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."
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