"Clean" Coal Seen in 5-10 Years, but Costs High

NORWAY: December 8, 2006 Planet Ark


OSLO - "Clean" coal-fired power plants that bury
greenhouse gases will be up and running in 5-10 years
but will be money-losers unless governments impose
tougher policies for fighting global warming, experts
said on Thursday.


A breakthrough to enable power generators to capture
and entomb carbon dioxide, the main greenhouse gas
widely blamed for heating the planet, would be a giant
technological leap towards "clean coal" worth tens of
billions of dollars.

"Carbon capture could be demonstrated technically
viable within 5-10 years but there's still no
commercial incentives," said Harry Audus, general
manager of the International Energy Agency (IEA)
greenhouse gas research and development programme.

"So it's up to the politicians to get the commercial
incentives in place," he told Reuters. The IEA advises
governments in developed nations on energy policy.

A 2005 UN report said that filtering out greenhouse
gases and piping them into deep underground stores
could meet 15-55 percent of the world's likely need to
curb greenhouse gases by 2100 -- making storage
perhaps the single biggest contributor.

Among projects, the United States plans a "clean coal"
plant by 2012 that would bury heat-trapping carbon
dioxide. Other "carbon coffin" pilot projects are
under way in the European Union and nations including
Norway, Australia and China.

"Predicting a year (for commercial coal generation
projects) is extremely difficult," said Bert Metz, a
Dutch co-chair of the UN report into carbon capture
and storage.


CARBON TOO CHEAP

He said carbon storage would only be attractive for
power generators if carbon prices were stable at
around US$25-US$30 a tonne. In the EU industrial
emissions market, carbon traded on Thursday at about
18.2 euros (US$24.19) a tonne for 2008 delivery.

But carbon barely trades at all after 2012, when many
emissions targets expire, leaving a price vacuum.

"It's anybody's guess when the price is going to be at
US$25 because it all depends on agreement on climate
policy," he said. Power generators planning to build
new plants want to know what levels of emissions they
will be allowed.

Thirty five industrial nations in the UN's Kyoto
Protocol for curbing emissions are seeking ways to
extend the pact beyond 2012. Many scientists say the
warming is likely to spread deserts, cause floods and
raise sea levels.

The United States is not part of Kyoto, reckoning it
would cost jobs and wrongly omits developing nations.

And scores of companies, including American Electric
Power, BP, E.ON, Statoil and Vattenfall, are in a race
to develop technologies.

"The fundamental problem is that carbon capture and
storage now costs around US$100 a tonne," said David
Garman, US Under Secretary of Energy. "We have to cut
that cost to US$10 a tonne or thereabouts in order for
it to be widely adopted and available."


PROJECTS

The United States is choosing between sites in
Illinois and Texas for its US$1 billion FutureGen
project for what President George W. Bush calls the
"world's first coal-based, zero-emissions electricity
and hydrogen power plant."

And the European Union is planning to build a
near-zero emissions coal-fired plant in China by 2020,
along with other research schemes for burying carbon
within the EU.

"Our expectation is that there'll be carbon capture
and storage plants operating commercially, possibly as
early as 2010 in both (the) UK and Norway," said
Barbara Helfferich, spokeswoman for the European
Commission.

Non-EU Norway, the world's number three oil exporter,
aims to build a gas-fired power plant with full carbon
dioxide capture from 2014. Under a first phase, from
2010, the Mongstad plant will capture 100,000 tonnes
of carbon a year.

Britain's Finance Minister Gordon Brown said on
Wednesday that Britain will decide next year whether
to back a demonstration plant to bury greenhouse
gases.

Audus at the IEA said carbon capture seemed at a
similar stage to the 1960s and '70s when governments
decided to axe emissions of sulphur dioxide from coal
plants. Generators objected, but costs tumbled as new
technologies emerged.

Norway imposed taxes that led to a first commercial
carbon dioxide store in 1996 at Statoil's Sleipner gas
field. For 2006, CO2 taxes vary from 255-300
(US$41.84-US$49.22) per tonne.

Among other existing projects, Canada's EnCana is
injecting carbon dioxide from a US lignite
gasification plant to help boost oil production at its
Weyburn project.

And BP and Algerian company Sonatrach are injecting
carbon dioxide from the In Salah natural gas field in
Algeria because the gas has too high a percentage of
CO2.


Story by Alister Doyle, Environment Correspondent


REUTERS NEWS SERVICE