Project aims to assure coal's still king in a warming world

BEIJING -- Coal is firing China's climb to superpower status.

The world's most populous nation built an average of two coal-burning power plants a week last year. Hundreds more coal power plants are slated to come online during the next few years, even as China expands its renewable energy portfolio.

Combustion of fossil fuels on such a scale poses potentially dire global consequences, scientists say, so a coalition of Chinese and U.S. energy companies is trying to develop a technological fix.

GreenGen Co., a subsidiary of the state-owned China Huaneng Group, is building a 250 megawatt integrated gasification combined cycle (IGCC) power plant near the port city of Tianjin that would produce electricity more efficiently than a conventional coal burner. The Beijing-based company plans to more than double the IGCC plant's capacity and capture and sequester about 80 percent of its emissions of heat-trapping carbon dioxide.

"The basic reality for China is that most of our energy comes from coal, and we're working very hard to improve our generation efficiency," said Song Zheng, GreenGen's deputy general manager. "This project will be helpful in achieving our long-term development goals."

China hasn't set a long-term, binding cap on its emissions of CO2 and other greenhouse gases. But the nation's 11th five-year plan calls for cutting energy consumption 20 percent per unit of gross domestic product by 2010 while reducing sulfur dioxide and other air pollutants by 10 percent.

The greener GDP goal comes as China -- the world's No. 2 energy producer and consumer, behind the United States -- struggles to slow its rapid growth.

China's GDP grew more than 10 percent annually between 2001 and 2006. During that span, the nation's coal consumption shot up 72 percent to 2.46 billion tons, according to a Harvard University study published last year in the journal Energy Policy.

Coal provides almost 80 percent of China's electricity today, but none of the nation's power plants captures and sequesters its CO2 emissions, noted Joanna Lewis, a senior fellow with the Pew Center on Global Climate Change in Washington.

Carbon capture, sequestration

Carbon capture and sequestration (CCS) technology is nascent and carries a significant "energy penalty," Lewis explained. That is, a power plant with CCS technology would need to burn more coal to produce the same amount of energy as one without it.

"In a country like China where energy demand is still growing rapidly, installing a technology that reduces electricity output from its power plants is not particularly popular," Lewis added.

GreenGen's financial backers, however, say it could be a catalyst for cleaner and more efficient coal power generation around the globe.

GreenGen officials plan to complete the initial 250 MW phase of the project by the end of 2009 on land reclaimed from the Yellow Sea. Over the ensuing three years, they would add 400 MW of generation capacity and CCS infrastructure.

The plant would be capable of capturing between 1 million and 1.5 million tons of CO2 annually, Song said.

"Pollutants and CO2 emissions will be near zero," he added.

Song and his colleagues are working on two subterranean options for greenhouse gases: storing them in saline formations or injecting them into an oil field to enhance recovery.


U.S. project seen as key

A similar project, called FutureGen, hangs in the balance in the United States.

A coalition of 12 energy companies, called the FutureGen Alliance, selected an Illinois site for a 275 MW gasified coal power plant last December. But the Bush administration withdrew its support for the $1.8 billion project a month later, citing rising capital costs. The Energy Department would be responsible for more than two-thirds of the project's budget.

DOE is now exploring how to spread its cash to several projects that would demonstrate CCS technology, even as FutureGen supporters in Congress and the private sector hold out hope for the Illinois generator.

Peabody Energy Corp., the world's largest private-sector coal company and an equity player in both GreenGen and FutureGen, maintains that large-scale demonstration projects are essential to dealing with climate and energy-security challenges.

"We know that society wants to manage carbon, and coal use will increase over the next few decades," said Vic Svec, Peabody's senior vice president for investor relations. "International partnerships like this are really important."

GreenGen's Song said it will cost about $288 million to build the initial 250 MW generator. But Peabody's Svec estimated that the project's total capital cost could surpass $1 billion, as steel, concrete and other construction materials increase in price.

GreenGen has backing from China's Ministry of Science and Technology, as well as several state-held coal producers. But Song and his colleagues underscore that international support for the project is also crucial.

"We urgently need cooperation with the United States on the technology," said Yu Liu, a GreenGen senior engineer.

If FutureGen doesn't come first, it is unlikely GreenGen will, predicted Pew's Lewis, who is writing a paper with Harvard researchers on China's use of advanced coal technologies.

"It is the place where we need to see [CCS] deployed at scale," Lewis said. "But China is wary of investing in a technology that is not yet being used commercially in the developed world."

All sides agree that broad replication of the technology is crucial over the long term, especially in China.

GreenGen officials say they hope to prove the commercial viability of their Tianjin project between 2013 and 2015. If the technologies work as planned, GreenGen officials intend to build several more power plants.

Jim Connaughton, who heads the White House Council on Environmental Quality, said it is important to push beyond individual FutureGen or GreenGen projects.

"The more each of us does," Connaughton said, "the faster we can all prove the concept."

Renewable energy's role

Energy and environmental experts stress that CCS is not the only answer to shrinking China's carbon footprint.

Ruiying Zhang, a senior analyst with the Energy Foundation's China Sustainable Energy Program in Beijing, contends that investments in energy efficiency and renewable energy technologies would produce a quicker payoff.

"If the cost of GreenGen is so much, I'm not sure it's appropriate to build and replicate it," Zhang said. "There are many other things that China needs to spend the money on."

She pointed to wind turbines, solar photovoltaic panels and other low- or no-carbon renewable energy projects.

China gets about 8.5 percent of its power from hydroelectric dams, wind turbines and other renewable sources today. The central government has vowed to ramp up its renewable electricity portfolio to 15 percent by 2020 and 25 percent by 2025.

Hitting the 25 percent target would require an annual investment of more than $12 billion in research and development, said Li Junfeng, secretary general of Chinese Renewable Energy Industries Association, which is sanctioned by but independent of the government. Hitting the target would also offset about 1 billion tons of CO2 emissions annually, he said.

Central government planners say China appears to be on pace to surpass the marks.

Last year, China increased its hydropower generation to 145 gigawatts and added 3.4 GW of wind turbines, according to China's National Development Reform Commission. The country's installed capacity of solar power is growing by about 120 million square meters a year.

China is the king of coal today, but it will be the world's top producer of renewable energy within a decade, Zhang predicted.

"China is developing so fast, there is a great need for the power," Zhang added. "There is a strong government initiative for this."

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