lighting the way part2

8/7/2019 Lighting the Way Part2

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IAC Report|Energy supply 5

3. Energy supply

Even with concerted e orts to exploit energy-e ciency opportunities andother demand-side solutions, the worlds energy needs are enormous andalmost certain to continue growing as developing economies industrializeand as rising standards o living in many societies lead to increaseddemand or modern consumer goods, services, and amenities.

For most o human history, animals and biomass supplied the vast bulko human energy needs. With the advent o the Industrial Revolutionroughly two centuries ago, humans began to turn increasingly to hydrocar-bons as their primary source o energy, marking a pro ound shi t thatbrought with it an era o unprecedented technological, socio-economic,and cultural change. Today, as concerns about environmental sustainabil-ity and energy security mount, the necessity o a third transition to a newgeneration o energy supply technologies and resources seems increas-ingly inevitable, i still not quite imminent. Even as the world remainslargely dependent on coal, oil, and natural gas, early elements o that tran-sition are beginning to come into view.

This chapter reviews the supply-side energy technologies and resourcesthat are likely to play a role in the transition to a sustainable energy uture.Separate sections cover ossil uels, nuclear power, non-biomass renewableresources, and biomass energy. In general, the ocus is on supply-sidesolutions that could make an appreciable contribution to meeting worldenergy needs in the next 20 to 40 years. Longer-term options, such asnuclear usion, methane hydrates, and hydrogen (as an energy carrier) arediscussed briefy but do not receive extensive treatment here.

3.1 Fossil fuelsFossil uels coal, petroleum, natural gas, and their byproducts supplyapproximately 80 percent o the worlds primary energy needs today. Useo these uels drives industrialized economies and has become integral tovirtually every aspect o productive activity and daily li e throughout themodern world. Yet almost rom the beginning, humanitys steadily grow-


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58 IAC Report| Energy supply

ing dependence on ossil uels has been a source o anxiety as well as pros-perity. As early as 1866, when the Industrial Age was just getting under-way, the British author Stanley Jevons wondered how long his countryscoal reserves would last. Coal turned out to be a more abundant resourcethan Jevons could have imagined, but similar questions have long beenasked about the worlds petroleum and natural gas supply. More recently,concerns about global climate change have emerged as a new andperhaps ultimately more limiting constraint on the long-term sustaina-bility o current patterns o ossil- uel use.

Those patterns suggest that ossil uels will continue to play a dominantrole in the worlds energy mix or at least the next several decades, evenwith concerted e orts to promote energy e ciency and non-carbon alter-natives. How to manage and improve humanitys use o coal, petroleum,and natural gas resources during the transition to a more sustainableenergy uture and in particular, whether it is possible to do so in waysthat begin to mitigate climate change and energy security risks while alsoresponding to the urgent energy needs o developing countries is there-

ore a key question or policymakers and political leaders the world over.This section describes the speci c challenges that exist today in connectionwith each o the major ossil uel options. A signi cant portion o thediscussion ocuses on the prospects or a new generation o climate-

riendly coal technologies because o the unique potential they hold oradvancing multiple economic, development, energy security, and environ-mental policy objectives.

Status o global ossil- uel resourcesAs context or this discussion, it is use ul to begin by reviewing the statuso ossil uel resources in relation to current and projected patterns o consumption. Table 3.1 shows proved reserves o natural gas, oil, and coalrelative to current levels o consumption and relative to estimates o thetotal global resource endowment or each uel. Proved reserves refect thequantity o uel that industry estimates, with reasonable certainty based onavailable geological and engineering data, to be recoverable in the uture

rom known reservoirs under existing economic and operating conditions.Proved reserves generally represent only a small raction o the total globalresource base. Both gures tend to shi t over time as better data becomeavailable and as technological and economic conditions change. In thecase o oil, or example, estimated reserves grew or much o the last hal century because improved extraction capabilities and new discoveriesmore than kept pace with rising consumption. This has begun to change


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in recent years, however, prompting concern that oil production couldpeak within the next ew decades leading to a period o inevitable declinein available supplies.

Global coal supplies both in terms o known reserves and estimatedtotal resources are ar more abundant than global supplies o conven-tional oil and natural gas (Table 3.1); or the latter uels, the ratio o knownconventional reserves to current consumption is on the order o 4060years, whereas known coal reserves are adequate to support another 150years at 2006 rates o consumption. Obviously, any estimate o knownreserves since reserves are a measure o the resource base that iseconomically retrievable using current technology is subject to changeover time: as prices rise and/or technology improves, estimated reservescan grow. Nevertheless, price and supply pressures are likely to continue toa ect oil and natural gas markets over the next several decades (Table 3.1).The inclusion o unconventional resources greatly expands the potentialresource base, especially or natural gas, i estimates o additional occur-rences that is, more speculative hydrocarbon deposits that are not yettechnically accessible or energy purposes, such as methane hydrates areincluded. This will be discussed urther in the section on unconventionalresources.

Consumption (EJ)

Table 3.1 Consumption, reserves, and resources of fossil fuels

Proven reserves (EJ) end 2006

b

Lifetime of proven reserves

(years) at present consumption

Consumption to date (1860-

2006) as a share of proven re-

serves

Resource base (ZJ)

a

Lifetime of resource base (years)

1860 1998a

1999 2006b

1860 2006 ,b 2006b

Oil 5,141 1,239 6,380 164 6,888 41 92% 32.4 198Natural gas 2,377 785 3,163 109 7,014 63 45% 49.8 461Coal 5,989 878 6,867 130 19,404 147 35% 199.7 1,538

Note: Under Resource base, zettajoule (ZJ) equals 03 exajoules (EJ). Resources are defned asconcentrations o naturally occurring solid, liquid, or gaseous material in or on the Earths crust in such

orm that economic extraction is potentially easible. The Resource baseincludes proven reserves plusadditional (conventional and unconventional) resources. Unconventional resources could extend li etimeo oil, gas, and coal by a actor o 5- 0, but their extraction will involve advanced technologies, highercosts, and possibly serious environmental problems

Sources:(a) UNDP, UNDESA, WEC, 2000: Table 5. . (b) BP, 200


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In sum, near-term energy security and supply concerns are mostly rele-vant or oil and, to a lesser extent, or natural gas. These concerns are seri-ous given the central role both uels now play in the global energy econ-omy. With the notable exception o Brazil, which uses substantial quanti-ties o ethanol as a vehicle uel, transportation systems throughout theworld continue to rely almost exclusively on petroleum products. The rapidmodernization o large developing countries like China and India,combined with stagnant or alling vehicle uel-economy in major consum-ing countries like the United States and continued growth in reight andair transport, has sharply increased global oil demand in recent years,straining the capacity o producing countries and generating strongupward pressure on oil prices. Most o the worlds proven reserves o conventional oil are concentrated in a ew large deposits in a ew regions o the globe, most notably, o course, in the Middle East. Natural gas, mean-while, is already an important source o energy in many parts o the worldand as the cleanest and least carbon-intensive ossil- uel option has animportant role to play in mitigating greenhouse gas and other pollutantemissions in the transition to a next generation o energy technologies.Though remaining natural gas reserves are more widely distributedaround the world than oil reserves, regional supply constraints and highprices are beginning to a ect gas markets as well, driving investments todevelop new resources and to expand global capacity or producing andtransporting lique ed natural gas.

Defning the sustainability challenge or ossil uelsFor oil and natural gas, ther e ore, the immediate policy challenge consistso nding ways to enhance and diversi y supplies in an environmentallyacceptable manner while, at the same time, reducing demand throughimproved end-use e ciency and increased use o alternatives such asbiomass-based uels (these topics are covered elsewhere in this report).Overall, however, the estimates in Table 3.1 suggest that resource adequacyper se is not likely to pose a undamental challenge or ossil uels withinthe next century and perhaps longer. Coal, in particular, is abundant bothglobally and in some o the nations that are likely to be among the worldslargest energy consumers in the 21st century (including the United States,China, and India). At present, coal is used primarily to generate electricity(the power sector accounts or more than 60 percent o global coalcombustion) and as an energy source or the industrial sector (e.g., orsteel production). More recently, rising oil and natural gas prices havegenerated renewed interest in using coal as a source o alternative liquid

uels.


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Without substantial technology improvements, however, increased reli-ance on coal to meet a wider array o energy needs while perhaps positive

rom an energy security standpoint would have serious environmentalimplications. Coal combustion in conventional pulverized-coal steam-elec-tric power plants and coal conversion to liquid or gaseous uels usingconventional methods that is, without carbon capture and sequestra-tion generates substantially larger quantities o carbon dioxide than doesthe direct combustion o oil or natural gas. O course, the carbon gener-ated in the process o converting coal to liquid uel can theoretically becaptured and sequestered (although ew i any recent proposals or coal-to-liquids production provide or carbon capture). The carbon in the resultingliquid uel is still released, however, when the uel is combusted, generat-ing in-use greenhouse gas emissions similar to those associated withconventional gasoline or diesel uel. From a climate perspective, there ore,coal-to-liquids technology generates emissions that are at best roughlyequivalent to those o the conventional uels it replaces. I carbon dioxideis not captured and sequestered as part o the conversion process, coal-to-liquids generate as much as two times the ull uel-cycle emissions o conventional petroleum.

