Cornerstone Volume2 Issue4

8/17/2019 Cornerstone Volume2 Issue4

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The Energy Frontierof Combining Coal andRenewable Energy Systems

WINTER 2014

VOLUME 2 ISSUE 4 THE OFFICIAL JOURNAL OF THE WORLD COAL INDUSTRY

Developing Country

Needs Are Critical to a

Global Climate Agreement

The Flexibility of German

Coal-Fired Power Plants

Amid Increased Renewables

Exploring the Status

of Oxy-fuel Technology

Globally and in China

Stephen MillsSenior Consultant

IEA Clean Coal Centre


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Our mission is to defend and grow markets

for coal based on its contribution to a higher

quality of life globally, and to demonstrate and

gain acceptance that coal plays a fundamental

role in achieving the least cost path to a sustainable

low carbon and secure energy future.

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level for almost 30 years. No other organisation works on a global basis

on behalf of the coal industry.

Our membership comprises the world’s major international coal

producers and stakeholders. WCA membership is open to organisations

with a stake in the future of coal from anywhere in the world.

The WCA has recently appointed Harry Kenyon-Slaney, Chief Executive

of Rio Tinto Energy, as its new Chairman. It is an exciting time for the

WCA and for the global coal industry. If you have an interest in the

future of the coal industry, contact us to see how you can get involved:

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Companies

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& Renovation Organization

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3/80 www.cornerstonemag.net 1

Renewables and coal are the two fastest growing forms of energy today

The growth of these energy sources is parcularly prominent in developing

countries, where most expansion in electricity capacity is occurring. Coal and

renewables oen require less upfront investment, less infrastructure, and are more

widely distributed globally than other energy opons, making them ideal choices

for regions that need to add electricity capacity in the near term.

Coal and renewable energy systems can be integrated in such a way that the advan

tages of each energy source can be more fully harnessed. For instance, coal and

biomass coring and cogasicaon, the most widespread combinaons pracced

today, allow for larger, more cost-eecve plants than would be possible with only

biomass, but a smaller carbon footprint than would be possible using coal with-

out carbon capture, ulizaon, and storage (CCUS). In fact, there are many more

examples of opmized systems in which renewable and coal energy systems could

be opmally integrated.

The main issues facing increased integraon of coal and renewable energy sys

tems are not technical. Instead, they are generally instuonal. Advocates for such

integraon are few and far between. However, some of the advantages are worth

consideraon: Integraon can produce more power than a standalone renewable

plant and can be an enabling technology to get high-cost renewables, such as uncon

venonal geothermal and concentrated solar power, deployed in the near term. Yet

such projects are generally not included under renewable porolio standards or

clean energy standards. In addion, negave net greenhouse gas emissions, which

can be achieved through coring coal and biomass with CCS, are oen not recog

nized by emissions trading schemes.

The deployment of renewables is already changing the operaon of coal-red

power plants; tomorrow’s plants will need to be smarter and more responsive than

those of the past. As is being demonstrated by Germany’s eet of coal-red power

plants, rapid turndown to 25–40% of full capacity as well as rapid ramping is now

not just possible, but has become standard operang procedure.

Recently, low-carbon energy producon from coal took a major step forward with

the commencement of operaon of SaskPower’s Boundary Dam project. This

monumental CCUS project is now demonstrang that low-carbon coal is within ou

grasp. As coal and renewables grow globally, improved integraon and eciency

as well as deployment of CCUS can ensure that coal and renewables can both con

tribute to decreasing the carbon footprint of the energy sector without sacricingreliability, energy security, and eventually cost. Further demonstraon, develop

ment, and deployment will be necessary to reduce costs, which emphasizes why

increased integraon of coal and renewables must nd support within the globa

energy discussion today.

This issue of Cornerstone oers a wide range of arcles that discuss the many areas

in which coal and renewables do and could intersect. On behalf of the editoria

team, I hope you enjoy it.

Finding Common Ground

FROM THE EDITOR

Holly Krutka

Execuve Editor, Cornerstone


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CONTENTS

FROM THE EDITORFinding Common Ground

Holly Krutka, Cornerstone

VOICESThe Rise of Electricity: Oering Longevity,

Improved Living Standards, and a Healthier Planet

Frank Clemente, Penn State University

ENERGY POLICYUnderstanding the Naonal Enhanced Oil Recovery Iniave

Patrick Falwell, Center for Climate and Energy Soluons

Brad Crabtree, Great Plains Instute

Developing Country Needs Are Crical

to a Global Climate Agreement

Benjamin Sporton, World Coal Associaon

STRATEGIC ANALYSISThe Flexibility of German Coal-Fired

Power Plants Amid Increased Renewables

Hans-Wilhelm Schier, World Energy Council

Toward Carbon-Negave Power Plants

With Biomass Coring and CCS

Janne Kärki, An Arasto, VTT Technical Research Centre of Finland

Evoluon of Cleaner Solid Fuel Combuson

Christopher Long, Peter Valberg, Gradient

11

21

31

1

11

17

21

25

31

36

4 Cover Story

The Energy Frontier ofCombining Coal andRenewable Energy SystemsStephen Mills

The global demand for energy connues to increase—as the fastestgrowing sources of energy, coal and renewables are largely responsible

for meeng that demand. A Senior Consultant at the IEA Clean Coal Centre explores the projecons for coal and renewable deployment aswell as opportunies for opmizaon.



TECHNOLOGY FRONTIERSMaking Coal Flexible:

Geng From Baseload to Peaking Plant

Jaquelin Cochran, Naonal Renewable Energy Laboratory Debra Lew, Independent Consultant

Nikhil Kumar, Intertek

Geothermal Assisted Power Generaon

for Thermal Power PlantsNigel Bean, Josephine Varney, University of Adelaide

Shenhua’s Development of Digital MinesHan Jianguo, Shenhua Group Co., Ltd

Direct Carbon Fuel Cells: An Ultra-Low

Emission Technology for Power GeneraonChristopher Munnings, Sarbjit Giddey, Sukhvinder Badwal,

CSIRO Energy Flagship

Exploring the Status of Oxy-fuel

Technology Globally and in ChinaZheng Chuguang,

Huazhong University of Science and Technology

and Clean Energy Research Center

GLOBAL NEWS

Covering global business changes, publicaons, and meengs

LETTERS

VOLUME 2 AUTHOR INDEX

41

56

67

46

51

56

61

6771

73

Chief EditorGu Dazhao, Kae Warrick

Execuve EditorHolly Krutka, Liu Baowen

Responsible EditorChi Dongxun, Li Jingfeng

Copy EditorLi Xing, Chen Junqi, Zhang Fan

Producon and LayoutJohn Wiley & Sons, Inc.

CORNERSTONE (print ISSN 2327-1043,online ISSN 2327-1051) is published four mes ayear on behalf of the World Coal Associaon byWiley Periodicals Inc., a Wiley Company111 River Street, Hoboken, NJ 07030-5774.

Copyright © 2014 World Coal Associaon

Editorial OceShenhua Science and Technology ResearchInstute Co., Ltd 006 mailboxShenhua Science and Technology Park,Future Science & Technology City,Changping DistrictBeijing 102211, China

Phone: +86 10 57336026Fax: +86 10 57336014

Email: [email protected] (Chinese)Email: [email protected] (English)Website: www.cornerstonemag.net

The content in Cornerstone does not necessarilyreect the views of the World Coal Associaon oits members.

Official Journal of World Coal Industry

Published by John Wiley & Sons, Inc.

Sponsored by Shenhua Group Corporation Limited

41


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The Energy FrontierBy Stephen MillsSenior ConsultantIEA Clean Coal Centre

COVER STORY

The world is undoubtedly hungry for energy and this

hunger is growing. There are strong incenves to

develop improved sources of energy. By 2040, the

world’s populaon will have reached nearly nine billion.1 All

of these people will need to be housed, fed, and have the

opportunity to make a living; this inevitably means that much

more energy is going to be needed. By 2040, global energy

demand will be about a third greater than current levels.2 Oil,

natural gas, and coal will connue to be used widely, although

in some situaons, the increasing use of renewable energy

sources may reduce the amount of fossil fuels currently used.

Regardless, on a global basis, coal will connue to play a major

role. This will be parcularly true in some of the emerging

economies where growing industrializaon and urbanizaon

connue to relentlessly drive electricity demand upward.

