cornerstone volume2 issue4
TRANSCRIPT
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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.
The World Coal Association has been influencing policy at the highest
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:
www.worldcoal.org
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Alpha Natural Resources Inc
Anglo American
Arch Coal Inc
BHP Billiton
Bowie Resource Partners LLC
Caterpillar Global Mining
Asociación Nacional De Empresarios De
Colombia
ASSOCARBONI
Associação Brasileira do Carvão Mineral
Association of British Mining Equipment
Companies
China National Coal Association
Coal Association of Canada
China National Coal Group
Glencore
Joy Global
Karakan Invest.
Mitsubishi Development Pty Ltd
Orica Ltd
Coal Association of New Zealand
CoalImp - Association of UK Coal Importers
Fossil Fuel Foundation
German Coal Association
Indonesian Coal Mining Association
Iranian Mines & Mining Industries Development
& Renovation Organization
Japan Coal Energy Center
Peabody Energy
Rio Tinto Energy
Shenhua Group
LLC Vostsibugol
Whitehaven Coal Limited
Xcoal Energy & Resources
Minerals Council of Australia
Mongolian Coal Association
National Mining Association
Queensland Resources Council
Shaanxi Institute of Geological Survey
Svenska Kolinstitutet
UCG Association
WCA Members
WCA Associate Members
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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
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31
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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.
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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
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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.”
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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
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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)
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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.
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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)
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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.
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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.”
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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.
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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
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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
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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
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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
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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).
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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
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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).
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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]
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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
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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.”
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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.
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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
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.”
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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.”
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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