Thus, climate impacts, more than resource depletion, are likely toemerge as the most important long-term constraint on ossil- uel use ingeneral, and coal use in particular. Current means o utilizing ossil uelsall produce emissions o carbon dioxide, the primary greenhouse gasdirectly generated by human activities. Todays known reserves total morethan twice the cumulative consumption that occurred between 1860 and1998 (Table 3.1). Even i uture consumption o ossil uels were limited totodays known reserves, the result o burning these uels (absent measuresto capture and sequester resulting carbon dioxide emissions) would be torelease more than double the amount o carbon that has already beenemitted to the atmosphere. Accordingly, much o the remainder o thisdiscussion ocuses on the prospects or a new generation o coal technolo-gies that would allow or continued use o the worlds most abundant

ossil- uel resource in a manner compatible with the imperative o reduc-ing climate-change risks.

Coal consumption is expected to grow strongly over the next severaldecades primarily in response to rapidly increasing global demand orelectricity, especially in the emerging economies o Asia. At present, coalsupplies nearly 40 percent o global electricity production; as a share o overall energy supply, coal use is expected to remain roughly constant oreven decline slightly, but in absolute terms global coal consumption is


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expected to increase by more than 50 percent over the next quartercentury rom 2,389 million tons oil equivalent in 2002 to 3,601 milliontons oil equivalent in 2030, according to the most recent IEA (2006) re er-ence case orecast. Increased consumption is all but inevitable given thatcoal is by ar the most abundant and cheapest resource available to Chinaand India as these countries continue industrializing and seek to raiseliving standards or hundreds o millions o people. China alone is expand-ing its coal-based electric-generating capacity by some 50 gigawatts peryear, or the equivalent o roughly one large (1 gigawatt) power plant perweek. At 1.9 billion metric tons in 2004, its coal use already exceeds that o the United States, Japan, and the European Union combined. At theannual growth rate o 10.9 percent in 2005, Chinas coal consumptioncould double in seven years. India is in a similar situation with rapideconomic growth and a population that is expanding more quickly thanChinas.

Advanced coal technology optionsTodays dominant coal-using technologies involve the direct combustion o

nely ground, or pulverized, coal in steam boilers. Older coal plants andcoal plants in much o the developing world operate at relatively low rateso e ciency and generate large quantities o sul ur dioxide, nitrogenoxides, soot, and mercury as well as carbon dioxide. These pollutantscreate substantial public health risks, especially where emissions remainlargely unregulated (as is the case in many developing countries). In someparts o the world, emissions rom coal- red power plants also contributeto pollution transport problems that transcend national and even continen-tal borders. In addition, coal mining itsel typically produces substantiallocal environmental impacts and poses signi cant health and sa ety risksto miners. Over time, pulverized coal technology has improved to achieveelectricity-production e ciencies in excess o 40 percent and sophisticatedpollution control technologies have been developed that can reliablyreduce sul ur, nitrogen, particulate, and toxic air emissions by 97 percentor more. Importantly, these technologies do not reduce carbon dioxideemissions, which remain essentially uncontrolled in current conventionalcoal applications.

Signi cant environmental bene ts can there ore be achieved simply byraising the e ciency o conventional pulverized coal plants (thereby reduc-ing uel consumption and carbon emissions per unit o electricity gener-ated) and by adding modern pollution controls. Figure 3.1 plots the average


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conversion e ciency o coal- red power plants in di erent countries overtime. The graph shows that several countries have achieved signi cantimprovements in average e ciency over the last decade, but that urtherprogress has slowed or plateaued in several cases. Remaining variation inaverage power-plant per ormance across di erent countries suggests thereis room or urther gains and that substantial carbon reductions can beachieved rom e ciency improvements at conventional coal plants. Mean-while, a new generation o coal technologies o ers promise or urtherimproving e ciency, generating use ul co-products, and enhancing oppor-tunities or cost-e ective carbon capture and sequestration.

Two technologies that improve on conventional pulverized coal technol-ogy have been under development or some time and are already incommercial use worldwide. So-called supercritical systems generatesteam at very high pressure, resulting in higher cycle e ciency and loweremissions. Currently, about 10 percent o orders or new coal- red plantsare or supercritical steam systems. O the more than 500 units o this typethat already exist, most are in the countries o the ormer Soviet Union,Europe, and Japan. Another technology, known as fuidized-bed combus-

Figure 3. E fciency o coal-fred power production

Source:Graus and Worrell, 200 .

23

25

27

29

31

33

35

37

39

41

43United StatesUK & IrelandNordic countriesKorea

JapanIndiaGermany

France

China

Australia

20032002200120001999199819971996199519941993199219911990

Efciency (%)


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IAC Report| Energy supply

tion, was developed as early as the 1960s. By combusting coal on a hot bedo sorbent particles, this technology capitalizes on the unique characteris-tics o fuidization to control the combustion process. Fluidized-bedcombustion can be used to burn a wide range o coals with varying sul urand ash content while still achieving advanced levels o pollution control;currently, some 1,200 plants around the world use this technology. Fluid-ized-bed systems have actually become less common in power plant appli-cations, however, because the technology is best suited or smaller-scaleapplications (e.g., 30 megawatt units).

In contrast to supercritical or fuidized-bed systems, urther advances incoal technology are likely to involve rst gasi ying the coal rather thanburning it directly in pulverized orm. Gasi cation converts coal (or poten-tially any carbon-containing material) into a synthesis gas composedprimarily o carbon monoxide and hydrogen. The gas, in turn, can be usedas a uel to generate electricity; it can also be used to synthesize chemicals(such as ammonia, oxy-chemicals, and liquid uels) and to produce hydro-gen. Figure 3.2 describes the potential diversity o applications or coalgasi cation technology in schematic orm.

Gasi cation technology itsel is well developed (worldwide, some 385modern gasi ers were in operation in 2004), but historically it has beenused primarily in industrial applications or the production o chemicals,with electricity generation as a secondary and subordinate process. Morerecently, interest has ocused on coal-based integrated gasi cationcombined cycle (IGCC) technology as an option or generating electricity.

Figure 3.2 From coal to electricity and usable products

COALCleaning/

Benefciation

Pulverizedcombustion

Fluidized bedcombustion

Gasifcation

Directlique action

Powergeneration

Chemicalconversion

Syn gas

Electricity

Methane

Hydrogen

Liquid uels


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The gasi cation process not only allows or very low emissions o conven-tional pollutants, it acilitates carbon capture and sequestration and allows

or the simultaneous production o valuable co-products, including liquiduels. Given that high levels o pollution control can also be achieved in

state-o -the-art pulverized coal plants, the latter two attributes provide theprimary motivation or current interest in coal IGCC.

The rst IGCC power plant was tested in Germany in the 1970s, butcommercial-scale applications o this technology or electricity generationremain limited to a hand ul o demonstration acilities around the world.This situation may change signi cantly in the next ew years, given rapidlygrowing interest in IGCC technology and recent announcements o a newround o demonstration plants in the United States and elsewhere. At thesame time, concerns about cost, reliability, and lack o amiliarity withIGCC technology in the electric power industry are likely to continue topresent hurdles or some time. Cost estimates vary, but run as much as2025 percent higher or a new coal IGCC plant compared to a conven-tional pulverized coal plant, particularly i the conventional plant lacksmodern pollution controls or sul ur and nitrogen oxide emissions. Inaddition, gasi cation-based processes are more sensitive to coal quality;

rom a cost perspective, the use o coals with lower heating values urtherdisadvantages IGCC technology relative to the conventional alternatives.This may be a signi cant issue in countries like China and India that havelarge deposits o relatively poor-quality coal.

