Saturday, September 21, 2013

The one weird trick missing from coverage of carbon emission rules for new power plants

Don't know how often I'll get away with a semi-bogus title like the one above, but I'll use it while I can.

Anyway, draft rules from last year for new plants have been revised without too much weakening. New gas plants with newest technology won't have trouble meeting limits, while the best coal plants, barring some breakthrough, will likely have to sequester about 40% of their emissions.

So the one weird trick that people forget is this is not a free market, it's a regulated utility market, so reactions between price and market have intermediaries. While the assumption is likely correct that virtually no coal plants would've been built anyway, to the extent that assumption changes for political reasons, this proposal means that carbon capture and sequestration (CCS) will be required. The issue of passing on sequestration costs in a regulated utility arose previously:

[One utility decided on a] recent deferral of a large-scale CCS retrofit demonstration project on one of its coal-fired power plants because the State’s utility regulators would not approve CCS without a regulatory requirement to reduce CO2.

This rule makes CCS slightly more possible, and there are four plants currently being constructed with CCS with special financial help, but this rule could assist these or similar plants.

With that weird trick out of the way, some other thoughts

- to litigate, the fossil fuel industry has to show it has standing to sue, and that could be an issue. Standing requires injury. If no coal plants were going to be built anyway, where's the injury? Once again, a conservative legal technique designed to cripple the law might have potential blowback against the conservatives.

- when the litigation happens, I have no idea of the maximum time it will take to finish, but it's pretty safe to say at least a year to happen, likely much longer than that. I believe these cases go direct to appellate courts, but from there they can request whether the Supreme Court would consider a further appeal.

- in a bit of irony for coal, their fight against cap-and-trade is coming back to bite them as far as new plants are concerned. New coal will have to reduce carbon by about 40%. I expect that if they have to sequester 40%, then sequestering 80% wouldn't have been hard, and if cap and trade had been in place, they could've sold the extra amount to existing plants.


UPDATE:  ironic timing - Norway is closing down its massive CCS project amid criticism and cost overruns. This keeps happening to CCS systems. Solar power has a mix of good news and bad news, but CCS seems to only have bad news. This will have to change if it's going to play an important role in the future.

16 comments:

William Connolley said...

CCS won't happen (except, as you note, where its propped up) because it isn't economic.

It can be argued (see Timmy) that effectively banning new coal plants is good news for the existing coal plants. Which are the inefficient ones.

Anonymous said...

@WC
I don't see why it really matters in this case. Upgrading the efficiency of the coal fleet is like buffing out the scratches on a wrecked car. Regs for existing plants should be coming soon anyways. Would a carbon tax work better? Yes -You are invited to come sell that to the current House of Representatives.

Do the proposed regs care exactly how you sequester the carbon? Is enhanced oil recovery allowed?

-HAUS.MAUS

Anonymous said...

RE: CCS "uneconomic"

Yes, but with a very big asterisk; CCS is uneconomic at low carbon prices. Even the strongest proponents acknowledge that CCS can't compete at today's low or nonexistent carbon prices. There are many cheaper or even negative cost options available.

(I can dig up some estimates if anyone asks me to.)

But once we start talking about 80% emissions reductions, we're getting into territory where CCS looks good. We can't get 80% reductions with penny per gallon level C taxes. Whole building retrofits and utility scale solar aren't cheap either.

Many "uneconomic" strategies are being pursued already, because they have co-benefits and/or PR value. Just about the only co-benefit available to CCS is enhanced oil recovery. Environmentalists aren't exactly lining up in favor. Many prominent environmentalists are dismissive or hostile towards CCS, but don't really understand the technology or its maturity. The same people who dismiss CCS on a cost basis enthusiastically endorse Concentrating solar plants or off-shore wind that are terribly uncompetitive.

Also, historically, many "uneconomic" technologies and industries survive because the government wants them to (or is otherwise coerced -look at South Africa's coal to liquids industry). We could see a future where CCS happens not because it's a good idea, but because the government is compelled to protect jobs in rural areas. What benefit does the government derive from subsidizing corn monoculture? Yet it happens.

-HAUS.MAUS

David B. Benson said...

