EnergyBiz - January/February 2008 - (Page 8) » FInanCIaL FRont building Debate A Rising Domestic thReAt to eneRgy secuRity By JAnet gellici W e he a r a loT The se days a bouT u.s. (GUEST OPINION) reliance on foreign energy sources and the threat of this dependence on U.S. energy security. Although the threat is real and cannot be understated, perhaps an equally menacing threat resides within our own borders. Recent initiatives to oppose and curtail the development of new coal power plants pose an imminent threat to the reliability of our electricity supply, to the availability of inexpensive generation to fuel our nation’s economic growth, and to the development of new technologies that will enhance our environment. Electric capacity margins are declining in the United States, according to the North American Electric Reliability Corp.’s 2007 Long-Term Reliability Assessment and its appendix for 2007-2016, released in October. NERC assesses electric reliability annually. NERC’s key finding was that “projected increases in peak demands continue to exceed projected committed resources …” Many areas of the country, most notably Texas, Nevada, California, New England and the Rocky Mountain states, are expected to drop below established capacity margins as soon as 2009. Other areas, including the Midwestern states, New York and the mid-Atlantic seaboard, will fall below peak summer margins between 2010 and 2012. Conservation and demand response initiatives may help bridge the capacity shortfall somewhat. But the projected growth in electricity demand will be difficult to meet through these efforts alone. In its publication, Annual Energy Outlook 2007 with Projections to 2030 released in February 2007, the Energy Information Administration forecasts that U.S. demand for electricity will increase at an average rate of 1.5 percent a year through 2030. This translates into a need for the addition of 6,000 megawatts per year of new electric generation. In light of this significant increase in demand, no viable domestic source of energy should be dismissed – be it nuclear, renewable, natural gas or coal. Certainly, each energy resource has its limitations and challenges. Natural gas is supply constrained and highly price volatile. Renewable generation is intermittent and requires significant use of land resources and transmission infrastructure development. Nuclear energy faces long construction time lines and permitting challenges derived in large part from safety considerations and waste disposal issues. Coal’s challenge is to continue to improve upon an already improving record of environmental advancements. Over the past 35 years, technology has driven greater economic growth and coal use, with lower criteria emissions. A portfolio of technologies currently under development holds promise for enhancing generation efficiency and reducing, capturing and storing CO2 emissions. In June, the National Coal Council released a study prepared for U.S. Energy Secretary Samuel W. Bodman called “Technologies to Reduce or Capture and Store Carbon Dioxide Emissions.” “The nation will benefit from technologies that can simultaneously address climate change, reduce emissions and improve energy security,” the study reads. Utilities and public utility commissions nationwide have endorsed the development of new coal plants in recognition of the need for reliable, affordable baseload power, utilizing advanced clean coal technologies. It is likely, however, that nearly two-thirds of those plants will never be built. DOE’s National Energy Technology Laboratory notes that new coal-fueled generation is increasingly required for maintaining minimum regional electricity capacity margins. The laboratory has stated that only 45 coal generation plants equivalent to a generating capacity of 23,240 megawatts are permitted, near construction or under construction. Actual plant capacity, commissioned since 2000, has been far less than new capacity announced. In 2002, for example, proposed capacity additions to be installed by 2005 totaled nearly 12,000 megawatts; only 329 megawatts were actually built. The response to development of new coal generation falls into two categories – no coal and clean coal. A number of states have adopted the no coal approach, citing climate change concerns and an unwillingness to consider the use of advanced clean coal technologies without carbon capture and storage capability. This approach will not advance a solution to our nation’s energy demands and security needs. The lack of a concerted public policy commitment to developing clean coal and CCS technologies will foster an increase in no coal initiatives and have consequences for the reliability of our electricity supply. Other states and power plant developers are advancing clean coal facilities, including supercritical, ultra-supercritical and integrated gasification combined-cycle plants, and technologies to mitigate CO2 emissions. Unfortunately, these efforts to promote soluJanet Gellici tions to our nation’s future energy needs are phOTO cOurTEsy OF aMErican cOaL cOunciL also increasingly being thwarted. The recent announcement by Orlando Public Utilities and Southern Company to cancel its alreadyunder-construction IGCC plant in Florida and the denial of a permit for Sunflower Electric’s Holcomb advanced coal and bioenergy facility in Kansas are particularly disheartening. Both plants would have advanced our environmental and energy security objectives, contributing to the development and commercialization of clean coal and CO2 mitigation technologies. Clean coal technologies cannot be willed into existence. Their development can and must, however, be expedited to ensure our nation’s energy security. We would do well to support those willing to take the first steps toward advancing new technologies. It is in our national interest to do so. Janet Gellici is executive director of the American Coal Council. 8 E n E rgyB i z January/February 2008
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