The higher cost o coal IGCC technology can obviously create a majorimpediment in some developing countries where access to capital may beconstrained and where competing economic and development needs areparticularly urgent. O ten, advanced coal systems are also more compli-cated to construct and operate and more di cult to maintain. This neednot be an impediment per se (apart rom the cost implications) sinceconstruction and operation can usually be outsourced to large multi-national companies, but the need to rely on outside parts and expertisemay be viewed as an additional disadvantage by some countries. To over-come these obstacles, some countries have adopted incentives and otherpolicies to accelerate the demonstration and deployment o IGCC technol-ogy, but the vast majority o new coal plants proposed or under construc-tion in industrialized and developing countries alike still rely on pulver-ized coal technology. Given that each new acility represents a multi-decade commitment in terms o capital investment and uture emissions(power plants are typically expected to have an operating li e as long as 75years), the importance o accelerating the market penetration o advanced


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coal technologies is di cult to overstate.Future e orts to speed the deployment o cleaner coal technologies

generally and IGCC technology in particular will be a ected by severalactors: the cost o competing low-emission options, including post-

combustion carbon capture and sequestration or conventional coal tech-nologies as well as natural gas and renewable technologies; the existenceo continued support in the orm o incentives, public unding or relatedresearch and development (R&D) activities, and avorable regulatory treat-ment; and perhaps most importantly the evolution o environmentalmandates, especially as regards the control o greenhouse gas emissions. 28 The next section o this chapter provides a more detailed discussion o theprospects or di erent coal technologies including conventional pulver-ized coal technology and oxy- uel combustion as well as coal gasi cationin combination with carbon capture and sequestration. Among otherthings, it suggests that or power production alone (that is, leaving asideopportunities to co-produce liquid uels), the cost advantages o amiliarpulverized coal technology relative to IGCC could largely o set the costdisadvantages o post-combustion carbon capture. Another important

nding is that sequestration is not currently expected to pose any insur-mountable challenges, either rom the standpoint o available geologicrepositories or rom the standpoint o the technology needed to capture,transport, and inject carbon waste streams. Nevertheless, carbon captureand sequestration will generally represent an added cost (except perhaps insome instances where it can be used or enhanced oil recovery) and experi-ence with sequestration systems at the scale necessary to capture emis-sions rom commercial power plants remains limited at present.

Whichever technology combination proves most cost-e ective andattractive to the investors, the price signals associated with uture carbonconstraints will need to be predictable and su cient in magnitude to over-come remaining cost di erentials when those cost di erentials refect notonly the cost and risk premium associated with advanced coal technologiesbut the cost and easibility o capturing and sequestering carbon. Progresstoward reducing those cost di erentials would greatly enhance the pros-

8 The gasification process also facilitates the capture of conventional air pollutants, likesulfur and nitrogen oxides. Regulatory requirements pertaining to the control of these andother pollutants (like mercury) could therefore also affect the cost competitiveness of IGCCsystems relative to conventional pulverized coal systems. Given that effective post-combus-tion control technologies for most of these non-greenhouse gas emissions are already well-demonstrated and commercially available, carbon policy is likely to be a decisive factorgoverning future IGCC deployment.


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pects or a success ul transition toward sustainable energy systems giventhe relative abundance and low cost o the worlds coal resource base.Besides providing electricity, advanced coal gasi cation systems withcarbon capture and sequestration could become an important source o alternative transportation uels.

Technologies already exist or directly or indirectly (via gasi cation)converting solid hydrocarbons such as coal to liquid uel. Such coal-to-liquids systems may become increasingly attractive in the uture, espe-cially as countries that are coal-rich but oil-poor con ront rising petroleumprices. Un ortunately, existing lique action processes are energy intensive,require large quantities o water, and generate very substantial carbonemissions. Modern, integrated gasi cation systems that produce both elec-tricity and clean-burning liquid uels o er the potential to greatly improveoverall cycle e ciency and environmental per ormance, especially i coupled with cost-e ective carbon capture and sequestration.

In the near uture, new coal IGCC acilities are most likely to beconstructed in the United States, Japan, and to a lesser extent, given rela-tively small growth in overall coal capacity the European Union. Somedeveloping countries, notably China and India, have also expressed stronginterest in this technology. In sum, knowledgeable observers expressdi erent degrees o optimism (or pessimism) about the prospects oraccelerated di usion o advanced coal technologies, but there is littledisagreement about the nature o the obstacles that stand in the way orabout how much may be at stake in success ully overcoming them. 29

Carbon capture and sequestrationSuccess ul development o carbon capture and sequestration technologycould dramatically improve prospects or achieving the goal o reducinggreenhouse gas emissions. From a technical standpoint, several optionsexist or separating and capturing carbon either be ore or a ter the point o

uel combustion. In addition, the magnitude o potentially suitable storagecapacity in geologic repositories worldwide is thought to be su cient toaccommodate many decades (and perhaps centuries) o emissions atcurrent rates o ossil- uel use. At the same time, however, substantialhurdles must be overcome: large-scale e orts to capture and sequestercarbon will add cost, will require additional energy and new in rastructure(including pipelines to transport the carbon dioxide to sequestration sites

9 For additional information on advanced coal technologies, see the MIT ( 00 ) report, TheFuture of Coal.


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and wells to inject it underground), may necessitate new institutional andregulatory arrangements, and may have di culty winning public accept-ance. Operational experience to date with some o the requisite systems orimplementing carbon capture and sequestration has come primarily romthe chemical processing, petroleum re ning, and natural gas processingindustries and rom the use o compressed carbon dioxide or enhancedoil recovery. Several demonstration projects speci cally aimed at exploringcarbon capture and sequestration as a greenhouse gas-reduction strategyare now proposed or underway and two industrial-scale acilities arecurrently implementing carbon dioxide storage or the sole purpose o avoiding emissions to the atmosphere. Nevertheless, large-scale deploy-ment o such systems is likely to continue to be slow except in thoseinstances where enhanced oil recovery provides avorable economic oppor-tunities without compelling regulatory or market signals to avoid carbondioxide emissions.

carbon captureThe most straight orward way to capture carbon rom ossil energy sys-tems is to recover it a ter combustion rom the fue gases o large combus-tors such as power plants. On a volume basis, carbon dioxide typically ac-counts or between 3 percent (in the case o a natural gas combined-cycleplant) and 15 percent ( or a coal combustion plant) o the fow o exhaustgases rom such acilities. Though several options or post-combustioncapture are available, the pre erred approach exploits a reversible chemi-cal reaction between an aqueous alkaline solvent (usually an amine) andcarbon dioxide.

Because this approach involves separating carbon dioxide at relativelylow concentrations rom a much larger volume o fue gases, and becausethe regeneration o amine solvent and other aspects o the process areenergy intensive, post-combustion carbon capture carries signi cant costand energy penalties. According to a IPCC (2005) literature review, the

uel requirements or a new steam electric coal plant with an amine scrub-ber are anywhere rom 2440 percent higher than or the same plant vent-ing carbon dioxide. Put another way, carbon capture reduces the e ciencyo the power plant such that its electricity output per unit o uel consumedis reduced by 2030 percent.

Another approach, known as oxy- uel combustion uses oxygen instead o air or combustion producing an exhaust stream that consists primarily o water and carbon dioxide. This option is still under development. A third


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approach is to separate carbon prior to combustion by rst converting thesubject uel to a synthesis gas composed primarily o carbon monoxideand hydrogen. The carbon monoxide in the synthesis gas is then reactedwith steam to orm more hydrogen and carbon dioxide. Typically, carbondioxide is removed rom the synthesis gas using a physical solvent thatdoes not chemically bind the carbon dioxide as amines do. At that point,the avored approach or electricity production is to burn the remaininghydrogen-rich synthesis gas in a gas turbine/steam turbine combined-cycle power plant. Alternatively, the process can be adjusted to leave ahigher carbon-to-hydrogen ratio in the syngas and then convert it, usingFischer-Tropsch or other chemical processes, to synthetic liquid uels.

E orts to explore pre-combustion carbon capture have mostly ocusedon IGCC technology to generate power using coal, petcoke or other petro-leum residues, or biomass. The gasi cation process o ers potential bene-

ts and some o setting cost savings with respect to conventional-pollutant control. On the other hand, it remains or now more expensiveand until more experience is gained with ull-scale demonstrationplants less amiliar than conventional combustion systems in powerplant applications. However, interest in advanced coal systems has intensi-

ed signi cantly in recent years; and the marketplace or IGCC technol-ogy, at least in some parts o the world, now appears to be evolving rapidly.

Coal IGCC accounts or less than 1 gigawatt-electricity out o the 4 giga-watts- electricity o total IGCC capacity that has been built most o therest involves gasi cation o petroleum residues. While there has been onlymodest experience with coal IGCC without carbon capture, experiencewith gasi cation and capture-related technologies in the chemical processand petroleum-re ning industries makes it possible to estimate capturecosts or coal IGCC with about the same degree o con dence as orconventional steam-electric coal plants. Importantly, the decisive advan-tage o coal IGCC in terms o carbon capture is or bituminous coals,which have been the ocus o most studies. The situation is less clear orsubbituminous coals and lignites, or which very ew IGCC analyses havebeen published. More study is needed to clari y the relative ranking o carbon capture and sequestration technologies or lower-quality coals.

