Carbon capture needs $6.4 billion to be viable

An infusion of $6.4 billion over ten years will be needed to bring carbon capture and sequestration technology to commercial viability, according to panelists at conference in Washington sponsored by the Center for Strategic and International Studies.

Craig Hansen, vice president of Washington operations for power plant equipment manufacturer Babcock and Wilcox, said March 31 that the money will be needed to persuade utilities to see the technology as "investment neutral."

Bruce Braine, American Electric Power's vice president of strategic policy analysis, agreed on "the order of magnitude," while Stephen Kaufman, Integrated CO2 Network chair, added that the level is "not unreasonable."

Hansen said that the situation is about "closing the gap" between where federal climate legislation seeks to reduce greenhouse gas emissions and where technology can take coal generators. "It is a question of how do you accelerate minimizing the gap," he said.

Braine said that Columbus, Ohio-based AEP prefers a climate bill offered in July 2007 by Senator Jeff Bingaman, Democrat-New Mexico, as a route to reducing GHG emissions in line with the pace of CCS development.

That bill, S. 1766, seeks to reduce emissions to 1990 levels by 2030 with the greatest reductions after 2020.

"Remember this is not a technology issue but an economic issue. [CCS] is very expensive to do in a short amount of time," he told the conference.

"The key uncertainty is time," said Gardiner Hill, BP Alternative Energy's director of CCS technology. "Not only is it a race against time, but we have to develop new technology to meet new [GHG] targets."

Bingaman's bill has been idle before the Senate Environment and Public Works Committee as interest has focused on S. 2191 by Senators Joseph Lieberman, Independent Democrat-Connecticut, and John Warner, Republican-Virginia. That bill is set for a Senate floor debate in June.

Aware that carbon constraints are coming, Braine said that the utility plans to bring two 600-MW integrated gasification combined-cycle power plants online in Ohio and West Virginia by the middle of the next decade.

"AEP's main interest in doing IGCC is because it lends itself to CCS in the future," he said, adding that IGCC captures carbon on the front-end of the generation process rather than less efficient back-end as seen with traditional power plants.

Ultimately, the nation will need new baseload power generation to meet growing demand, which must be met by coal or nuclear power, Braine said. And utilities will find it too expensive to retire their existing fleet of coal generation, he added.

Opening the conference, Bingaman, who is chairman of the Senate Energy and Natural Resources Committee, said that he expects a federal carbon bill to provide "a very substantial incentive" to make CCS commercially viable.

"We are going to be able to put in place a carbon reduction scheme that actually causes CCS to occur," he said. "We are likely to adopt some cap-and-trade system to provide a very substantial incentive to provide carbon capture and sequestration." - Christine Cordner

Created: April 1, 2008

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