“Although coal and renewable energy

sources might appear to be strange

bedfellows … we could see increased

deployment of combinations of the

world’s two fastest-growing energy

sources becoming a reality.”



of Combining Coal and

Renewable Energy SystemsAt the moment, over 1.2 billion people lack access to any

electricity, and another two billion are considered to have

inadequate access. A key goal of the 2010 Copenhagen Accord

is to provide energy to these underserved populaons. There

may be few energy source opons available—in some coun-

tries, coal is the only economically available bulk source

capable of providing reliable energy. Although its use is set to

decline in some developed economies, coal will connue to be

used widely and in considerable quanes. For over a decade,

global coal consumpon has risen steadily; in some non-OECD

countries, in parcular, both producon and consumpon

have increased dramacally. During this me, consumpon

has risen by nearly 60%, from 4.6 Gt in 2000 to about 7.8 Gt in

2012.3 Despite eorts to diversify, coal remains vitally impor-

tant for many economies. Since 2000, apart from renewables,

it has been the fastest-growing global energy source. It’s the

second source of primary energy aer oil, and provides more

than 30% of global primary energy needs.

The biggest individual coal reserves are in the U.S., Russia,

China, Australia, and India. In all of these countries, coal is

used to generate large percentages of electricity. In several, it

also provides important economic benets as it is exported to

other power-hungry economies. At the moment, coal’s princi-

pal use remains electricity generaon; coal-red power plants

produce 41–42% of the world’s electricity. In the coming

years, electricity will connue to be provided by many dier-

ent generang technologies, but the projected combinaons

are highly site-specic. The IEA World Energy Outlook (2012)

suggests that, for the foreseeable future, power producon

from most sources will connue to increase (Figure 1).4 In

many countries, coal and renewable energy systems are being

deployed at greater percentages and, thus, there is increased

interest in how to opmally integrate these systems. In fact,

there are a signicant number of opportunies.

AN ODD PARTNERSHIP?

With the ever-increasing use of all types of fossil fuels, there

has also been a marked increase in the uptake of renewable

energy sources. In many economies, these now represent a

rapidly growing share of electricity supply; Table 1 shows the

top regions and countries at the end of 2012.

In 2013 renewables made up more than 26% of global gen-

erang capacity; in 2013 they produced 22% of the world’s

electricity. Global renewable power capacity connues to

increase. In 2013, hydropower and solar PV each accounted

for about 33% of new renewable capacity, followed by wind

at about 29%.5

Several driving forces support the growth in renewables. Al

developed naons rely heavily on an adequate and acces

sible supply of electricity and, for a long me, demand has

connued to rise in nearly every country. However, in recent

years, concerns over issues such as the depleon of energy

resources and global climate change have been heightened

The preferred response of many western governments has

been a supply-side strategy—namely, to raise the share of

renewables (especially renewables other than hydropower) in

the energy mix toward 20% and beyond. To date, wind power

has emerged as the most compeve and widely deployed

renewable energy, although levels of solar power are also

growing steadily. Renewable energy technologies such as wind

and solar have obvious features that make their use aracve

FIGURE 1. Global power generaon mix4

Poland’s Belchatów coal-red power staon is Europe’s larges

thermal power plant (courtesy PGE Elektrownia Belchatów).

2k

4k

6k

8k

10k

12k

14k

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035

G l o b a l P o w e r

G e n e r a t o n M i x ( T W h )

Coal

Renewables

Gas

Nuclear

Oil


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COVER STORY

Although inial capital costs for renewables-based systems

can be high, operang costs can be low; emissions generated

during day-to-day operaon are eecvely zero.

Especially in faster-growing energy markets, these renew-

able energy systems are not replacing exisng or even new

coal-red power plants. Renewables and coal-red power

generaon are growing simultaneously. Therefore, it is worth

exploring the many opons for combining these very dierent

forms of energy in the most cost-eecve, environmentally

conscious, and ecient means possible. A growing number of

hybrid coal-renewables systems have been proposed or arebeing developed around the world, several of which could

oer signicant potenal.

Coal and Biomass

Combining biomass with coal is a prime example of combining

renewables and coal. Such a combinaon is already deployed

fairly widely in the form of coring biomass in large conven -

onal coal-red power plants. Around the world, a growing

number of power plants regularly replace a poron of their

coal feed with suitably treated biomass. More than 150 coal-

red power plants now have experience with coring biomassor waste fuels, at least on a trial basis. There are ~40 pulver-

ized coal combuson (PCC) plants that core biomass on a

commercial basis, with an average of 3% energy input from

biomass.6

Biomass comes in many forms and can be sourced from

dedicated energy crops (such as switchgrass and miscanthus),

short-rotaon mber, agricultural crops and wastes, or forestry

residues. When combined with coal, biomass can provide a

number of advantages. However, its use on a large commercial

scale could create a number of issues. For example, the vol-

umes to be harvested and handled can be substanal, some

forms may be subject to limited or seasonable availability, and

various pre-treatments may be needed. Inevitably, such chal-

lenges can add complexity and cost to energy producon.

Co-ulizaon of coal and biomass need not be limited to co-

combuson in exisng power plants—there are a number of

other possibilies such as co-gasicaon. Coal gasicaon is

a well-established versale technology. Combining these two

dierent feedstocks can be benecial. For instance, facilies

that co-gasify biomass in large coal gasiers can achieve high

eciencies and improve process economics through greater

economies of scale compared to a biomass-only facility. Sucha combinaon can also help reduce the impact of uctuaons

in biomass availability and its variable properes. Combining

biomass and coal in this way can be useful, both environmen-

tally and economically, as it may be possible to capitalize on

the advantages of each feedstock, and overcome some of their

individual drawbacks. Biomass can have an impact on CO2

emissions from a combuson or gasicaon process. Replacing

part of the coal feed with biomass (assuming that it has been

produced on a sustainable basis) can eecvely reduce the

overall amount of CO2 emied. Potenally, the addion of

carbon capture and storage (CCS) technology could result in a

carbon-neutral or even carbon-negave process. Globally, con-siderable quanes of biomass are potenally available—in

many countries, biomass remains an underexploited resource.

Similar to many convenonal coal-red power plants, several

commercial-scale, coal-fueled, integrated gasicaon com-

bined cycle (IGCC) plants in operaon have at least trialed com-

bining biomass with their coal feed, and several proposed IGCC

projects aim to do the same. For instance, a planned IGCC and

chemicals producon plant (with CCS) at Kędzierzyn in Poland

will co-gasify coal and biomass.7 To date, useful operaonal

experience in co-gasifying has been gained with all major

gasier variants (entrained ow, uidized bed, and xed bed

TABLE 1. Global renewable electric power capacity5 (end 2013) (GW)

Technology World Total EU-28 BRICS China U.S. Germany Spain Italy India

Bio-power 88 35 24 6.2 15.8 8.1 1 4 4.4

Geothermal 12 1 0.1 ~0 3.4 ~0 0 0.9 0

Tidal 0.5 0.2 ~0 ~0 ~0 0 ~0 0 0

Solar PV 139 80 21 19.9 12.1 36 5.6 17.6 2.2

CSP 3.4 2.3 0.1 ~0 0.9 ~0 2.3 ~0 0.1

Wind 318 117 115 91 61 34 23 8.6 20

Total RE power capacity* 560 235 162 118 93 78 32 31 27

Hydropower 1000 124 437 260 78 5.6 17.1 18.3 44

Total RE power capacity 1560 360 599 378 172 84 49 49 71

*Excludes hydropower.

Note: BRICS = Brazil, Russia, India, China, and South Africa



Most major wind and solar facilies do not operate in isola

on. Generally, they feed electricity into exisng power grids

or networks. Oen, such grids are fed by a variety of dierent

types of power plants—there may be various combinaons

of coal- and gas-red power plants, some hydro, and possi

bly nuclear. The grid makeup and rao between plant types

is never the same, as these factors dier from country to

country based on the local circumstances. On the face of it,

the addion of a large amount of wind power into a grid, fo

example, is a posive development. However, a large input

from intermient sources into exisng power systems can

upset grid stability and have major impacts, parcularly on

how thermal power plants within the system operate. Many

coal- and gas-red power plants no longer exclusively provide

baseload power, but are now required to operate on a more

exible basis. Many are increasingly switched o and on, or

ramped up and down, much more frequently than they were

designed to be. Inevitably, this is guaranteed to throw up a

number of issues—signicantly increasing wear and tear on

plant components, reducing the operang eciency of units

not designed for variable operaon, and impairing the eec

veness of emission control systems. Ideally, such importan

impacts should be taken into consideraon and factored into

any energy-producing scheme, but this is parcularly true in

cases where coupling intermient renewables with conven

onal thermal power plants is being proposed.

Clearly, the most signicant drawback with wind and sola

power is their intermiency. Consequently, periods of peak

power output oen do not correspond with periods of high

systems). Dierent types of coal have been co-gasied suc-

cessfully with a wide range of materials, many of which are

wastes that would have otherwise ended up in landlls or, at

least, created disposal problems.

Co-ulizing coal and biomass is not limited to power gen-

eraon. In a number of countries, hybrid concepts for the

producon of SNG, electricity and/or heat, and liquid trans-

port fuels have either been proposed or are in the process

of being developed or tested. Coal/biomass co-gasicaon

features in some of these. However, as well as incorporang

biomass, some propose to take this a step further by adding

yet another element of renewable energy to the system, gen-

erally by incorporang electricity generated by intermient

renewables (such as wind and solar power).