The IPCC (2005) literature review summarized available in ormation oncarbon capture and sequestration costs. It concluded that available meth-ods could reduce carbon dioxide emissions by 8090 percent and that,across all plant types, the addition o carbon capture increases electricityproduction costs by US$1236 per megawatt-hour. The IPCC review


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urther concluded that the overall cost o energy production or ossil- uelplants with carbon capture ranged rom US$4386 per megawatt-hour.The cost or avoiding carbon dioxide emissions (taking into account anyextra energy requirements or the capture technology and including thecompression but not the transport o captured carbon dioxide) ranged

rom US$1374 per metric ton o carbon dioxide.According to the IPCC, most studies indicated that IGCC plants are

slightly more costly without capture and slightly less costly with capturethan similarly sized [pulverized coal] plants, but the di erences in cost orplants with [carbon dioxide] capture can vary with coal type and other local

actors. Moreover, in all cases, [carbon dioxide] capture costs are highlydependent upon technical, economic and nancial actors related to thedesign and operation o the production process or power system o inter-est, as well as the design and operation o the [carbon dioxide] capturetechnology employed. Thus, comparisons o alternative technologies, orthe use o [carbon capture and storage] cost estimates, require a speci ccontext to be meaning ul. In other words, no clear winner has yetemerged among competing options or carbon capture on the contrary, ahealthy competition is currently underway between di erent technolo-gies and it is likely that di erent approaches will prove more cost-e ec-tive in di erent contexts and or di erent coal types.

carbon sequestrationThree types o geological ormations are being considered or sequester-ing carbon dioxide: depleted oil and gas elds; deep salt-water lled or-mations (saline ormations); and deep unminable coal ormations (Figure3.3). These ormations occur in sedimentary basins, where layers o sand,silt, clay, and evaporate have been compressed over geological time to

orm natural, impermeable seals capable o trapping buoyant fuids, suchas oil and gas, underground. Most experience to date with the technolo-gies needed or carbon sequestration has come rom the use o carbondioxide or enhanced oil recovery in depleted oil elds an approach thatis likely to continue to o er signi cant cost-advantages in the near term,given current high oil prices. As a long-term emissions-reduction strategy,however, carbon sequestration would need to expand beyond enhanced oilor natural gas recovery to make use o saline ormations, which have thelargest storage potential or keeping carbon dioxide out o the atmosphere.

Research organizations have undertaken local, regional, and globalassessments o potential geologic sequestration capacity since the early


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1990s (IPCC, 2005). In general, the most reliable in ormation is availablerom oil and gas reservoirs; the least reliable in ormation is available or

coal seams. The reliability o capacity estimates or saline ormationsvaries, depending on the quality o geological in ormation available andthe method used to calculate capacity. Table 3.2 summarizes the mostcurrent assessment o sequestration capacity. Saline ormations have thelargest potential capacity, but the upper estimates are highly uncertain,due both to a lack o accepted methodology or assessing capacity and alack o data, especially or some parts o the world such as China, LatinAmerica, and India). Overall, current estimates suggest that a minimumo about 2,000 gigatons o carbon dioxide sequestration capacity is avail-able worldwide; roughly equivalent to 100 years o emissions at the currentglobal emissions rate o roughly 24 gigatons per year. 30

0 The amount of carbon dioxide storage capacity available underground should not beconsidered a fixed quantity. Rather, pore space for storage in sedimentary formations is likeany other fuel or mineral reserve where the quantity available over time is likely to increaseas science and technology improve and as the price people are willing to pay for the resourcerises.

Figure 3.3 Schematic illustration o a sedimentary basin with a number o geologicalsequestration options

Source:IPCC, 2005


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Table 3.2 World-wide CO2 geological sequestration capacity estimatesReservoir type Lower estimate of storage

capacity (GtCO2)

Upper estimate of storage

capacity (GtCO2)Oil and gas felds 675 (a) 900(a)

Unminable coal seams(enhance coal-bed methane)

315 200

Deep saline ormations 1,000 Uncertain, but possibly 10 4

(a)These estimates would increase by 25 percent i undiscovered reserves wereincluded. Note: GtCO2 re ers to gigatons carbon dioxide.

Source:IPCC, 2005

There are several reasons to think that carbon dioxide sequestration canbe essentially permanent. The existence o natural reservoirs o oil, gas, andcarbon dioxide by itsel is indicative. Further evidence comes rom extensiveexperience with methods or injecting and storing fuids underground inother industrial contexts and rom more recent experience with severalearly demonstration projects. Finally, the existence o several naturaltrapping mechanisms, which together tend to diminish the likelihood o leakage over time, and results rom computer simulation models providegrounds or additional con dence in the ability to achieve very long-termstorage in underground reservoirs.

In its recent assessment, the IPCC concluded that the raction o carbondioxide retained in appropriately selected and managed geological reservoirsis very likely to exceed 99% over 100 years, and is likely to exceed 99% over1,000 years (IPCC, 2005). Past experience also indicates that the risks associ-ated with geologic sequestration are likely to be manageable using standardengineering controls, although regulatory oversight and new institutionalcapacities will likely be needed to enhance sa ety and to ensure robust strate-gies or selecting and monitoring sites. Employed on a scale comparable toexisting industrial analogues, the risks associated with carbon capture andsequestration are comparable to those o todays oil and gas operations.

Even a ter the carbon dioxide is injected, long-term monitoring will beimportant or assuring e ective containment and maintaining public con -dence in sequestration acilities. While carbon dioxide is generally regardedas sa e and non-toxic, it is hazardous to breathe at elevated concentrations andcould pose risks i it were to accumulate in low-lying, con ned, or poorlyventilated spaces. Past experience suggests that leakage or sur ace releases aremost likely to occur at the injection site or at older, abandoned wells that were


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not properly sealed; ortunately, several methods exist or locating suchleaks and monitoring injection wells. Nevertheless, public acceptance o underground carbon sequestration in light o the potential or leakage andassociated sa ety risks could emerge as a signi cant issue especially inthe early phases o deployment and will need to be addressed.

Cost penalties or carbon capture and sequestration can be broken downinto capture costs (which include drying and compressing the carbon diox-ide), costs or transporting carbon dioxide to storage sites, and storagecosts. The 2005 IPCC literature review arrived at an average, overall cost

gure o US$2095 per ton o carbon dioxide captured and sequesteredbased on the ollowing estimates: capture costs ranging rom US$1575per ton; pipeline transport costs ranging rom US$18 per ton (US$24per ton per 250 kilometers o onshore pipeline transport); geologic storagecosts o US$0.58.0 per ton (excluding opportunities or enhanced oilrecovery); and monitoring costs o US$0.10.3 per ton.

planned and existing carbon capture and sequestration projectsThe rst commercial amine scrubber plant to employ post-combustioncarbon dioxide capture has been operating in Malaysia since 1999. Thisplant recovers approximately 200 tons o carbon dioxide per day or ureamanu acture (equivalent to the emission rate or a 41 megawatts-ther-mal coal combustor). An IGCC plant with carbon capture has not yetbeen built and, as noted previously, experience with coal IGCC systems

or power generation (even without carbon capture and sequestration)remains limited. The rst example o an IGCC unit with capture and se-questration is likely to be a 500 megawatts-electricity unit that will gasi ypetroleum coke at the Carson re nery in southern Cali ornia and use thecaptured carbon dioxide or enhanced oil recovery in nearby onshore oil

elds. The project will be carried out by BP and Edison Mission Energyand is scheduled to come on line early in the next decade.

In terms o geological sequestration or the purpose o avoiding carbonemissions to the atmosphere, two industrial-scale projects are operatingtoday: a ten year old project in the Norwegian North Sea and a more recentproject in Algeria. A third project in Norway is expected to be operationalin late 2007. (Industrial-scale geologic sequestration is also being imple-mented at the Weyburn project in Canada, but in this case or purposes o enhanced oil recovery.) To date, all o these projects have operated sa elywith no indication o leakage. Plans or new sequestration projects are nowbeing announced at a rate o several each year, with plans or urther large-


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available production capacity and demand. At present, Canada is produc-ing about 1 million barrels per day o unconventional oil rom tar sands,and Venezuela has started to tap its substantial heavy oil reserves.

Current technologies or extracting unconventional oil may not,however, be sustainable rom an environmental standpoint. Depending onthe type o resource being accessed and the technologies used, currentextraction methods are highly energy-intensive and thus generate signi -cantly higher greenhouse gas emissions compared to conventional oilproduction. In many cases they also produce substantial air, water, andground sur ace pollution. Unless technologies can be developed thataddress these impacts and unless the environmental costs o extraction(potentially including carbon capture and sequestration) are included,e orts to develop unconventional oil supplies are unlikely to be environ-mentally sustainable.

