Power generators place uncertain bets on CO2

For most of the 1990s, natural gas was the fuel of choice for power generation. Gas-fired plants were relatively easy to build quickly, safely and cleanly, using proven technologies. But the popularity of natural gas brought a surge in demand for the fuel that has tightened U.S. supplies and driven up the price.

“(Natural gas) was the cleanest, cheapest, easiest to build,” said Michael Morris, chairman and CEO of American Electric Power, one of the largest power generators in the U.S. “And we took a 22-trillion-foot demand back to the wellheads and they said, ‘Jeez, all we can do is 18.’ So the price went from 2 bucks to 12 bucks. That took that whole game off the horizon.”

That’s one reason many U.S. utilities and power generators are now giving a second look to building new nuclear power plants, which emit no carbon dioxide. Though about 20 percent of U.S. electricity is produced by nuclear, construction of new nuclear power stations ground to a halt in the U.S. in the 1980s after construction cost overruns, public concerns about safety and problems financing new projects on Wall Street.

Now, thanks to tax credits and loan guarantees provided in the Energy Policy Act of 2005, a handful of power companies are pressing ahead with plans to build new nuclear plants — which they hope to bring online as early as 2014.

The hope is that by successfully licensing and building a handful of new nuclear plants, on time and on budget, these companies can demonstrate to that a new generation of nuclear plants and can be operated safely and economically, spurring additional construction.

But the industry faces several substantial hurdles in jump-starting nuclear — among them the thorny problem of storing the radioactive waste produced by spent nuclear fuel. A government plan to provide a central repository for spent fuel has been bogged down for over a decade.

Nuclear power also faces continued public opposition over safety concerns, including the fear that expanded reliance on nuclear fuel brings with it increased risk of the proliferation of nuclear weapons. Though some environmental groups have said nuclear should be considered, many continue to oppose it until these issues are resolved.

“People are open to thinking and looking and talking about it," said Anderson. “I just don’t think its one of the first options you turn to. There’s a lot of cheaper ... and more proven things you we can do.”

Cleaning up coal
That leaves coal — the source of over half the electricity generated in the United States. Despite tight supplies of natural gas and declining production of crude oil, the U.S. has estimated reserves of about 275 billion tons coal — about a 250-year supply at current demand, according to the American Coal Foundation.

But coal is also the dirtiest fuel — throwing off between 205 and 227 pounds of CO2 per million Btus of energy produced — depending on the type of coal. Of all fossil fuels, natural gas burns the cleanest — just 117 pounds per million Btus.

Still, technology is helping produce cleaner-burning coal plants, and new designs that are on the drawing boards could further reduce greenhouse gases. So-called “integrated gasification combined cycle” plants turn coal into gas and convert more of the heat from burning coal into power. Power companies are also looking at something called “ultra supercritical” combustion processes that get more energy out of each lump of coal by increasing the burning temperature and pressure.

But these new technologies — and the cost of retrofitting old plants to capture CO2 that is already being produced — cost money. Before utilities and power generators can decide which solution to pursue, they need to know which ones will give them the best return.

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