Coal, Wind, Solar, and Geothermal

Wind power has become the most widely deployed renewable

energy. In 2013, global capacity hit a new high of 318 GW. In

that year, China alone installed more than 16 GW; by 2020, the

IEA projects the country will more than double its wind power

capacity from the present level of 90 GW to around 200 GW.8

For comparison, the European Union countries have a com-

bined ~90 GW of installed capacity. In 2013, wind surpassed

nuclear to become the number three source of energy aer

coal and hydropower in China.9 Reportedly, this is part of the

greatest push for renewable energy that the world has ever

seen.10

Internaonal Power’s 1-GW Rugeley power staon in the UK. Like many others, this power plant has trialed coring variou

biomass materials with coal (courtesy Russell Mills Photography).


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COVER STORY

electricity demand, and vice versa. At mes, there can be

signicant amounts of surplus unwanted electricity available,

parcularly from wind farms. This can be quite a widespread

phenomenon, and the usual soluon is to take wind turbinesoine. However, rather than “waste” this electricity, it would

be much more benecial to nd an eecve means of using it.

One opon is to use electricity not needed to ll demand to

electrolyze water, producing hydrogen and oxygen. Both gases

have the potenal to be component parts of hybrid energy

systems and there are various schemes that propose feeding

the hydrogen into syngas from gasicaon systems, use it in

fuel cells or directly as a transport fuel, or combust it in gas

turbines to generate electricity.

Similarly, the oxygen could be used for a host of commercial

and industrial applicaons, or fed to a coal/biomass gasier oran oxy-fuel combuson plant to generate electricity. Dierent

concepts and schemes combining gasicaon, intermient

renewables, and electrolysis are currently being examined.

Some aim to incorporate carbon capture and storage. For

example, an on-going project in Germany is combining coal-

based power generaon with aspects of carbon capture and

wind-generated electricity with trials of advanced electrolyzer

technology (to produce hydrogen and oxygen from water).11

Success could encourage increased uptake of, for instance,

electrolysis, as a component part of various coal/renewables

systems. Assuming that the economics can be made to work,

several schemes look promising.

Another ongoing project in Germany is expected to lead to

signicant improvements in the overall eciency of the elec-

trolysis process: E.On’s power-to-gas project at Falkenhagen.

This technology ulizes mulple electrolyzers driven by excess

electricity from a nearby wind farm to provide the power to

produce hydrogen and oxygen. Output from the region’s wind

farms frequently exceeds demand, so instead of taking the

turbines oine when this happens, some of the electricity

is now being fed to the electrolyzers. In this case, the hydro-

gen produced is being injected into the local natural gas grid,

which acts as a large storage system. Eecvely, it’s a clever

way of storing renewable energy.

There is also an opportunity to integrate coal-red power

plants with renewable sources of thermal energy, such as

geothermal or solar thermal. The benet of this type of inte-

grated hybrid system is that the renewable source of energy

can take advantage of the exisng infrastructure of the coal-

red power plant, such as the steam cycle, connecon to thegrid, and transformers. Generally, this makes the economics

much more aracve compared to a stand-alone renewable

plant. Obviously, the availability of the renewable resource at

the coal-red power plant site is a prerequisite for such hybrid

systems to be successful.

Hybrid thermal systems operate by using heat from renewable

energy to increase the temperature of the coal-red power

plant boiler feedwater. This increases the eciency of the

power plant, eecvely displacing some coal for renewable

energy (or using the same amount of coal and producing more

electricity). Such thermal hybrid projects may be the mostcost-eecve opon for large-scale use of solar thermal and

geothermal energy, although, to be employed, this approach

must be recognized under renewable energy incenves. In

the future, there may also be an opportunity for renewable

sources of energy to provide the thermal load required for

carbon capture and storage, thus signicantly reducing the

overall impact to the power plant and contribung to large-

scale reducons in greenhouse gas emissions.

Smøla wind farm in Norway (courtesy Statkra)

E.On’s power-to-gas project at Falkenhagen in Germany

(courtesy E.On)



Currently, around 15 hybrid solar thermal plants, including

those on coal- and natural gas-red power plants, are being

developed, with a total capacity of 460 MW.12 Thermal hybrid

projects based on unconvenonal geothermal resources are

at an earlier stage of development and the eld will require

addional research prior to large-scale demonstraons.13

CURRENT STATUS

Some systems are at early stages in their development or

have been undertaken at a very small size, hence extrapo-

lang to commercial scale and obtaining rm process costs

remains problemac. For a variety of reasons, not all of the

dierent schemes being considered appear to be technically

and/or economically viable. However, some do appear to be

more robust. On-going developments (in, for instance, gasier

and electrolyzer design) should improve cost compeveness.

Where hydrogen and/or oxygen producon forms part ofa hybrid energy scheme, reducons in the cost of electric-

ity provided by renewable energy sources (such as wind and

solar) would also be benecial in making electrolysis more

cost eecve. Some examples of on-going hybrid projects are

given in Table 2. Although some are currently focused only on

biomass, potenally dierent elements from these processes

could also be incorporated into systems fueled by coal/bio

mass combinaons.

A number of projects are more advanced than others, with

development programs well underway. Some components

(such as co-gasicaon) have now been well established, and

others are under development or being trialed (such as the

commercial-scale demonstraon of hydrogen producon from

wind power and tesng of advanced electrolyzers). A numbe

of proposed hybrid systems show potenal—although in the

near to medium term, assuming outstanding technical and

economic issues can be resolved fully, most seem likely to be

applied inially to niche markets, or to nd applicaon unde

specic, favorable circumstances.

CLOSING THOUGHTS

Set against a background of growing global populaon and rising energy demand, there is a pressing need to come up with

new, cost-eecve, clean, reliable energy systems. To help

tackle this, many hybrid energy schemes have been proposed

some more praccal than others. Despite eorts by many

countries to diversify their fuel mix, fossil fuels such as coal wil

connue to provide a signicant part of the world’s energy for

TABLE 2. Examples of hybrid energy-producing systems proposed

Organizaon Technologies Proposed Status

NREL, U.S.Gasicaon/co-gasicaon +

electrolysis (wind)

Various studies underway:• combining wind power and biomass gasicaon

• combining biomass gasicaon and electrolysis

• combining coal and biomass co-gasicaon

Several gasicaon-based hybrid systems being examined

NETL, U.S.Coal gasicaon + electrolysis

(wind)

Systems to produce SNG, electricity, and biodiesel.

3000 t/d plant proposed.

Unconverted coal from gasier fed to oxy-fuel combustor

CRL Energy, New

Zealand

Coal/biomass co-gasicaon +

electrolysis (wind)

Systems could be used to produce F-T chemicals, synfuels.

O2 fed to gasier. H2 to enrich product gas, stored, or used as

transport fuel or in fuel cells.

Leighty Foundaon,

U.S.

Coal/biomass co-gasicaon +

electrolysis (wind) O2 from electrolysis fed to gasier

Univ. Lund, SwedenBiomass (wood) gasier +

electrolysis (wind)O2 from electrolysis fed to gasier

Elsam/DONG,

Denmark

Biomass gasicaon +

electrolysis (wind, solar)

Various co-generaon concepts to produce power, heat, and

transport fuels examined.

H2 added to syngas. O2 used for biomass gasicaon

Univ. Lausanne,

Switzerland

Wood gasicaon +

electrolysisSeveral processes examined for SNG producon

ChinaVarious: gasicaon +

electrolysis (wind)

O2 from electrolysis fed to gasier. H2 fed to syngas.

Mainly for SNG, methanol, ethylene glycol producon

Note: SNG = synthec natural gas; F-T = Fischer-Tropsch.


12/8010

the foreseeable future. For a number of reasons, where possi-

ble, it makes sense to look at coupling coal use with renewable

energy sources. Each power-producing system has its own pros

and cons, but combining these dierent systems in creave

ways may oer the possibility of overcoming some of these

shortcomings. With this in mind, various energy producon

concepts that propose combining a number of dierent tech-

nologies with coal are being developed around the world.

To be a praccal proposion, as with all power-producing sys -

tems, any hybrid scheme needs to be clean, workable, and

economically sound. Based on work carried out recently by

the IEA Clean Coal Centre, some hybrid systems appear to be

viable and have potenal.14,15 Although coal and renewable

energy sources might appear to be strange bedfellows, it’s

not unrealisc to suppose that in the coming years we could

see increased deployment of combinaons of the world’s two

fastest-growing energy sources becoming a reality.