Other ossil- uel related technologies that could impact the longer-termsupply outlook or conventional uels, with potentially important implica-tions or energy-security and sustainability objectives, include technologies

or enhanced oil recovery, or collecting coal bed methane, or accessingtight gas (natural gas that is trapped in highly impermeable, hard rock ornon-porous sandstone or limestone), and or the underground gasi cationo coal.

The situation or methane hydrates is more complex and remains, ornow, more speculative given that the technologies needed to tap thisresource have not yet been demonstrated. Hydrates occur under certainhigh-pressure and low-temperature conditions when molecules o gasbecome trapped in a lattice o water molecules to orm a solid, ice-like struc-ture. Huge deposits o methane hydrate are thought to exist in the Arcticregion, both on- and o -shore, and in other locations below the ocean foor(typically at depths ranging rom 3001,000 meters). These hydrates holdsome promise as a uture source o energy, both because the size o thepotential resource base is enormous and because natural gas (methane) is arelatively clean-burning uel with lower carbon density than oil or coal.Ironically, however, there is also concern that the same deposits could play anegative role in accelerating climate change i warming temperatures causethe hydrates to break down, producing large, uncontrolled releases o meth-ane a potent warming gas directly to the atmosphere.

Technologies or exploiting methane hydrates are in the very early stageso development. As in conventional oil production, likely methods couldinvolve depressurization, thermal stimulation, or possibly solvent injec-


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tion. The act that hydrates are stable only within a narrow band o temper-ature and pressure conditions complicates the technology challenge andcreates some potential or signi cant unintended consequences (e.g.,destabilizing sea beds or generating large accidental releases o methaneto the atmosphere). At present, both the opportunities and the risks arepoorly understood, and technologies or economically accessing the meth-ane trapped in naturally occurring hydrates have yet to be demonstrated.Japan currently leads global e orts to remedy this gap and has created aresearch consortium with the aim o developing technologies easible orcommercial-scale extraction by 2016.

In summary: Fossil uelsDependence on ossil uels or a dominant share o the worlds energyneeds is at the core o the sustainability challenge humanity con ronts inthis century. The combustion o natural gas, oil, and coal generates carbondioxide emissions along with other damaging orms o air pollution. Theworlds steadily expanding stock o coal- red power plants is expected tocreate signi cant climate liabilities or decades to come. At the same time,the prospect o an intensi ying and potentially destabilizing global compe-tition or relatively cheap and accessible oil and natural gas supplies isagain stoking urgent energy security concerns in many parts o the world.For many poor countries, meanwhile, outlays or oil and other imported

uel commodities consume a large share o oreign exchange earnings thatcould otherwise be used to invest in economic growth and social develop-ment.

In this context, the undamental problem with ossil uels is not primar-ily that they are in short supply. Coal in particular is relatively inexpensiveand abundant worldwide and it is already being looked to as an alternativesource o liquid and gaseous uel substitutes in the context o tighteningmarkets and rising prices or oil and natural gas. Un ortunately, expandedreliance on coal using todays technologies would add substantially torising levels o greenhouse gases in the atmosphere, creating a majorsource o environmental as well as (given the potential consequences o global warming) social and economic risk.

Managing these risks demands an urgent ocus on developing economi-cal, low-carbon alternatives to todays conventional uels, along with newtechnologies or using ossil uels that substantially reduce their negativeimpacts on environmental quality and public health. The availability o cost-e ective methods or capturing and storing carbon dioxide emissions,


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in particular, would signi cantly improve prospects or achieving sustain-ability objectives in this century and should be the ocus o sustainedresearch, development, and deployment e orts in the years ahead. Currenttrends in ossil- uel consumption are unlikely to change, however, withouta decisive shi t in market and regulatory conditions. Government policiesmust be re-aligned: subsidies or well-established conventional uelsshould be phased out and rm price signals or avoided greenhouse gasemissions o su cient magnitude to o set cost di erentials or lower-carbon technologies must be introduced.

3.2 Nuclear powerNuclear power supplies approximately 16 percent o todays global electric-ity demand and, along with hydropower, accounts or the largest share o power generation rom non-carbon energy sources. More than two dozenreactors are now under construction or will be re urbished over the next

ew years in Canada, China, several European Union countries, India,Iran, Pakistan, Russia, and South A rica. The worlds existing base o nuclear capacity includes some 443 reactor units with a combined capacityo about 365 gigawatts (Figure 3.4). The great majority o these units(nearly 80 percent) are more than 15 years old.

While total nuclear electricity output is likely to grow modestly withinthis decade, refecting the addition o new capacity now planned or underconstruction, the overall nuclear contribution is expected to plateau there-a ter and even decline slightly over the next two decades as more plantsretire than are added worldwide and as growth in nuclear plant output allsbehind growth in overall electricity demand. As a result, the most recentIEA re erence case orecast (Figure 3.5) indicates that nuclear powersshare o global electricity production will all to just 12 percent by 2030.The IEA estimate o total nuclear output or 2030 is just under 3,000terawatt-hours, only slightly more than the 2,500 terawatt-hours producedby the industry in 2002. These projections are roughly consistent withprojections released by the International Atomic Energy Agency (IAEA) in2004 that show the nuclear contribution alling to 1314 percent o globalelectricity production in 2030 under high- and low-growth assumptions. 31

The IAEAs high-growth projections indicate 59 gigawatts of nuclear capacity in 0 0compared to 4 7 gigawatts in the IAEAs low-growth projection. As a share of overall elec-tricity production, however, the nuclear contribution is actually slightly smaller in the high-growth case ( percent) than in the low-growth case ( 4 percent). This is because overallelectricity demand grows even faster than nuclear capacity in the high-growth case (IAEA,

004).


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Current expectations o fat or declining nuclear output refect an assump-tion that high up ront capital cost 32 and other obstacles will continue todisadvantage nuclear power relative to other options or new electric-generating capacity, particularly compared to conventional, pulverized-coalpower plants.

Current interest in reversing this trend and in supporting an expandedrole or nuclear power is driven largely by climate change considerationsand by concern that the other non-carbon options alone including energye ciency, renewable energy, and advanced ossil technologies with carbonsequestration will not be adequate to reconcile burgeoning global energydemands (especially growing demand or electricity) with the need orgreenhouse gas mitigation. On the one hand, nuclear technology o ersimportant advantages: it can provide a reliable, large-scale source o basel-oad electric-generating capacity; 33 it does not produce emissions o green-house gases or conventional air pollutants; and supplies o nuclear uel, inthe orm o uranium ore, are relatively abundant worldwide. 34 In addition,

Operating costs for nuclear plants are generally low relative to fossil-fuel power plants. Conversely, a disadvantage of nuclear power plants in some contexts is that they mustoperate in a baseload capacity. One possibility for using nuclear power generation during off-peak hours would be to make use of another energy carrier, such as hydrogen. The produc-tion of hydrogen through electrolysis could provide one means of storing carbon-free nuclearenergy at times of low demand.

4 The sustainability of uranium as long-term energy source has been much debated, with

Figure 3. Existing and planned/proposed nuclear reactors in the world

Source: International Nuclear Sa ety Center, Argonne National Laboratory


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the potential exists to use nuclear power or high-temperature hydrogenproduction, which would enable the technology to serve a wider array o energy needs besides electricity production. Plans or hybrid reactors thatwould co-produce hydrogen and electricity have been proposed.

Other actors that are likely to continue motivating some governments tosupport nuclear power include energy-security concerns, especially in light

some arguing that limited supplies of low-cost ore will constrain nuclear power productionwithin this century absent progress toward developing acceptable closed fuel-cycle systems.Current market conditions suggest, however, that adequacy of available uranium suppliesis unlikely to be an issue for some time. For example, a MIT ( 00 ) study concluded that theworldwide supply of uranium ore was sufficient to fuel the deployment of ,000 new reac-tors in the next 50 years and to supply this new fleet of plants over a 40-year operating life.In addition, uranium prices around the world have been relatively low and stable and thegeographic distribution of uranium deposits is such that the fuel itself is likely to be lesssusceptible to cartels, embargoes, or political instability. Should supply constraints eventu-ally cause uranium prices to rise, this would prompt further exploration that would likelyyield a substantial increase in estimated reserves; longer term, options might also emerge forextracting uranium, which is a relatively common element, from unconventional sources likesea water.

Figure 3.5 Projected world incremental electricity generation by uel type

Note: terawatt-hour (TWh) equals 3. petajoules.

Source: IEA, 200

-500

500

1,500

2,500

3,500

4,500

CoalGasOther renewablesHydroNuclearOil

2015-20302004-2015

TWh


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o recent volatility in world oil markets and the perception that develop-ment o an indigenous nuclear capability o ers a route to technologicaladvancement while con erring a certain elite status among the worldsindustrialized powers. Finally, e orts to build a domestic nuclear industrycan provide use ul ambiguity or governments that wish to leave open thepossibility o developing nuclear weapons. Associated equipment (like hotlaboratories), operator training, and experience with health and sa etyissues are some obvious examples o the potential carry-over rom nuclearpower technology to nuclear weapons capability that is latent in any civil-ian nuclear power program.

