; PEW Greenwald slides Feb 08
Documents
Resources
Learning Center
Upload
Plans & pricing Sign in
Sign Out
Your Federal Quarterly Tax Payments are due April 15th Get Help Now >>

PEW Greenwald slides Feb 08

VIEWS: 8 PAGES: 19

  • pg 1
									+
    Accelerating Deployment of CCS
+
     Pew Center On Global Climate Change
               Coal Initiative
+


+
    Judi Greenwald, Director of Innovative
                 Solutions
+
                  NARUC
+             February 19, 2008

+
+   The Pew Center’s Coal Initiative
+   Addressing emissions from coal-fueled
       power plants
+
    I. U.S. Policy Options
      a) Standards
+
      b) Trust fund
    II. U.S. Technology Solutions
+
    III. State-level Opportunities
+   IV. Options for China and India

+
+   Overview
    I.          The need for CCS
+
    II.         Options to accelerate use of CCS
    III.        A program that covers incremental costs
+          A.     Program components
           B.     Alternative scales and objectives
           C.     First order cost estimates
+
    IV.         A trust fund to manage the program
           A.     U.S. trust funds
+          B.     Lessons learned
           C.     Design Features
    V. Considerations for PUCs
+
    VI. Introduction of States Coal Paper

+
+   The Need for CCS
    1. 30% of U.S. and 80% of U.S. electricity
+
       sector CO2 emissions come from coal
+   2. These emissions must be significantly
       reduced to address climate change
+   3. CCS is the only suite of technologies
       that currently has promise to enable
+      coal to be a major electricity-sector
       energy source while meeting climate
+      objectives.

+
+   Current Barriers to CCS Deployment
    • High expected costs (~30-70% increase
+
      in plant-level cost of electricity)
    • Large losses in net electricity output
+
    • Lack of experience with technologies,
+     particularly at-scale, integrated use in the
      utility sector
+   • Regulatory uncertainty regarding stored
      CO2, including liability
+   • Current lack of regulatory drivers to
      reduce CO2 emissions
+
+   How CCS Might be Accelerated
+   Stringent enough cap on CO2
    Mandate on generators or retailers
+
     (standards)
+
    Tax credits
    State & regional policies; PUC actions
+   Program that pays incremental costs
     of CCS
+   Combined options
+
+   Program Goals: Address Barriers
+   • Establish real-world costs and viability:
      – Alternative electric generation technologies
+       (PC, IGCC, new & retrofit)
      – Different coal types
+     – Different geologic settings
    • Reduce costs & energy penalties in most
+     efficient manner
    • Provide information for design of
+     regulatory systems, including liability
      mechanisms
+
+   Program Description
    • Covers incremental costs of CCS
+
      (installation; O & M for 5 years; reimburse revenue lost
      due to reduced generation)
+   • Sufficient funds for:
      ~10 plants (500 MW) + 5 other large-point
+      sources
      ~30 plants (500 MW) + 10 other sources
+
    • Funds come from:
      – Fees on electricity generated
+
      – Proceeds from allowances
      – Other
+
+   Selected Pros and Cons of Options
+
    • Size:
      a) Smaller is less expensive;
+     b) Larger can significantly reduce costs
         through carefully staged capacity-doubling
+   • Source of funds
      a) Per KWh coal-fueled generation – could
+        increase role of coal community
      b) Other electricity generators – lower fees
+     c) Allowance allocations/auction revenues –
         tied to climate policy; magnitude and
         timing of funds less certain; no fee
+
+   How Much Would it Cost?
+   • Project costs will vary by: technology,
      coal type, location, EOR opportunity, and
+     whether retrofit or new build
    • Average per 500 MW unit
+
      – High: $950 million
      – Low: $730 million
+
    • Total Program
      – Smaller program: $8-10 billion
+
      – Larger program: $24 - $30 billion
+
+   Scale of Fees if per kWh on Coal
+   Based on current generation from coal:
    • Smaller program: $0.0004 to $0.0005 per
+     kWh
    • Larger program: $0.0011 to $0.0014 per kWh
+   Costs (and fees) decline as:
    • As coal-fueled generation increase
+   • Costs of CCS decline
    Costs (and fees) could be reduced by:
+   • Requiring cost-sharing
    • Supporting fewer projects per year
+
+   Trust Fund Basics
+   A mechanism that ensures that funds are
      disbursed only for the purposes
+     established for the fund
    In the case of federally established trust
+     funds, legislation determines:
    • whether funds go into Treasury and
+     through annual appropriations
    • the entity that manages the fund
+


+
+   Some Successful U.S. Trust Funds
+   • Highway Trust fund – installed new
      infrastructure across U.S.
+
    • Propane Education and Research Council
      – fees enabled by federal legislation; up
+     and running in 2 years
    • Ultra-Deepwater and Unconventional
+
      Natural Gas and Other Petroleum
      Resources – managed by private
+
      stakeholder group under DOE oversight.
+
+   U.S. Experience: Key Lessons
+   • Can raise, and provide assurance on uses
      of, very large sums of money
+
    • Establish clear objectives; terminate
      program when objectives reached
+
    • Ensure reliability of fund disbursement
      (avoid appropriations & tax-credits)
+
    • Use independent or quasi-independent
+
      entity to manage funds
    • Self-financed programs survive
+
+   Well-designed Trust Fund Advantages
    • Very rapid start-up possible
+
    • Operates outside of federal appropriations
+   • Uses private-sector project selection and
      management standards
+   • Transparency: stakeholder + experts
      control with federal oversight
+   • Efficient selection of projects to achieve
      goals
+
    • Could be applied to allowance option
+
+   Considerations for PUCs
+   Urgency of deploying CCS
+   Need to gain experience
    Need to reduce costs in time to
+
     avoid a move away from coal
+   Climate legislation is on the way

+


+
+   State-level options for CCS acceleration
+   •   Cap and trade
    •   Generator performance standards
+
    •   Retailer standards
+   •   Feebates
    •   Combined approaches
+   •   PUC treatment of climate change risk
        and CCS cost
+


+
+   The Potential Role for States
+   • Need a national program, but…
    • States have interests in mitigating climate change, and
      in the future of coal
+   • States will face decisions about specific CCS projects
    • States have relevant authorities they can exercise
+   • Favorable state policies combined with federal policies
      would advance CCS more effectively than either alone
    • A proactive approach by states to drive CCS can reduce
+     costs, speed technological and regulatory
      developments and public acceptance, and inform and
      pave the way for future national policy.
+


+
+        For Further Information
+                         See papers at
   www.pewclimate.org/white_papers/coal_initiative
+ 1. A Program to Accelerate the Deployment of CO Capture
                                                 2
          and Storage: Rationale, Objectives, and Costs. 2007.
+         Vello Kuuskraa
    2.    A Trust Fund Approach to Financing a CCS Deployment
          Program. 2008. Naomi Pena and Edward Rubin.
+
    3.    State Options for Low-Carbon Coal Policy Rich Cowart
+         and Shanna Vale, Regulatory Assistance Project; Joshua
          Bushinsky and Pat Hogan, Pew Center on Global Climate
          Change
+

								
To top