REFERENCES

1. United Naons Populaon Division. (2014). Concise report on

the world populaon situaon 2014, www.un.org/en/develop

ment/desa/population/publications/pdf/trends/Concise%20

Report%20on%20the%20World%20Population%20Situa

on%202014/en.pdf2. Internaonal Energy Agency (IEA). (2012, 25 July). State of play:

New IEA stascs publicaons highlight latest global and OECD

trends across major energy sources, www.iea.org/newsrooman

devents/news/2012/july/name,28615,en.html

3. IEA. (2014). Coal informaon, www.iea.org/w/bookshop/646-

Coal_Informaon_2014

4. IEA. (2012). World energy outlook 2012, www.worldenergyout

look.org/publicaons/weo-2012/

5. Renewable Energy Policy Network for the 21st Century (REN21).

(2014). Renewables 2014 global status report, www.ren21.net/

Portals/0/documents/Resources/GSR/2014/GSR2014_full%20

report_low%20res.pdf

6. Adams, D. (2013). Sustainability of biomass for coring.

CCC/230. London: IEA Clean Coal Centre. www.iea-coal.org.uk/

documents/83254/8869/Sustainability-of-biomass-for-coring,-

CCC/230

7. Cornot-Gandolphe, S. (2012, October). The European coal mar-

ket: Will coal survive the EC’s energy and climate policies? Paris:

Instut Français des Relaons Internaonals.

8. IEA. (2011). Technology roadmap: China wind energy develop-

ment 2050. Available at: www.iea.org/publicaons/freepubli

caons/publicaon/technology-roadmap-china-wind-energy-

development-roadmap-2050.html

9. Yang, C. (2013). Wind power now No. 3 energy resource. People’s

Daily English Edion, english.peopledaily.com.cn/90778/8109836.html

10. Shukman, D. (2014, 8 January). China on world’s “biggest push”

for wind power. Brish Broadcasng Corporaon, www.bbc.

co.uk/news/science-environment-25623400

11. Farchmin, F. (2013, 6 November). Integraon of regenerave en-

ergy into Power2Gas by PEM electrolyzer technology. CO2RRECT

Project. Smart Grid-Infotage 2013, Munich, Germany, www.in

dustry.siemens.com/topics/global/en/pem-electrolyzer/silyzer/

Documents/2013-11-06_SMARTGRID_Munich_sck.pdf

12. Electric Power Research Instute. (2012, April). Ulity perspec-

ve: Solar thermal hybrid projects. Clean Energy Regulatory

Forum, Naonal Renewable Energy Laboratory, Golden, Colo-

rado, U.S., www.cleanskies.org/wp-content/uploads/2012/04/Libby_CERF3_04192012.pdf

13. Bean, N., & Varney, J. (2014). Geothermal assisted power gen-

eraon for coal-red power plants. Cornerstone, 2(4), 46–50.

14. Mills, S.J. (2011). Integrang intermient renewable energy

technologies with coal-red power plants. CCC/189. London:

IEA Clean Coal Centre.

15. Mills, S.J. (2013). Combining renewable energy with coal.

CCC/223. London: IEA Clean Coal Centre.

The author can be reached at [email protected]

COVER STORY

Hybrid coal and renewable energy systems oer synergisc

benets. (photo courtesy of Russell Mills Photography)



VOICES

By Frank ClementeProfessor Emeritus of Social Science and

Former Director of the Environmental Policy Center,Penn State University

In 1972, The United Naons’ Stockholm Conference on the

Human Environment issued the following Declaraon: “Both

aspects of man’s environment, the natural and the man-made, are essenal to his well-being and to the enjoyment

of basic human rights, the right to life itself.”1 In other words,

people are part of the environment too. The Stockholm

Declaraon stressed that vast numbers of people connue to

live far below the minimum condions required for a decent

human existence, deprived of adequate food and clothing,

shelter and educaon, health and sanitaon. The Conference

concluded that economic and social development are essen-

al for ensuring a favorable living and working environment

for humans and for creang condions on earth that are nec-

essary for the improvement of the quality of life.

Electricity is the foundaon of such development and is the

lifeblood of modern society. The U.S. Naonal Academy of

Engineering idened societal electricaon as the “greatest

engineering achievement” of the 20th century, during which

the global populaon grew by over four billion people, the rise

of the metropolis occurred, transportaon was revoluonized,

medical care improved dramacally, and a vast system of elec

tronic communicaon emerged.2,3

Electricity supports quality of life increases, economic well-

being, and a clean environment. Electricity is highly unique

compared to other forms of energy:

• Flexible—converble to virtually any energy service—light

moon, heat, electronics, and chemical potenal

• Permits previously unaainable precision, control, and speed

• Provides temperature and energy density far greater than

those aainable from standard fuels

• Does not require a buildup of inera—oering instanta

neous access to energy at the point of use

Although it may seem counterintuive to some, electri-

caon oers tremendous environmental benets. Electro

The Rise of Electricity: OfferingLongevity, Improved Living Standards,

and a Healthier Planet

“Since 1970, the global demand for

electricity has more than quadrupled

... with ~42% of this incremental

demand being met by coal.”

New power lines providing access to electricity allow for energy to be ulized with increasing eciency.


14/8012

technologies are more ecient than their fuel-burning coun-

terparts and, unlike tradional fuels burned by the user, no

waste and emissions evolve at the point of use—no smoke,

ash, combuson gas, noise, or odor. Clearly, it’s important that

there are emissions controls in place when electricity is gen-erated; controlling criteria emissions (e.g., parculate maer,

SOx, NOx, mercury) at the source of large-scale electricity gen-

eraon is possible using commercially available technologies.

In addion, electricaon increases the eciency of society’s

primary energy consumpon and, therefore, reduces the

energy intensity of greenhouse gas emissions. Carbon capture

and storage (CCS) technologies are also being developed that

will allow for the carbon footprint of fossil fuel-based sources

of electricity to be dramacally reduced.

Given these benecial aributes of electric power, it is not sur-

prising that demand connues to increase. Since 1970, the globaldemand for electricity has more than quadrupled from approxi-

mately 5200 TWh to almost 23,000 TWh, with ~42% of this

incremental demand being met by coal, which is why this fuel

source has been referred to as the cornerstone of global power.4

Despite the staggering past growth of electricity demand,

the future world will require far greater amounts of power.

The Current Policies scenario in the IEA’s 2013 World Energy

Outlook projected a 80% increase in power generaon

between 2011 and 2035.4 However, the center of that pro-

jected incremental growth reects a global shi; from 1980

to 2000, almost a quarter of the global increase in genera-on came from the U.S., Japan, and Europe. Over the next 20

years, these developed naons will be relavely minor players

in growth, while developing Asia will account for over 60% of

new generaon, led by China, where the increase alone will

be about 6500 TWh—or about twice the current output of the

EU. Coal will be the mainstay of the next generaon as well,

accounng for over 40% of electricity in 2035.4

The empirical realies of at least three societal trends demon-

strate the magnitude of the emerging need for major increases

in electricity generaon:

1. Economic growth

2. Populaon increase

3. Urbanizaon

The projecons are staggering. By 2050, the global economy

is projected to quadruple to US$280 trillion in real terms. At

least 80% of this increase will be in the developing world, and

many of these naons will depend on coal to advance their

economies. By 2050, the world will add 2.4 billion people—67

million every year or 184,000 every day.5 In essence, the

enre populaon of Rome is added to the global rolls every

two weeks. Most of these people will either be born in, or

will move to, ever-growing cies. Urbanizaon may oer the

chance to li oneself out of poverty, but the electricity must

be available to support the business and industries that can

provide much-needed opportunies.

THE DISPARITY OF ELECTRIFICATION

Figure 1 provides a comparison of the UN’s Human Develop-

ment Index (HDI) and the per capita electricity ulizaon of

many naons. Note that the major aspects of the HDI, such as

life expectancy, educaonal aainment, and per capita GDP,

are stascally related to increased access and ulizaon of

electricity.

The Copenhagen Accord of 2009 concluded that “economic

and social development and poverty eradicaon are the rst

and overriding priories of developing country Pares.”7

Energy, parcularly electricity, is the pathway to achieving

these goals. More than 1.3 billion people have no electricity

at all and billions more have inadequate access to power.4

Electricity deprivaon in the developing world takes a mighty

toll. The impact on children and women is stark: According to

the UN, about 17,000 children die each day from causes that

are preventable with sucient electricity, including access to

FIGURE 1. Human Development Index versus electricity use6

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1

0 2000 4000 6000 8000 10,000 12,000 14,000 16,000

H u m a n D e v e l o p m e n t I n d e x

Electricity Use per Capita per Year (kWh)

Nigeria

India

Russia

Germany Japan U.S.