But nuclear power also su ers rom several di cult and well-knownproblems that are likely to continue to constrain uture investments in thistechnology. Chie hurdles or primary investors include high up ront capi-tal cost, siting and licensing di culties, public opposition, and uncertain-ties regarding uture liabilities or waste disposal and plant decommission-ing. In addition to and inextricably intertwined with these issues, manyexperts agree that concerns about reactor sa ety, waste disposal, andnuclear weapons proli eration must be resolved i nuclear technology is toplay a prominent role in the transition to a sustainable global energy mix.A urther obstacle in many parts o the world relates to the need or signi -cant amounts o capital and considerable institutional capacity and techni-cal expertise to success ully build and sa ely operate nuclear power plants.

Some o these issues could be resolved by the success ul development o nuclear usion (as opposed to fssion) technology, but this is a long-termprospect. Even i nuclear usion ultimately proves easible, the technologyis unlikely to be available until mid-century or later.

In sum, nuclear power plants are much more complicated than ossil-uel power plants, and the consequences o accidents are ar greater. Inact, potential dependency on other countries or technological expertise or

nuclear uel may discourage some governments rom developing nuclearcapacity, even as a desire or technology status or energy security maymotivate others in the opposite direction. Brazils decision in the 1970s notto pursue a relationship with Germany that would have led to a majorexpansion o Brazils nuclear power capability was driven by these types o considerations.

Current, near-term plans to expand nuclear-generating capacity arelargely centered in Asia with India, China, and Japan leading the way interms o numbers o new plants proposed or under construction at pres-ent. Increasingly, these countries and others are interested in developingand building their own reactor designs. Figure 3.6 shows the regional


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breakdown o new nuclear capacity in the 2004 IAEA high-growth projec-tions or 2030. According to this gure, the largest increase in nuclearcapacity (in terms o net gigawatts added) will occur in the Far East, whilethe strongest growth in percentage terms will occur in the Middle East andSouth Asia. Net capacity also increases, albeit less dramatically, in Easternand Western Europe, but stays essentially fat in North America.

Most o the new plants expected to come on line in the next ew yearsincorporate substantial modi cations and improvements on existing reac-tor designs, including sa ety eatures that simpli y cooling requirements inthe event o an accident. These designs are there ore expected (though notyet demonstrated) to provide more reliable sa ety per ormance at loweroverall cost.35 E orts are already underway to develop a third generation o

5 Most of the plants that are now under construction or have recently come on line use GENIII+ reactor designs. They are deemed passively safe because they typically rely on gravity,natural circulation, and compressed air to provide cooling of the reactor core and contain-ment structure in the event of a severe accident. Compared to the actively safe systems usedin existing reactors, these designs require fewer valves, pumps, pipes, and other components.Note that the gas-cooled pebble-bed modular reactor is classified as a GEN III+ design but issafe even in the absence of any coolant.

Figure 3. Regional distribution o global nuclear capacity in the IAEAs high projection

Source: IAEA, 200 ; McDonald, 200 .

0

100

200

300

400

500

600

Far East

Southeast Asia & Pacific

Middle East & South Asia

Africa

Eastern Europe

Western Europe

Latin America

North America

2030202020102003

Gigawatt electricity (GWe)


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nuclear reactor designs that would be passively sa e, whereby the chanceo a core meltdown would be (nearly) impossible, even in the event o atotal loss o operation o the reactor control systems (Box 3.1). The ourth-generation reactors could, in addition to incorporating passive sa ety

eatures, achieve urther improvements in cost and per ormance whilealso reducing waste disposal requirements by minimizing uel throughputand/or recycling spent uel.

In 2002, ten nations and the European Union ormed the Generation IVInternational Forum (GIF) to promote international collaboration in devel-oping a ourth generation o nuclear plants. 36 A ter more than two years o study, each participating nation agreed to take the lead in exploring at leastone o several di erent reactor types or potential deployment by 2030.The reactor types identi ed by the GIF as most promising include the veryhigh temperature gas reactor, the super-critical water reactor, the lead-cooled ast reactor, the sodium-cooled ast reactor, the gas-cooled ast reac-tor, and the molten salt reactor. In addition, other potential reactor designshave been studied or developed in recent years, including designs orsmaller, modular and even transportable types o reactors, as well asdesigns that are geared toward the production o hydrogen.

At this point, none o the proposed ourth-generation reactor designshave been built, though a number o countries are pursuing activeresearch and development e orts and have adopted policies aimed at acil-itating the construction o new plants. Even while many o the new designso er important advantages over older generations o reactors at least onpaper the industrys longer-term outlook remains uncertain. Theremainder o this section provides urther detail about the speci c chal-lenges that now con ront nuclear power and reviews current prospects oraddressing these challenges with urther improvements in reactor designand nuclear technology.

Challenges acing nuclear power Nuclear usion remains a distant alternative to ssion technologies atpresent. In nuclear usion, energy is produced by the usion o deuteriumand tritium, two isotopes o hydrogen, to orm helium and a neutron.

6 The United States led the formation of the GIF, which also includes the European Union,Argentina, Brazil, Canada, France, Japan, South Korea, South Africa, Switzerland, and theUnited Kingdom. Russia was not included due to differences over assistance to Irans nuclear program. However Russia has initiated a separate program to address the develop-ment of advanced reactors: the IAEA International Project on Innovative Nuclear Reactorsand Fuel Cycles.


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E ectively unlimited quantities o the primary uels, deuterium and lith-ium ( rom which tritium is produced), are easily available. Due to low uelinventory, a runaway reaction or meltdown o a usion system is not possi-ble. Radioactive waste rom usion decays in 100 years to activity levelssimilar to that rom coal. The proli eration risk rom usion is minimalsince any ertile materials would be easily detectable.

Box 3.1 Four generations of nuclear reactors

The frst nuclear power plants to be de-veloped, many small, are now calledGeneration I (GEN I) reactors. Perhapsthe only GEN I reactors still in operationare six small (under 250 megawatts-electricity) gas-cooled plants in the Unit-ed Kingdom. All others have been shutdown.Most reactors operating today are Gen-eration II reactors. Designed in the late

9 0s and 9 0s, they are o two maintypes, either pressurized water reactor(PWR) or boiling water reactor (BWR).GEN II reactors have achieved very highoperational reliability, mainly throughcontinuous improvement o their oper-ations.Generation III reactors were designed inthe 990s, and geared to lower costsand standardized designs. They havebeen built in the last ew years in Franceand Japan. More recent designs are la-

beled GEN III+ reactors and are likely tobe constructed in the coming years. Typ-ical examples are the advanced boilingwater reactor (ABWR) in Japan, the newPWR in Korea,the evolutionary powerreactor (EPR) in France, and the eco-nomic simplifed boiling water reactor(ESBWR) and the AP- 000 (advancedpassive) in the United States .The GEN III+ light water reactor (LWR)are based on proven technology butwith signifcant improvements and, inthe case o the AP- 000 and ESBWR,with passive emergency cooling sys-tems to replace the conventional power-driven systems. The 200 World EnergyAssessment specifcally mentions thepebble-bed modular reactor (PBMR) asa design concept that is being revisitedbecause o the potential or a high de-gree o inherent sa ety and the opportu-nity to operate on a proli eration-resis-

tant denatured uranium/thorium uelcycle. The PBMR is also considered aGEN III+ reactor. GEN III+ systemsprobably will be the type used in the nextexpansion o nuclear power (UNDP,UNDESA, and WEC, 200 ).None o the Generation IV advancedreactors have been built and none areclose to being under construction. GENIV is widely recognized as an R&D pro-gram or reactors with advanced ea-tures well beyond the GEN III+ LWR.GEN IV reactors are being prepared orthe uture, starting in 2035 to 20 0.Whereas previous reactor types pro-gressed in an evolutionary manner,GEN IV reactor designs attempt to sig-nifcantly shi t the nature o nuclear en-ergy, either by incorporating high-tem-perature, high-e fciency concepts, or byproposing solutions that signifcantlyincrease the sustainability o nuclear en-

ergy (reduced wastes; increased usageo natural resources).Six reactor types are being studied by agroup o ten countries: the very hightemperature reactor, which uses gascooling, can reach very high thermody-namic e fciency and might be able tosupport production o hydrogen; the su-percritical water reactor, which also al-lows or higher e fciency and reducesthe production o waste; three ast neu-tron reactors, cooled either by gas (gas

ast reactor), lead (lead ast reactor), orsodium (sodium ast reactor), whichmake use o closed uel cycles; and themolten salt reactor. The very high tem-perature and gas ast reactors can bothuse pebble-type uel.Future nuclear systems, such as thosethat are studied in the GEN IV programand the Advanced Fuel Cycle initiativeare all aimed at making nuclear energy

more sustainable, either by increasingsystem e fciency or by using closed uelcycles where nuclear waste is either par-tially or totally recycled. Another objec-tive or these systems is to reduce bothcapital and operational costs. Signif-cant scientifc and technical challengesmust be resolved be ore these systemsare ready or deployment: high temperature high uence materi-

als (i.e., materials not crippled by ul-tra-high neutron uxes);

uels that can contain high quantitieso minor Actinides need to be demon-strated;

novel technologies or transportingheat and generating electricity withsmaller ootprints than the currentsteam cycles;

separation technologies that o erhigh proli eration resistance and pro-duce minimal wastes;

more compact designs that reducecapital costs.

