study are confident that large-scale CO2-injection projects can be operated safely. Indeed, CCS projects are currently being operated in Norway, Canada and Algeria, but they are not suited to solve the outstanding technical issues at scale. Therefore, the MIT recommends that three large-scale sequestration projects should be implemented in the US and about 10 worldwide because of the variety of geological reservoirs that need to be analyzed. The cost per project would be about $15million/year for a ten year period. Governments and agencies should also implement a regulatory framework for issues like requirements, monitoring or liability transfer to the government.
Regarding the economic issues of carbon capture, there is a variety of options for coal power plants like pulverized coal plants, integrated gasification combined cycle (IGCC, hereafter), and Oxy-Fuel. The main problem with the integration of CCS in power plants is efficiency losses which, along with the additional investments, increase the costs of generating electricity. As there are alternative technologies, the MIT recommends that government should provide assistance for 3 to 5 demonstration plants with CCS and that all options should be considered and examined and not only the IGCC, preferred by the US, or the European Oxy-Fuel. Such a program would give the possibility to choose the most suitable, efficient and low-cost alternative for power plants with CCS. Construction of new coal plants without CCS should not be encouraged.
The quantitative effects of CSS on CO2 emissions are drastic. They are calculated using a MIT’s model taking into account technology policy. In the business-as-usual case, CO2-emissions from coal increase from 9 Gt/year (2000) to 32 Gt/year by 2050; by contrast they fall to 3-5 Gt/year in 2050 with the large-scale deployment of CCS-technology.
In a previous Energypolicyblog.com’s contribution, we discussed whether EU energy policy would soon be made in China and India. The MIT-Study hints in the same direction: without the active participation of emerging countries, mainly China and India, there is no way to achieve the above-mentioned objectives in terms of CO2 abatement. In order to understand how to involve China, the biggest coal consumer, in the global effort to reduce CO2-emissions, the MIT researchers analyze the Chinese energy sector and especially the behavior of its players. The Chinese energy policy takes place at a local, but not a centralized national level. Coastal provinces and their growing industries face a huge electricity demand that has to be responded to quickly. Rather than investing in clean coal technologies the coastal provinces are investing in LNG infrastructure in order to reduce their dependence on coal from the inner provinces. Today, China’s lack of a strong central coordination makes it difficult to enforce environmental policies or to implement CCS-technologies. But the central government’s awareness for the energy issues is now growing and it will regain influence in energy policy. This, along with the Chinese tolerance for new experiments and the foreign commercial influence, could lead China to a sustainable energy path.
The MIT study also analyzes India, today consuming the equivalent of one-fifth of the coal consumed in China. Coal-based generation capacity is expected to grow as India faces severe electricity shortages and decision making units call for new coal power plants. The central government in India and the national power company play an important role in the energy policy. Given the early stage of energy sector development, MIT researchers conclude that there still is a possibility to implement cleaner coal technologies before the anticipated growth in coal use occurs.
Coal is a secure and abundant energy resource for Europe and the US, but it is inherently dirty. Will the U.S. and Europe be willing and able to adopt CCS technology?

Christian von Hirchhausen, Clemens Haftendorn, Anne Neumann

This entry was posted on Friday, May 4th, 2007 at 3:19 pm and is filed under Energy Policy, English. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.