China

Brazil

VOICES

“Urbanization may offer the chanceto lift oneself out of poverty, but

the electricity must be available to

support the business and industries

that can provide much-needed

opportunities.”



clean water, beer sanitaon, adequate food, medicine, and

more educaon to improve earning power—all things that

can be taken for granted in the developed West. 8 At least 1.5

billion women and girls live on less than $2 per day, and this

feminizaon of poverty is endemic to areas without electricpower.9 Merely gathering tradional fuels consumes a large

part of a woman’s day throughout the developing world. Girls

are kept out of school to obtain fuel. In areas such as South

Darfur, women walk up to seven hours per day to collect fuel,

making mothers and their daughters highly suscepble to rob-

bery, violence, and rape. This inequitable access to energy has

far-reaching socioeconomic ramicaons. For example, the

infant mortality rate in Germany is less than four per 1000

live births; in Nigeria, it is 74. In the European Union, virtually

100% of the populaon has improved sanitaon; in Indonesia

alone, 104 million people lack such sanitaon.10

No naon holds more of the world’s poor than India. At least

300 million people have no power whatsoever and more than

700 million people lack access to modern energy services for

lighng, cooking, water pumping, and other producve pur-

poses. One hundred million do not have an improved water

supply and over 800 million lack access to improved sanita-

on. These problems will only intensify going forward as India

has about 630 million people less than 25 years old and will

surpass China as the most populated naon before 2030.11

Sub-Saharan Africa, a region with a populaon of more than

900 million people, uses less electricity per year (145 TWh

than the U.S. state of Alabama (155 TWh) with just 4.8 million

residents.12,13 There is only enough electricity generated in the

sub-Sahara to power one light bulb per person for three hoursa day.14 Africa has 15% of the world’s populaon—50% of

these people live without electricity. In fact, of the 25 naons

at the boom of the UN HDI (see Figure 1), 24 are in Africa.15

In Cambodia, 69% of the populaon lacks access to electricity

In Pakistan, it is 33% and in Uganda an astounding 92%. Of the

almost 160 million people in Bangladesh, 63 million lack access

to any sort of electric power.16 About three billion people use

rudimentary stoves to burn wood, coal, charcoal, and anima

dung, releasing dense black soot into their homes and the

environment. Annual deaths from this household air polluon

exceed four million per year.17,18 This gathering and burning o

wood and other biomass leads to deforestaon, erosion, land

degradaon, and contaminated water supplies. Families are

pushed o the land and migrate to cies in search of a beer life

URBANIZATION REVEALS THE IMPORTANCEOF ON-GRID ELECTRICITY

Much energy poverty occurs in rural locaons; in such set

ngs, o-grid opons, such as roof-top solar, have much to

An increasingly urban global populaon presents challenges, but also an opportunity to increase electricaon rates.


16/8014

contribute. Undoubtedly, such soluons must play a role. In

the near term, more ecient stoves and cleaner cooking fuels

could dramacally improve indoor air quality and save lives.

However, rural o-grid soluons may only meet the minimum

standards for electricity. It would be dicult, if not impossible,for rural, minimal electricaon to support the job-creang

growth and industries so sorely needed to fundamentally

address energy poverty. Perhaps most importantly, to expect

to rely only on o-grid soluons because of where energy

poverty occurs today ignores a pressing reality: rapid global

urbanizaon.

Urban migraon is occurring on an unprecedented scale—over

seven billion people will live in cies by 2050. The cies of the

future will be massive. In 1990, the world had 10 cies of over

10 million people. By 2050, there could be as many as 100

such “megacies”.19 The number of people urbanizing in Indiaalone will exceed 11 million per year—equivalent to the cur-

rent populaon of Delhi proper. Cies cannot be built without

electricity, steel, cement, and associated materials. The level

of producon required for these materials depends on ade-

quate resources, including electricity, being available. There is

a model for such growth and urbanizaon that already exists.

China has demonstrated that low-cost electricity, fueled 70%

by coal, can be a soluon to debilitang energy poverty. Over

the last 20 years, China has expanded access to electricity and

lied over 650 million people out of poverty.20 In fact, at the

global level, over 90% of people lied from poverty since 1990

were Chinese; power generaon from coal in China increased700% and GDP per capita rose eighold.21

During the same period, life expectancy increased by ve

years, infant mortality declined 60%, and 600 million people

gained new access to improved water sources.22 As women

are disproporonately aected by energy poverty, they are

also major beneciaries when it is alleviated. The maternal

mortality rao in China has dropped from 110 per 1000 live

births to 32 in 2013.23 Today universal access to electricity has

been achieved in China, allowing families to light their homes,

refrigerate food and medicine, and reduce indoor air polluon

through more ecient means of cooking.

The industrializaon and electricaon of China has come at

a price. The largest cies are experiencing major air polluon

problems and both direct coal combuson for heang and

coal-red power plants contribute to this problem. Although

China is expected to connue to rely on coal for electrica-

on, the country plans to dramacally reduce the emissions

from coal-red power plants by replacing older plants with

advanced coal-red units, adding environmental controls, and

increasing eciency via cogeneraon of heat and power. In

addion, state-of-the-art coal conversion facilies are mov-

ing forward. These ultra-clean facilies will produce synthec

natural gas, liquid fuels, and chemicals, although CCS, which

will be much less expensive at such facilies, will be required

to control CO2 emissions. The liquid fuels produced from coal

conversion inherently have less sulfur than petroleum-derived

fuels, which can address another major contributor to airpolluon by oering cleaner transportaon fuels. Finally, the

potenal for less direct coal use is signicant: Only about 53%

of China’s coal demand is for power generaon, compared to

over 90% in the U.S.4 Together, these steps could signicantly

reduce China’s air quality problems and allow connued eco-

nomic growth.

WHAT IS NEEDED TO MEET ELECTRICITYDEMAND AT SCALE?

The Internaonal Energy Agency (IEA) has dened basic elec-

tricity access as an average of 250 kWh per rural household

per year and 500 kWh per urban household per year.24 Such

limited access is far removed from levels of modern consump-

on. Basic energy access as dened for rural areas would be

enough for a household to power a fan, a mobile phone, and

two uorescent light bulbs for ve hours a day (see Figure 2).

Although even this basic level of electricaon would increase

the standard of living for some people, it is not enough to

enable the growth and job creaon needed to combat poverty.

Perhaps this is best explained by the Worldwatch Instute:

“Modern energy sources provide people with lighng, heat-

ing, refrigeraon, cooking, water pumping and other services

that are essenal for reducing poverty.”25 I believe that pro-

viding only basic energy to developing naons will constute

“global poverty maintenance” programs in the name of uni-

versal energy access.

TOMORROW’S ENERGY SOURCES

All viable electricity sources will play roles in coming decades

if real strides are going to be made to alleviate energy poverty.

In fact, the world will need more electricity from all sources.

Forecasters such as the IEA are already projecng majorincreases in on-grid electricity generaon from gas (89%),

nuclear (51%), and non-hydro renewables (358%) from 2011 to

2035 under the Current Policies Scenario.4 These resources will

be pushed, as will be coal. Today coal provides about 6000 TWh

of electricity in the developing world. In 2035, the IEA’s Current

Policies Scenario projects coal will provide 12,300 TWh. Even

in the IEA’s much more conservave New Policies Scenario

(assuming all new policies announced are fully enacted), coal

accounts for over 9500 TWh in 2035. Replacing coal in this

growth context would be impossible—and such eorts would

yield an increase in energy poverty. In many countries, com-

paring the percentage of generaon capacity to percentage of

VOICES



actual generaon also helps to highlight coal’s real role: Coal’s

share of generaon (as a percentage) is almost always signi-

cantly greater than its capacity percentage. For decades, coal

has been the default fuel when sanguine projecons of gas,

nuclear, and wind have fallen short. This is one of the reasonsthe IEA has projected that coal will supply at least 50% of the

on-grid electricity to eliminate energy poverty by 2030.24

Clearly, aempng to remove the contribuon of one energy

source is not a viable strategy—especially when aempng

to eradicate energy poverty. Nevertheless, western nan-

cial instuons such as the U.S. Export-Import Bank, the

World Bank, and the European Bank for Reconstrucon and

Development have refused to fund coal projects even in areas

of abject electricity poverty. Such a stance disregards the need

for widespread electricaon above and beyond basic access.

It can also be argued that such a posion is counterproducveto the fundamental objecve of such instuons, which is to

promote development and alleviate poverty.

ENVIRONMENTAL IMPACT

Development banks and other poverty alleviaon groups do

not need to choose between alleviang poverty and environ-

mental protecon. As has been explained, there are substanal

environmental benets to electricaon. In addion, clean

electricity generaon from coal could be assured by sup-

porng plants with high eciency, advanced environmental

controls, and that are made ready to implement CCS/CCUS.

Clean coal technologies are in use today and allow for the con-

sumpon of more coal with greatly reduced emissions. New

pulverized coal combuson systems, ulizing supercrical

technology, operate at increasingly higher temperatures and

pressures and, therefore, achieve higher eciencies than

convenonal plants. Upwards of 500 GW of supercrical units

are in operaon or planned around the world, but many more

are needed.26 Highly ecient modern coal plants emit up to40% less CO2 than the average coal plant currently installed.