To achieve these ambitious objectives, athree-pronged research strategy is be-ing implemented in the United States:

( )The role o the basic sciences is beingenhanced. Current empirical researchtools need to be phased out and re-placed by modern techniques.(2) The role o simulation and modelingwill become central, when current gen-eration so tware largely developed inthe 980s is replaced by high per or-mance tools. One can expect that cer-tain key di fculties, or example the de-velopment o advanced uels, can besolved more e fciently once these toolsare in place(3) The design process itsel will be sim-plifed and streamlined.


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Invesitgations o possible commercial development o usion energyinclude inertial usion and various orms o magetic con nement o high-temperature plasma. Current research is ocused on magnetic con ne-ment in toroidal (doughnut-shaped) geometries and on laser-induced iner-tial con nement. Laboratory experiments in tokomaks machines thatproduce a toroidal magnetic eld or con ning a plasma have produced10 megawatts o heat rom usion or about one second. The ITER project(ITER means the way in Latin), a collaboration o China, Europe, India,Japan, Russia, South Korea and the United States, is planned to produce500 megawatts o usion heat or over 400 seconds. In parallel with ITER,research is planned to target higher power and continuous operation andto develop advanced materials and components that can withstand highneutron fuxes. Some ITER partners anticipate demonstration usionpower plants about 2035 and commercialization starting about 2050.

costWhile operating costs or many existing nuclear power plants are quitelow, the current up ront capital cost o constructing a new plant is higherthan the cost o conventional new ossil uel- red electricity-generatingtechnologies. 37 Cost reductions could help to improve nuclear energyscompetitiveness in terms o real, levelized cost in cents-per-kilowatt-hour,relative to other options (Table 3.3). 38 Projections o uture cost or nuclearpower are, o course, highly uncertain, especially in the case o advancedreactor designs that have yet to be built or operated anywhere in the world.In some countries, moreover, cost uncertainty is likely to be compoundedby the potential or delays and di culties in siting, permitting, andconstruction. For all o these reasons, private nancial markets in manyparts o the world will tend to assign a substantial risk premium to newnuclear investments or some time to come.

7 In net present value terms, as much as 60-75 percent of the life-cycle cost of nuclear powermay be front-loaded that is, upfront capital costs are much higher than long-term operatingcosts. Capital constraints may therefore present a significant hurdle for nuclear plant invest-ments, especially given the relatively risk-averse nature of private financial markets and muchof the electric power industry.

8 As would also be the case with many other energy technologies, it is highly misleading tosimply average the performance of old and new nuclear technologies. The proper way to eval-uate technology options in terms of their potential contribution to sustainable energy solu-tions going forward is to use characteristics typical of best-in-class performance, which mightbe the upper 0- 5 percent of performance levels. In recent years, modern nuclear powerplants have achieved capacity factors in excess of 90 percent, a significant improvement overthe 75-85 percent capacity factors that were at one time more typical of the industry. Thisimprovement in plant performance has a significant impact on the economics of nuclearpower.


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Obviously, a number o developments could change the relative costpicture or nuclear power. Further technology improvements, greaterpublic acceptance and regulatory certainty, and progress in addressing thewaste disposal issue would produce lower cost estimates and, perhapsmore importantly, alter current perceptions o investment risk. 39 Success-

ul development o simpli ed, standardized reactor designs that wouldexpedite licensing and construction, in particular, could greatly improvethe industrys prospects. Nuclear power would also be more competitive inthe presence o a binding carbon constraint and/or i ossil uel prices rise.Whether a carbon constraint would by itsel produce a signi cant shi ttoward nuclear power would, o course, depend on the magnitude o theprice signals and on the cost o other non- or low-carbon alternatives,including renewable energy sources, coal with carbon capture and seques-tration, and highly e cient natural gas technologies. Without the presenceo a carbon cap or tax on carbon and/or active government intervention inthe orm o risk-sharing and/or nancial subsidies, most experts concludethat the private sector is unlikely to make substantial near-term invest-ments in nuclear technology and other non-or low-carbon alternatives especially in the context o increasingly competitive and deregulatedenergy markets.

9 There is considerable difference of opinion even among informed observers as to which of these concerns about nuclear power (waste management, proliferation, risk of accidents, etc.)is most significant.

Table 3.3 Comparative power costs

Case Real levelized cost(US$ cents/kW eh)

Nuclear (light water reactor) Reduce construction cost by 25% Reduce construction time rom 5 to 4 years Further reduce operations and management 13 million per kW eh Reduce cost o capital to gas/coal

Pulverized coalCCGT (low gas prices, $3.77 per MCF)CCGT (moderate gas prices, $4.42 per MCF)CCGT (high gas prices, $6.72 per MCF)

6.75.55.35.14.2

4.23.84.15.6

Note: Gas costs re ect real, levelized acquisition costs per thousand cubic eet (MCF)over the economic li e o the project. CCGT re ers to combined cycle gas turbine; kWehre ers to kilowatt-electricity hour. Figures use 2002 US$.

Source: MIT, 2005.


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An IEA analysis o nuclear economics shows that various OECD govern-ments already subsidize the nuclear industry by providing uel-supplyservices, waste disposal, uel reprocessing, and R&D unding. Manygovernments also limit the liability o plant owners in the event o an acci-dent and help with remediation. A recent case in point is the U.S. EnergyPolicy Act o 2005, which contains substantial subsidies and tax incentives

or a new generation o nuclear power plants. Whether these incentiveswill prove su cient to spur a new round o nuclear power plant construc-tion in the United States is not yet known; in the meantime, immediateprospects or urther expansion o nuclear energy capacity are likely toremain concentrated in the rapidly growing economies o Asia, notably inChina and India.

plant safety and waste disposalAccidents at Three Mile Island in 1979 and Chernobyl in 1986, as well asaccidents at uel-cycle acilities in Japan, Russia, and the United Stateshave had a long-lasting e ect on public perceptions o nuclear power andillustrate some o the sa ety, environmental, and health risks inherent inthe use o this technology. While a completely risk- ree nuclear plantdesign, like virtually all human endeavors, is highly unlikely, the role o nuclear energy has to be assessed in a more complete risk-bene t analysisthat weighs all actors, including the environmental impacts o di erentenergy options, their energy security risks and bene ts, and the likelihoodo uture technology improvements.

A related challenge is training the skilled personnel needed to constructand sa ely operate nuclear acilities, including not only existing light waterreactors but also sa er GEN III reactors. The challenge o developingadequate skills and expertise is more signi cant in the case o GEN IVreactors, which are (a) very di erent rom GEN III reactors,40 (b) presentmore di cult sa ety and proli eration issues, and (c) require considerableexpertise to design, construct, and operate.

In recent years, o course, the threat o terrorism has added a new andpotentially more di cult dimension to long-standing concerns about the

40 GEN IV plants are fast neutron reactors that operate with an approximately Mev neutronenergy spectrum. As such, they are very different from GEN III reactors, which use thermalneutrons. In GEN IV reactors, the energy density is higher and cooling is much more criti-cal. The GEN III and IIIa plants can be constructed to be very safe. In current projections of the ratio of GEN III and GEN IV plants, the ratio needed to reach steady-state burn down of long lived nuclear waste is approximately four to one. While GEN III reactors can be deployedmore widely, GEN IV plants present more significant safety and proliferation issues.


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sa e and secure operation o nuclear acilities and the transport o nuclearmaterials. While the sa ety record o the light-water reactors that dominatethe worlds existing nuclear power base has generally been very good,Chernobyl remains a power ul symbol o how serious and long-lived theconsequences o a nuclear accident can be, however low the probability o such accidents might be (Porritt, 2006). In response to potential terroristthreats, many countries have implemented additional security measures atexisting nuclear power plants; going orward, innovative reactor designspossibly including acilities that can be built underground or have other-wise been rein orced and equipped with passive sa ety eatures to with-stand outside attacks and internal sabotage may help to alleviate publicconcerns about the particular vulnerabilities associated with nuclear acili-ties. One o the selling points o a new generation o pebble-bed reactors isthat they can be built underground.