I agree that CCS is hopelessly too expensive.

James Wimberley said...

¨Solar power has a mix of good news and bad news.¨ Where´s the bad news? Policy blowbacks in many places as solar starts to pose a real threat to fossil incumbents, and the temporary glut leading to bankruptcies of higher-cost producers. These are merely Schumpeterian growing pains - the strongest Chinese companies are back to profitable growth. I would put the mix at 90% good.

Brian said...

Agreed that CCS hasn't performed well, but:

1. Maybe the breakthrough is just around the corner. For example, electric vehicles now have a shot against internal combustion that wasn't obvious 20 years ago. Assuming that will happen is a mistake, but it could be worth funding R&D just in case.

2. I'm willing to do irrational things to get a political deal. Economic support for CCS and possibly nuclear (if needed) could be part of a deal. Devil in the details though.

Mal Adapted said...

HAUS.MAUS: "Even the strongest proponents acknowledge that CCS can't compete at today's low or nonexistent carbon prices."

How does CCS compete even at high carbon prices? Are emissions to be measured for carbon content at every smokestack and tailpipe? Methinks the cost of enforcement would make that uneconomic as well, compared to taxing fossil fuels at the mine/wellhead/port of entry.

Anonymous said...

@Mal

You measure CO2 at the point where you shove it underground.

In a C tax system like you describe CCS does require an additional implementation step to get the required refund or credit or whatever.

Just like you tax the fuel at the point of extraction, you issue credit at the point of sequestration.

The specifics are up to the lawyer/politician types.

-HAUS.MAUS

Mal Adapted said...

HAUS.MAUS: "You measure CO2 at the point where you shove it underground."

Yeah, that occurred to me as I was climbing out of the shower this morning. A scheme like that would be more economic than monitoring exhaust, and more politically attractive if added to a tax-at-source proposal. Maybe I'll write my congresscritter 8^).

Brian said...

Measuring where you sequester carbon would have to be additional to measuring where you produce it (unless you don't measure, you just estimate based on fuel consumption). I doubt measurement's a big issue, if you can ignore leakage (which doesn't seem much of a problem at less than very long time scales).

Still if solar and wind beat CCS now and are getting better faster, it's hard to see where CCS gets an advantage even if you had to do 80% cuts. Unless technology changes or political incentives kick in.

Anonymous said...

Can probably get 80% cuts in electricity production emissions without CCS (esp. if you're okay with nuclear) but utility emissions are less than half the problem. Transport electrification will push a lot of emissions into that column, but there will always be sources that can't be electrified. CCS becomes particularly useful as we take care of the easy stuff and start going after the "long tail" of the large number of smaller emitters (need air capture for a lot of this).

Fossil fuel + CCS might be cheaper than using transmission and storage to cover solar/wind variability. We haven't hit the limits of renewable integration yet, so no urgent need for CCS yet.

As solar/wind start to scale up to the capacity we need, we'll start to see new challenges like material shortages and lack of suitable sites.

-HAUS.MAUS

Thomas Lee Elifritz said...

Enthalpy of formation and conservation of energy are concepts that are extremely unforgiving of fools. There is just no way that pumping this crap under the ground or capturing it will work out.

I suggest you stop the offending behavior. You don't even have to stop having sex, just use latex. And start thinking about getting your pathetic asses off the planet and out of the biosphere. Humans and natural biospheres are incompatible, and the sooner you realize that the sooner you can bet about the task of extracting carbon from carbon dioxide and building reusable launchers and space habitats out of that carbon.

Anonymous said...

@Thomas Lee

You are confused.

-HAUS.MAUS

Thomas Lee Elifritz said...

Thank you for such an enlightening discussion of all the issues involved with this global problem.

I will file your suggestion away immediately in its proper place. And when you have an actual point to make, I will give it the proper consideration that it deserves.

Anonymous said...

@Thomas L

Start here:
http://www.iea.org/techno/essentials1.pdf

-HAUS.MAUS

Thomas Lee Elifritz said...

No thanks, I'm not into cave man physics. My take on reality is considerably more sophisticated.

You realize I am a condensed matter physicist, no? I didn't think so.