2

Importantly, these supercrical plants are a prerequisite fo

next-generaon development of CCUS, which itself is broadly

recognized as required for global emission goals, which was

the other important component of the Copenhagen Accord.

A PLAN TO END ENERGY POVERTY

The underlying theme of the posion presented here is

straighorward: Electricity, socioeconomic security, and a

clean environment are inalienable human rights. Eorts toeliminate coal-red power plants would forgo an opportunity

to help meet burgeoning electricity demand, reduce depriva

on, elevate the global quality of life, and signicantly reduce

emissions from energy. Without contribuons from coal

economic growth will be stunted, the environment will be

degraded, and the crisis of energy poverty will not be solved. I

a global goal is truly the “[e]radicaon of poverty in the eld,”

the world’s most abundant source of electricity must remain

an integral part of the soluon.28 Policymakers must recognize

the scale of electricity required to meet that goal. By 2050

the world will have 9.6 billion people, with the large majority

in cies, where they have fuller access to electricity. I agreewith many coal industry leaders that we should implemen

a technologically based plan, which will help meet the ever-

rising need for power and improve the lot of all members of

the human race.

0

2000

4000

6000

8000

10,000

12,000

14,000

A v e r a g e E l e c t r i c i t y

A c c e s s

[ k W h / ( c a p i t a · y

r ) ]

U.S. EU China

5 hours a day of ...1 fan...1 mobile phone...2 flourescent bulbs

World India Pakistan Sub-SaharanAfrica

IEA Avg.*

12

6

39

10 2

4

11 1

58

7

FIGURE 2. Electricity access of select naons and a comparison to IEA’s basic energy service in rural sengs24

*250 kWh per rural household, 500 kWh per urban household


18/8016

The ve most important steps of a plan to increase access to

clean electricity include:

1. Work to eliminate energy poverty by ensuring that at least

half of on-grid new generaon is fueled by coal2. Replace older, tradional coal plants with plants ulizing

advanced coal technologies

3. Develop at least 100 major CCS/CCUS projects around the

world within 10 years

4. Deploy signicant coal-to-gas, coal-to-chemicals, and coal-

to-liquids projects globally in the next decade, which will

spur industry and reduce polluon from transportaon

fuels. Note that such projects would be parcularly useful

for low-cost CCS/CCUS demonstraons.

5. Commercialize next-generaon clean coal technologies

to achieve near-zero emissions, with supercrical power

plants as the next step along that path

This plan employs 21st century coal technology to cleanly and

aordably use abundant global reserves—which approach

900 billion tonnes, are distributed across 70 countries, and are

accessible through a far reaching and expanded network of

established infrastructure—to produce and deliver electricity

to all, especially to the billions of children, women, and men

who currently live in energy poverty.29

REFERENCES

1. United Naons (UN). (1972, 16 June). Report of the UnitedNaons Conference on the Human Environment, www.unep.org/Documents.Mullingual/Default.asp?documend=97&arcleid=1503

2. Naonal Academy of Engineering. (2003). The greatestengineering achievements of the 20th century, www.naonalacademies.org/greatachievements/List.PDF

3. Internaonal Energy Agency (IEA). (2002, September). Worldenergy outlook 2002, www.worldenergyoutlook.org/media/weo website/2008-1994/weo2002_part1.pdf, www.worldenergy outlook.org/media/weowebsite/2008-1994/weo2002_part2.pdf

4. IEA. (2013, October). World energy outlook 2013.5. UN News Centre. (2013, 13 June). World populaon projected

to reach 9.6 billion by 2050, www.un.org/apps/news/story.

asp?NewsID=45165#.VDXo9haNWFI6. World Bank. (2013). World development indicators: Human

Development Index, 2013, data.worldbank.org/indicator7. UN Framework Convenon on Climate Change. (2009). Full

Text of the Convenon, unfccc.int/essenal_background/convenon/background/items/1362.php

8. UN. (2014). We can end poverty, www.un.org/millenniumgoals/childhealth.shtml (accessed October 2014).

9. SowHope. (2013). About us, www.sowhope.org/aboutus

10. Central Intelligence Agency. (2013). The world factbook, Nigeria,Germany, Indonesia, www.cia.gov/library/publicaons/the-world-factbook/

11. Rajendram, D. (2013, 10 March). The promise and peril of India’syouth bulge. The Diplomat, thediplomat.com/2013/03/the-

promise-and-peril-of-indias-youth-bulge/12. U.S. Energy Informaon Administraon. (2014, February).

Electric power monthly, www.eia.gov/electricity/monthly/current_year/february2014.pdf

13. IRENA. (2012). Africa’s renewable future, www.irena.org/DocumentDownloads/Publicaons/Africa_renewable_future.pdf

14. World Bank. (2013). Fact sheet: Infrastructure in sub-SaharanAfrica, web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/AFRICAEXT/0,,contentMDK:21951811~pagePK:146736~piPK:146830~theSitePK:258644,00.html

15. SABC. (2013, 25 May). Free Africa from poverty and conict: AU,www.sabc.co.za/news/a/8bce1b804fc0bb519d4eff0b5d39e4bb/Free-Africa-from-poverty-and-conict:-AU-20132505

16. World Bank. (2013). Access to electricity (% of populaon), data,worldbank.org/indicator/EG.ELC.ACCS.ZS17. Yamada, G. (2013). Fires, fuel and the fate of 3 billion. New York:

Oxford University Press.18. World Health Organizaon. (2014). Household (indoor) air

polluon, www.who.int/indoorair/en/19. World Energy Council. (2011, December). Global Transport

Scenarios 2050, www.worldenergy.org/publicaons/2011/global -transport-scenarios-2050/

20. Mackenzie, A. (2013, 8 August). Producvity boost will keep usat No. 1. The Australian, www.theaustralian.com.au/business/opinion/productivity-boost-will-keep-us-at-no-1/story-e6frg9if-1226693062147

21. UN. (2013). We can end poverty, www.un.org/millenniumgoals/poverty.shtml

22. World Bank. (2013). World development indicators, data,worldbank.org/indicator, (accessed 2013).

23. World Bank. (2014). World development indicators, data,worldbank.org/indicator, (accessed October 2014).

24. IEA. (2011, November). World energy outlook 2011, www.iea.org/publications/freepublications/publication/world-energy-outlook-2011.html

25. Worldwatch Instute. (2012, 31 January). Energy povertyremains a global challenge for the future, www.worldwatch.org/energy-poverty-remains-global-challenge-future-1

26. Plas. (2014). New Power Plant Database, 2014.27. World Energy Council. (2013). World energy resources: Coal,

www.worldenergy.org/wp-content/uploads/2013/10/WER _2013_1_Coal.pdf

28. European Bank for Reconstrucon and Development, Eradicangpoverty in the eld, www.ebrd.com/pages/news/features/ta.shtml

29. BP. (2014, August). Stascal review of world energy, www.bp.com/content/dam/bp/pdf/Energy-economics/statistical-review-2014/BP-statistical-review-of-world-energy-2014-full-report.pdf

The author can be reached at [email protected]

VOICES



By Patrick FalwellSolutions Fellow, Center for Climate and Energy Solutions

Brad CrabtreeVice President, Fossil Energy, Great Plains Institute

S

ince 2011, the Center for Climate and Energy Soluons

(C2ES) and the Great Plains Instute (GPI) have convened

the Naonal Enhanced Oil Recovery Iniave (NEORI).Bringing together leaders from industry, the environmental

community, labor, and state governments, NEORI has worked

to advance carbon dioxide enhanced oil recovery (CO2-EOR)

as a key component of U.S. energy security, economic, and

environmental strategy. Currently, most CO2-EOR is done with

natural underground reservoirs of CO2, yet the industry’s future

growth depends on taking advantage of the large amounts of

CO2 that result from electricity generaon and industrial pro-

cesses. NEORI therefore is working to turn a waste product

into a commodity and to encourage policies that will help bring

an aordable supply of man-made CO2 to the market.

As such, NEORI has oered consensus recommendaons for

federal- and state-level policy acon. In May, Senator Jay

Rockefeller (D-WV) introduced legislaon in the U.S. Congress

adopng NEORI’s centerpiece recommendaon to reform

and expand an exisng federal tax incenve for the capture

of man-made CO2 and its geologic storage through CO2-EOR.

Going forward, NEORI will work to educate policymakers

across the polical spectrum and the broader public about

the opportunity for CO2-EOR to serve as a naonal soluon to

energy and environmental challenges.