Disposing o high-level radioactive spent uel or the millennia-scaleperiod o time that nuclear waste could present a risk to public sa ety andhuman health is another problem that has long plagued the industry andthat has yet to be ully resolved in any country with an active commercialnuclear energy program. While long-term disposal in stable geologicrepositories is technically easible, no country has yet completed andbegun operating such a repository. (At present, Finland is closest to imple-menting this solution). Without a consensus on long-term waste storage,various interim strategies have emerged. These include storing spent ueltemporarily at power plant sites, or example using the dry cask method;or, in some countries, reprocessing or recycling the spent uel to removethe ssion products and separate the uranium and plutonium or re-use inreactor uel. Reprocessing reduces the quantity o waste by more than anorder o magnitude and has the potential o reducing the storage time byseveral orders o magnitude; but even a ter reprocessing, hundreds o years o sa e storage are required. Reprocessing also raises signi cantproli eration concerns since it generates quantities o plutonium theessential ingredient in nuclear weapons that must be sa eguarded toprevent the t or diversion or weapons-related purposes.

In act, proli eration risks are a substantial concern or all current closeduel-cycle reactor designs, especially or the so-called breeder reactor,

which requires reprocessing o spent uel to separate and recycle weapons-usable plutonium. An interdisciplinary study o nuclear power by MIT(2003), which analyzed the waste management implications o both once-through and closed uel cycles, concluded that no convincing case can be


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made on the basis o waste management considerations alone that thebene ts o partitioning and transmutation will outweigh the attendantsa ety, environmental, and security risks and economic costs. Otherexperts disagree and are more optimistic that the security, sa ety, and envi-ronmental concerns associated with closed uel cycles are technicallyresolvable. They point out that ast neutron reactors would extenduranium supplies by 100- old and allow or the use o thorium, whilereducing the quantity o waste to be handled. Based on these advantages,they argue that concerted research e orts should be undertaken to seewhether such reactors can be part o this centurys energy solutions.

Given that uranium is relatively abundant and inexpensive at presentand given that the waste reduction bene ts o spent uel reprocessing donot appear to outweigh the downsides in terms o proli eration risks, once-through uel cycles are likely to remain the sa er option or at least the next

ew decades although research that may lead to technical solutions couldchange that. The latest reactor designs tend to require less uel per kilo-watt-hour generated; a higher burn-up rate in turn reduces the quantity o waste le t to be managed at the end o the uel cycle. This is true o newerpebble-bed designs, though it is also the case that the uel pellets used inthese designs require much higher uranium enrichment.

Meanwhile, seemingly irreducible political stresses continue to inhibitsolutions to the problem o nuclear waste disposal all over the world. Hal a century ago, the nuclear industry imposed on itsel a standard o wastemanagement that some experts believe has turned out to be unrealizable.The industry agreed that it would manage nuclear wastes in such a waythat there would be no discernible impact on later generations or a periodthat was o ten in the range o 10,000 years. With the understanding o geology gained since, this task might have become easier. In act it hasbecome harder. There seems to be little prospect that the original objectivecan be met within this generation, though perhaps it can be met one ortwo generations rom now.

With this realization, a consensus is beginning to emerge among expertsthat the objective o waste storage should shi t rom irretrievable storage toretrievable storage. In other words, wastes would be stored with the expec-tation that they will require urther handling in a ew decades. In theUnited States and elsewhere attention has recently ocused on dry-caskstorage technology that could keep nuclear wastes thermally secure ortime periods on the order o a hal -century. A shi t in nuclear waste-management objectives, while increasingly under discussion in expert


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circles, has not however been widely proposed to the general public andwould require changes in the legal ramework governing waste manage-ment in the United States. The latter could present a major near-termhurdle in the United States and elsewhere.

Other countries, meanwhile, have continued to ocus on spent- uelreprocessing and long-term geological storage as primary strategies orwaste management. In 2006, France, or example, adopted legislation that(a) ormally declares deep geological disposal as the re erence solution orhigh-level and long-lived radioactive wastes, (b) sets 2015 as the target date

or licensing a repository, and (c) sets 2025 as the target date or opening along-term repository. 41 Meanwhile, some experts have suggested that i countries could reach consensus on establishing international acilities toprovide spent- uel reprocessing and uranium enrichment services in ahighly secure and transparent environment, this option could be very help-

ul in addressing both proli eration and waste management concerns.Until this or other long-term solutions can be ound, however, the wasteissue is likely to continue to present a signi cant and perhaps intractableobstacle to the signi cant expansion o commercial nuclear power capacityworldwide.

Nuclear proli eration and public acceptanceThe development and use o nuclear technology or commercial energyproduction has long generated concern that associated materials or exper-tise could be diverted to non-peace ul purposes. To date, no operating civil-ian nuclear program has been directly linked to the development o nuclearweapons, but the risk exists that commercial nuclear energy programscould be used to as cover or illicit weapons-related activity or as a source(voluntarily or involuntarily) or the highly enriched uranium or plutoniumneeded to construct nuclear weapons. Both in India and North Korea, reac-tors nominally intended or civilian research were used to produce pluto-nium or weapons. Proli eration concerns apply most strongly to theuranium enrichment and spent- uel reprocessing elements o a civiliannuclear energy program. As the American Physical Society has pointedout, nuclear reactors themselves are not the primary proli eration risk; theprincipal concern is that countries with the intent to proli erate can

4 According to the World Nuclear Association (WNA, 007), French law also affirms the princi-ple of reprocessing used fuel and using recycled plutonium in mixed oxide (MOX) fuel 89 inorder to reduce the quantity and toxicity of final wastes, and calls for construction of aprototype fourth-generation reactor by 0 0 to test transmutation of long-lived actinides.


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covertly use the associated enrichment or reprocessing plants to producethe essential material or a nuclear explosive (APS, 2005: i).

The existing international regime or managing proli eration risks iswidely viewed as inadequate and would be urther stretched by a signi -cant expansion o nuclear power to many more countries with widely vary-ing security circumstances. Here again, it matters which technology isbeing deployed: the risks presented by GEN III reactors are very di erentand likely to be more manageable rom those that would be presented bythe international deployment o ast neutron systems. Given the devastat-ing impact even a single nuclear weapon linked to a civilian nuclear energyprogram could have, current international sa eguards will clearly need tobe strengthened. E orts to develop proli eration-resistant technologies,especially or uel enrichment and reprocessing, also merit high priority.Increased international collaboration is needed to explore options oraddressing enrichment and reprocessing needs in ways that minimizepublic sa ety and proli eration risks. In particular, it has been suggestedthat stronger multi-lateral arrangements including acilities that wouldenrich and reprocess uel or use by multiple countries under multina-tional supervision, perhaps in combination with international supply guar-antees could help to address proli eration concerns.

In some countries, public acceptance is likely to continue to present asigni cant challenge or nuclear power, though locating uture capacityadditions at existing plants may help to alleviate siting di culties to asigni cant degree. Public perceptions are likely to change over time, o course, and may become signi cantly more accepting o nuclear energy asconcern over climate change grows and as countries and communitiesbecome amiliar with nuclear energy systems. However, even i the climateo opinion around nuclear energy already shows signs o shi ting, itremains the case that the public is likely to be extremely un orgiving o anyaccident or attack involving civilian nuclear energy systems. A single inci-dent anywhere would cast a pall over nuclear power everywhere. Asubstantial increase in both the number o plants operating worldwide andthe amount o uel being transported and handled or enrichment, repro-cessing, or waste disposal inevitably heightens the risk that something,someday, will go wrong, even i the probability o any single event isextremely low. As a result, some experts have estimated that a urtherorder-o -magnitude increase in reactor sa ety, along with substantial inter-national progress to address current proli eration concerns, will be


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required to maintain public acceptance in the ace o a greatly expandedworldwide nuclear energy program. In the meantime, it seems clear thatthe undamental challenges or nuclear power are as much and perhapsmore political and social as they are technological or scienti c.

In summary: Nuclear power Based on the oregoing discussion, no certain conclusion regarding the

uture role o nuclear energy emerges, except that a global renaissance o commercial nuclear power is unlikely to materialize over the next ewdecades without substantial support rom governments; e ective e orts topromote international collaboration (especially to address sa ety, waste,and proli eration concerns); changes in public perception; and the imposi-tion o greenhouse gas constraints that would make low- or non-carbonenergy technologies more cost-competitive with their currently cheaper

ossil- uel counterparts.42 In the case o nuclear power it is air to say thatunderstanding o the technology and o the potential developments thatcould mitigate some o the concerns reviewed above both among thepublic and among policymakers is dated. A transparent and scienti callydriven re-examination o the issues surrounding nuclear powe

lighting the way part2

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