CO2 Capture Could Raise Wholesale Energy Price 80 Percent

Photographer: Luke Sharrett/Bloomberg

An electrical transformer stands behind the Tennessee Valley Authority Paradise Fossil Plant in Kentucky. Close

An electrical transformer stands behind the Tennessee Valley Authority Paradise Fossil Plant in Kentucky.

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Photographer: Luke Sharrett/Bloomberg

An electrical transformer stands behind the Tennessee Valley Authority Paradise Fossil Plant in Kentucky.

Bloomberg BNA – Requiring the use of carbon capture and sequestration technologies at coal-fired power plants could increase the wholesale price of electricity between 70 percent and 80 percent, an Energy Department official said.

Julio Friedmann, deputy assistant secretary for clean coal at the Energy Department, told the House Energy and Commerce Oversight and Investigations Subcommittee the first generation of CCS technologies have a captured cost of carbon dioxide of between $70-90 per ton for wholesale electricity production but said a second generation of technologies could drop that cost to $40-50 per ton.

“It is in fact a substantial percentage increase in the cost of electricity, but in part, that's because the current price of coal is so low,” Friedmann said.

Friedmann said the overall impact on electric prices would depend on the size and type of power plant installing the technology.

The Environmental Protection Agency is attempting to regulate carbon dioxide emissions for new power plants with standards that will require the use of CCS technologies. Many lawmakers and utility groups say the technology isn't commercially feasible and would make it impossible to build a new coal power plant in the U.S.

Between fiscal years 2005 and 2014, the Energy Department has received around $7.6 billion in funding for development of CCS technologies in hopes of commercialization. Eight major demonstration projects are under Energy Department programs, most of which use the captured carbon dioxide for enhanced oil recovery.

Friedmann said it was “unquestionable” that coal would remain an essential element of a “vibrant” American energy portfolio but said it would be difficult to reduce greenhouse gas emissions and address climate change without the use of CCS technologies.

“It's a technology that we simply need to have,” Friedmann said.

Three Aspects' Demonstration

Friedmann said each of three aspects of carbon capture and sequestration— carbon capture, carbon compression and transportation and carbon injection and storage— have been shown and demonstrated individually and said industrial applications of CCS are in use throughout the country.

Demonstration projects highlighting the second generation of CCS technologies will likely emerge within the next couple of years, Friedmann said.

“We see our role chiefly as enabling the reduction of costs as they enter the market,” Friedmann said. “Our job is not commercialization or the determination of economic viability."

Friedmann agreed in response to questioning from full committee ranking member Rep. Henry Waxman (D-Calif.) that utilities likely wouldn't invest in carbon capture and sequestration technologies without a mandate to do so under the Clean Air Act.

Subcommittee Chairman Rep. Tim Murphy (R-Pa.) said it was not merely technological challenges standing in the way of broader acceptance of CCS deployment.

"Demonstrating full scale CCS is alone not sufficient to make it the standard for the nation's coal based electricity generation,” Murphy said. “If coal power plants cost too much, nobody will build them. Energy costs will increase making it even more difficult for families and US manufacturers to compete.”

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