BACKGROUND ON CO2-EOR

Although commonly considered a “niche” extracve tech

nology, CO2-EOR is a decades-old pracce. Since the 1970s

CO2-EOR projects have ulized CO2 to produce addional oi

from otherwise tapped-out elds. CO2 readily mixes with oi

not recovered by earlier producon techniques, swelling the

stranded oil and bringing it to the surface. The CO2 is then sep

arated from the oil and re-injected in a closed-loop process

Each me CO2 is cycled through an oil reservoir, the majority

of it remains trapped in the underground formaon, where

over me, all ulized CO2 will be stored permanently.

Today, CO2-EOR in the U.S. accounts for over 300,000 barrels ooil producon per day, or nearly 5% of total annual domesc

producon.1 More than 4000 miles of CO2 pipelines are in place

and, as of 2014, approximately 68 million tonnes of CO2 are

being injected underground annually for CO2-EOR. Nearly 75%

of this CO2 is from naturally occurring deposits, but over me

the supply of CO2 from man-made sources is expected to grow

signicantly. Currently, 11 U.S. states have CO2-EOR projects

Most are in the Permian Basin of Texas, with new acvity emerg

ing on the Gulf Coast and in the Mountain West. Untapped

opportunies exist in California, Alaska, and a number of states

in the industrial Midwest. Esmates suggest that CO2-EOR could

ulmately access 21.4–63.3 billion barrels of economically

Understanding the NationalEnhanced Oil Recovery Initiative

In May 2014 Senator Jay Rockefeller introduced legislaon

incorporang the main principal of the Naonal Enhanced Oil

Recovery Iniave. (creavecommons.org/licenses/by/2.0/)

“Improved federal incentive

could lead to the production of

over eight billion barrels of oil

and the underground storage of

more than four billion tonnes

of CO 2 over 40 years…”

ENERGY POLICY


20/8018

recoverable reserves.2 Recovering this oil would require 8.9–16.2

billion tonnes of CO2 that would predominantly come from man-

made sources. Technically recoverable reserves oer potenal

to produce addional oil and ulize more man-made CO2 that is

currently otherwise emied into the atmosphere.

The main barrier to taking advantage of CO2-EOR’s potenal

has been an insucient supply of aordable CO2. For an oileld

operator looking to implement CO2-EOR on a depleted oileld,

there is a cost gap between what they could aord to pay for

CO2 under normal market condions and the cost to capture

and transport CO2 from power plants and industrial sources.

For some industrial sources, such as natural gas process-

ing or ferlizer and ethanol producon, the cost gap is small

(potenally $10–20/tonne CO2). For other man-made sources

of CO2, including power generaon and a variety of industrial

processes, capture costs are greater, and the cost gap becomesmuch larger (potenally $30–50/tonne CO2). Recognizing the

cost gap as a signicant barrier, NEORI has worked to deter-

mine the role that public policy can play in narrowing it.

NEORI’S CONSENSUS RECOMMENDATIONSAND ANALYSIS

For the last three years, NEORI has brought together a broad

and diverse group of constuencies that share a common inter-

est in promong CO2-EOR. Some NEORI parcipants support

CO2-EOR as a way to provide a low-carbon future for coal by

managing and avoiding its carbon emissions. Others are inter-ested in the jobs and economic growth that deploying new CO2

capture projects, pipelines, and EOR operaons will bring. Sll

other parcipants want to advance innovave technologies that

can capture and permanently store CO2 underground. Despite

dierences of opinions among parcipants on other issues, all

agree that CO2-EOR is a posive endeavor and that public policy

can play an important role in realizing CO2-EOR’s many benets.

As such, NEORI’s parcipants have craed a set of consensus

recommendaons for federal and state policy incenves to

enable the widespread deployment of carbon capture tech-

nologies to provide CO2 for use in CO2-EOR, while addressing

concerns about how incenves have been allocated in the past.

To support its consensus recommendaons, NEORI also pre-

pared a quantave analysis to esmate the extent to which a

federal iniave could spur new CO2-EOR projects and improve

the federal budget at the same me. An incenve awarded for

capturing CO2 from man-made sources for use in CO2-EOR has

the potenal to be self-nancing, given that it could lead to

new oil producon that is taxed at the federal level. CO2-EOR

in the U.S. generates federal revenue from three sources:

1. Corporate income taxes collected on the addional oil

producon

2. Income taxes on private royales collected from CO2-EOR

producers

3. Royales from CO2-EOR producon on federal land

Together these sources equate to nearly 20% of the salesvalue of an addional barrel of oil and generate the source

of public revenues that will in turn cover the cost of newly

allocated incenves.

NEORI’s most recent analysis of the budget implicaons of

a tax incenve reects the legislaon introduced by Senator

Rockefeller. This analysis shows that an improved federal

incenve could lead to the producon of over eight billion

barrels of oil and the underground storage of more than four

billion tonnes of CO2 over 40 years and generate federal rev-

enues that exceed the value of tax incenves awarded within

the U.S. Congress’ standard 10-year budget window.

NEORI PROPOSES AN ENHANCEDFEDERAL INCENTIVE

NEORI recommends a reform and an expansion of an exisng

federal tax incenve, the Secon 45Q Tax Credit for Carbon

Sequestraon. First authorized in 2009, the 45Q tax credit

provides a $10 tax credit for each tonne of CO2 captured from

a man-made source and permanently stored underground

through enhanced oil recovery (a $20 tax credit is available for

CO2 stored in saline formaons). While enacted with the best ofintenons, the exisng 45Q program has been unable to encour-

age widespread adopon of carbon capture technologies for two

main reasons. First, 45Q is only authorized to provide tax credits

for 75 million tonnes of CO2, a relavely small amount consider-

ing how much CO2 could possibly be ulized through CO2-EOR.

As of June 2014, tax credits for approximately 27 million tonnes

of CO2 had already been claimed, and it is foreseeable that the

remaining pool of credits will be exhausted in the near future.

Second, 45Q has been unable to provide needed certainty to

carbon capture project developers that they will be able to

claim the incenve, due to rigid denions in the tax code and

the lack of a credit reservaon process. Carbon capture project

ENERGY POLICY

“For the last three years, NEORI

has brought together a broad and

diverse group of constituencies

that share a common interest in

promoting CO 2-EOR.”



developers have not been able to present the guarantee of

credit availability when seeking private-sector nance.

Under NEORI’s proposal, a larger pool of 45Q credits would be

established, while suggested reforms would increase certaintyand private-sector investment, improve transparency, and

help the program pay for itself scally within 10 years.

Allocating New 45Q Credits viaCompetitive Bidding and Tranches

To minimize the cost of new 45Q tax credits to the federal gov-

ernment, NEORI recommends that carbon capture projects

of similar cost bid against one another for allocaons of tax

credits. Under annual compeve bidding processes, carbon

capture projects would bid for a certain tax credit amount that

would cover the dierence between their cost to capture and

transport CO2 and the revenue they would receive from selling

CO2 for use in CO2-EOR. The project subming the lowest bid

would receive an allocaon of tax credits, and allocaons would

be made to capture projects up to specied annual limits.

Given the wide dierence in capture costs for potenal

man-made sources of CO2, three separate pools of credits,

or tranches, would be established. The creaon of separate

lower-cost industrialA and higher-cost industrialB tranches fo

power plants would ensure that an incenve is available fo

the diversity of potenal man-made sources of CO2.

Tax Credit Certification

A cercaon process would provide essenal up-front cer

tainty to carbon capture project developers and enable them

to reserve their allocaon of 45Q tax credits to be claimed in

the future. Upon receiving an allocaon of 45Q tax credits

through compeve bidding, a project would have to apply

for and meet the criteria of cercaon within 90 days. Fo

example, a carbon capture project would need a contract

in place to sell its CO2 for use in CO2-EOR to be cered. To

maintain cercaon, a carbon capture project would have to

complete construcon in three years, if it is a retrot, and ve

years, if it is a new facility.

Revenue Positive Determinationand Program Review

Following the seventh annual round of compeve bidding

the U.S. Secretary of the Treasury would assess whether newly

allocated 45Q tax credits have been revenue-posive to the

federal government. If the new 45Q tax credits are not proving

to be revenue-posive, the Secretary will make recommen

daons to Congress to improve the program. Otherwisecompeve bidding will connue unl the next review.

The Secretary of the Treasury also would be advised by a pane

of independent experts.

Annual Tax Credit Adjustment Basedon Changes in the Price of Oil

Each year, the value of claimed 45Q tax credits would be

adjusted up or down to reect changes in the price of oil. In

most instances, the price that CO2

-EOR operators would pay CO

providers for their CO2 is linked explicitly to the prevailing price

of oil. When the price of oil rises and CO2-EOR operators are

willing to pay more for CO2, the value of 45Q tax credits would

be adjusted downward to ensure the federal government does

not pay more than needed. Conversely, when oil prices fall, the

value of 45Q tax credits would be adjusted upward, ensuring

that carbon capture projects receive sucient revenue.

