States weigh merits of cleaner coal vs. high costs

Climate legislation faces an uncertain future in Congress, and with it the proposed billions in spending for "clean coal" technologies. That has focused new attention on technologies that don't elminate carbon-dixide emissions but greatly reduce them. Integrated gasification combined cycle (IGCC) is one of those low-carbon options. "It essentially extracts carbon dioxide from coal and concentrates it before the remaining gas is burned to generate power. The CO2 can then be dispatched for storage underground," Saqib Rahim of Environment & Energy Daily reports. "Yet like many low-carbon technologies, IGCC is unproven at scale. Capital costs can top a few billion dollars, so investors are reluctant to build an IGCC plant fully on their own dime."

"The investors and utilities have argued that IGCC plants offer a hedge against two trends: rising electricity costs and the likelihood of federal climate legislation," Rahim writes. At the state level, "Public service commissions have had to consider whether the benefits -- emissions cuts, jobs from carbon capture and storage -- outweigh the costs." Results have been mixed, with a few plants being approved despite fears of growing price tags and others being denied due to high costs. "The fundamental problem is that the commissions, for the most part, are required to do the cheapest thing and most reliable thing they can," John Thompson, director of the coal transition project for the Clean Air Task Force, told Rahim. "How does a public service commission consider the impact of future carbon regulations when those regulations aren't on the books yet?"

Rahim reports, "Industry observers . . . lament that 'everyone wants to be the first to build the second one'." They say the only way to bring down the cost of such facilities is to start building them so they can be evaluated and future projects will know where to cut costs. The availability of natural gas has also dealt a blow to IGCC advocates, offering a cheaper, cleaner option than coal.

Some say without climate legislation from Congress, carbon-capture and storage technology will not be implemented, and then it may be too late. "Many utilities are in denial about carbon management. I believe any plant built today will need to manage carbon sooner rather than later," David Hadley, a former member of the Indiana Utility Regulatory Commission, told Rahim. "One hundred new coal plants. Only a handful are IGCC. Utilities like to do things the way they have always done them." (Read more, subscription required)