Tax Credit Assignability

Potenal carbon capture project developers include electric

power cooperaves, municipalies, and startup companiesNEORI recommends the allocaon of new 45Q tax credits.


22/8020

Not all of these enes have sucient tax liability to allow

them to realize the economic benet of a tax credit. As such,

NEORI recommends that carbon capture projects have the

ability to assign 45Q tax credits to other pares within the

CO2-EOR supply chain. This provision could facilitate tax equity

partnerships, but only among enes directly associated with

the project and managing the CO2.

CONCLUSION

In a me of considerable disagreement on U.S. energy and cli-

mate policy at the federal level, NEORI members believe that

CO2-EOR oers broad benets and the rare opportunity to

unite policymakers and stakeholders in common purpose. The

NEORI coalion therefore remains commied to educang

members of both polical pares and the broader public as to

how CO2-EOR can generate net federal revenue from domesc

oil producon, meet domesc energy needs, safely store man-

made CO2 underground, and help advance and lower the costs

of carbon capture technology.

NOTES

A. Lower-cost industrial sources of CO2 include natural gas pro-

cessing, ethanol producon, ammonia producon, and exisngprojects involving the gasicaon of coal, petroleum residuals,biomass, or waste streams.

B. Higher-cost industrial sources of CO2 include cement producon,iron and steel producon, hydrogen producon, and new-buildprojects involving the gasicaon of coal, petroleum residuals,biomass, or waste streams.

REFERENCES

1. Kuuskraa, V., & Wallace, M. (2014, 7 April). CO 2-EOR set forgrowth as new CO2 supplies emerge. Oil & Gas Journal, www.ogj.com/arcles/print/volume-112/issue-4/special-report-eor-heavy-oil-survey/co-sub-2-sub-eor-set-for-growth-as-new-co-

sub-2-sub-supplies-emerge.html2. Wallace, M., Kuuskraa, V., & DiPietro, P. (2013). An in-depth

look at “next generaon” CO2-EOR technology. Naonal EnergyTechnology Laboratory, www.netl.doe.gov/File%20Library/Research/Energy%20Analysis/Publications/Disag-Next-Gen-CO2-EOR_full_v6.pdf

The authors can be reached at [email protected] and

[email protected]

ENERGY POLICY

NEORI is designed to boost U.S. domesc oil producon while providing much-needed nancial support for CCUS projects.

“NEORI members believe that

CO 2-EOR offers broad benefits

and the rare opportunity to unite

policymakers and stakeholders incommon purpose.”



By Benjamin SportonActing Chief Executive, World Coal Association

As another round of climate talks approaches, recent

headlines have highlighted the crical role developing

countries play in achieving a climate agreement—and

they are. Concerned about the restricons it might place on

their eorts to grow their economies and eradicate poverty,

many developing countries are cauous about what a futureglobal agreement on climate change might mean. With one

billion people living in extreme poverty in addion to a similar

number with incredibly low standards of living, it is hardly sur-

prising that poverty eradicaon ranks number one on the list

of priories for developing country governments.1 The recent

proposal document for new Sustainable Development Goals

also acknowledged that “poverty eradicaon is the greatest

global challenge facing the world today”.2

This is the reason that developing countries are key to a global

climate agreement: Any proposed agreement that hampers

their ability to grow their economies and eradicate povertywill not win their support.

THE LONG AND WINDING ROAD

Negoaons toward a global agreement on climate change

have been long and tortuous. Beginning in 1992 with the

original “Earth Summit” in Rio de Janeiro, the negoaon pro

cess produced the Kyoto Protocol, which came into eect in

2005 but covered only around one third of global CO2 emis

sions. A 2009 summit in Copenhagen was originally intended

to be the apex of the process with a binding global deal on

emissions reducon, but it failed to live up to expectaons

World leaders will gather again in Paris in November 2015

for the 21st Conference of the Pares (COP21) to the United

Naons Framework Convenon on Climate Change (UNFCCC

for what is now expected to be the pinnacle of the climate

negoaons process.

This September, UN Secretary General Ban Ki-moon hosted a

summit in New York intended to push climate change back upthe internaonal agenda and spur acon toward November

2015. With celebrity endorsements and a series of coordinated

announcements from acvists, governments, and the private

sector, the summit did have some success in raising the prole

of an issue that has struggled to maintain the prole it once

had, but which has since been drowned out by other priori

es, chief among them economic and security crises.

Ulmately, however, the negoaon process has struggled fo

more than two decades because of a fundamental disconnec

between developed and developing countries. This discon

nect centers on a desire by developed countries to requireemissions reducons commitments by developing countries

while they are sll developing—potenally liming the ability

of those countries to grow their economies and eradicate

poverty. It comes about because many in the developed world

refuse to acknowledge that the development pathway thei

countries took—one that relied on abundant, aordable, and

reliable energy—is the pathway that the developing world wil

need to take if it is truly to eradicate poverty.

All sources of energy have a role to play in achieving climate and

development objecves. An overemphasis on renewable tech

nologies, however, risks liming developing countries to “light

Developing Country Needs AreCritical to a Global Climate Agreement

United Naons Secretary-General Ban Ki-moon, le, is

joined by President François Hollande of France at a news

conference on climate change during the Climate Summit,

New York, U.S., 23 September 2014. (AP Photo/Jason

DeCrow)

“There is a pathway that provides a

role for coal in achieving both climate

and development objectives.”


24/8022

bulb and cook stove” soluons: that is, soluons that address

the immediate needs of poverty and climate without addressing

the longer-term fundamentals needed for poverty alleviaon.

This fact was recognized in recent remarks by World Bank

President Jim Yong Kim at the U.S.–Africa Leaders Summit in

August when he said that “there’s never been a country that

has developed with intermient power”3 and that, despite

recent policy announcements, the World Bank would sll

likely fund coal projects. His statement came as African leaders

argued they were living in “energy apartheid” and demanded

the right to use their natural resources, parcularly coal, to

fuel their economic development.4

If the climate negoaon process is to have any success it

must integrate development and climate objecves.

THE DEVELOPMENT AND ENERGY CHALLENGE

With 1.3 billion people globally lacking access to modern

electricity and about double that number lacking access to

clean cooking facilies, it is hardly surprising that developing

country governments are focused on aordable and reliable

energy to help grow their economies.5 Energy is fundamen-

tal to development. Without reliable modern energy services

hospitals and schools can’t funcon and business and industry

can’t grow to provide employment and economic growth.

In its 2011 World Energy Outlook, the Internaonal Energy

Agency (IEA) reviewed what would be needed to meet their

own “minimal energy access for all” scenario—a scenario that

would barely meet basic energy needs, but is the basis for the

proposed Sustainable Development Goal on energy access for

all. Even in this minimal energy access scenario, half of the on-

grid electricity needed comes from coal.6 A more ambious

target would likely see a much larger role for coal—and it is a

more ambious scale of development and energy access that

developing and emerging economies are targeng. That is

why stascs about coal’s growing role in the world connue

to confound those who forecast its demise.

Coal’s role in development explains why coal consumpon in

Southeast Asia is projected to grow at 4.8% a year through

to 2035 along with signicant growth in other developing

regions (see Figure 1).7 It is why a 2012 report from the World

Resources Instute8 idened 1199 planned new coal plants(represenng 1400 GW) across 59 countries—most of them in

developing and emerging economies.

Coal’s crical role in development is one of the reasons coal

has been the fastest growing fossil fuel for decades and why its

share of global primary energy consumpon in 2013 reached

30.1%, the highest since 1970.9 Even under the IEA’s New Policies

Scenario (which accounts for all currently announced climate pol-

icies) coal demand is expected to grow from 3800 million tonnes

of oil equivalent (Mtoe) today to almost 4500 Mtoe in 2035.5

These gures alarm climate acvists who argue for an end to coaland encourage divestment from the coal industry. What they

ignore, however, is that there is a pathway that provides a role

for coal in achieving both climate and development objecves.

A PATHWAY THAT INTEGRATESCLIMATE AND DEVELOPMENT

Alongside last year’s climate summit in Warsaw, the World

Coal Associaon joined with the Polish government to host

the Internaonal Coal and Climate Summit. The summit was

widely cricized by environmental groups for trying to take

the focus away from climate negoaons, an argument whichignored the signicant contribuon cleaner coal technologies

can make to achieving ambions to reduce CO2 emissions.

A key part of the summit was the launch of the Warsaw

Communiqué, a document that called for increased interna-

onal acon on deployment of high-eciency, low-emissions

(HELE) coal-red power generaon.

21st-century HELE coal technologies have huge potenal. It is

well known by now that a one percentage point increase in

eciency at a coal plant results in a two to three percentage

point decrease in CO2 emissions. Less widely known is that

the average eciency of the global coal eet currently standsat 33%. O-the-shelf technologies for supercrical and ultra-

supercrical coal have about 40% eciency or higher, while

more advanced technologies expected to become available in

the near fu

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