POWER May 2011 - 112

Commentary
Solving the Challenges of
Growing Energy Demand
By Brandon C. Bethards
T
he electric power generation landscape in both America and
the rest of the world is poised to undergo a fundamental
transformation in the next several decades. Global energy
consumption is projected to rise dramatically by 2035, and
the methods by which we generate electricity and the fuels we
choose to use will begin to change as well.
Richard Newell, the U.S. Department of Energy's (DOE) administrator
of the Energy Information Administration, testified
in February 2011 before the Senate Committee on Energy and
Natural Resources, predicting that global energy consumption-
including electricity and oil for transportation-will grow by
50% over the next 25 years, with much of that growth occurring
within developing nations.
America's energy demands will also increase, and while the
U.S. will continue to rely on fossil fuels for power generation,
Newell pointed out that America will increasingly turn toward
using cleaner sources of energy such as nuclear power, renewables,
and natural gas. Meanwhile, large developing nations such
as China will increase their use of coal and other fossil fuels
dramatically.
These predictions create some distinct challenges in meeting
the rapidly increasing power demands of the world. Among those
include managing global competition for limited energy resources
and developing alternative and affordable methods for power
generation while safeguarding our environment. The approach
we take to confronting energy challenges in the next several
years will shape our future for generations to come.
Key Solutions: New Technologies and Policies
In the U.S., technology and policy are two key mechanisms that
can help us meet these challenges. Maximizing the impact of
new, innovative energy technologies, and developing energy and
environmental policies that are effective, affordable, and practical,
will require significant cooperation between the public and
private sectors.
The Babcock & Wilcox Co. (B&W) and other businesses have
invested millions of dollars over the years researching and developing
solutions to meet the power generation needs of the
future. We made this investment because we believe that nuclear
power, clean coal technology, and renewable energy sources all
play important roles in helping utilities cleanly and efficiently
generate and deliver electricity to the grid.
Even though we can foresee the benefits of these clean power
generation options, the development and commercial deployment
of any new technology is inherently expensive and risky.
This is particularly true in the energy business. Support through
policy, regulation, and funding derived from the public sector,
however, can help mitigate these risks.
For example, several of the small modular reactors (SMRs) receiving
attention in the industry are based on proven nuclear technol100
ogy
and have improved designs that more effectively address safety,
security, and environmental requirements. Still, it's essential that
companies developing SMRs have a clear path to obtaining regulatory
approval through the rigorous Nuclear Regulatory Commission
design certification and licensing process, and a sharing in the cost
of further development and licensing efforts.
Few U.S. utilities are in a position to shoulder the entire cost as
well as the risk to deploy first-of-a-kind commercial applications,
such as SMRs or coal-fired generation with carbon dioxide (CO2
capture and sequestration (CCS). Although CO2 capture has been
)
proven feasible in the lab and at limited scale, a full-scale project
is essential to showing commercial viability at a reasonable cost.
Utilities' obligations to investors and ratepayers limit the financial
and technological risks they are able and willing to assume.
The Importance of Public-Private Partnerships
In the cases of both SMRs and CCS, the success of these programs
depends on the willingness of the U.S. government to share in
the risk and cost burden to develop, license, secure regulatory
approval for, and deploy these technologies. Federal and state
governments also have a role in the successful deployment of
these technologies through the energy and environmental policies
they create.
FutureGen 2.0 is an example of a public-private partnership
that will help take a clean energy solution from research to
reality. Ameren Energy Resources, B&W, Air Liquide Process &
Construction, and the FutureGen Alliance have teamed with the
DOE to repower a plant in Illinois, equipping it with oxy-coal
combustion technology to capture and store 90% of its CO2
emissions.
The DOE is providing substantial support for this project
in the form of a cooperative agreement grant, which reduces the
capital risk for the developers and makes it more feasible than
with private financing alone.
Large-scale innovations like FutureGen 2.0 and SMRs are important
to America's energy future. The knowledge and lessons learned
from the development and deployment of projects like these have the
potential to benefit utilities and ultimately consumers, thus making
public investment a worthwhile economic endeavor.
It is critical that industry and government are aligned and
work together to implement clean energy technologies and energy
legislation that will ensure energy security, demonstrate
environmental stewardship, and drive economic growth. The
technologies, policies, and regulations developed from such cooperation
will set the stage for addressing energy challenges we
face in the future. With sound input from industry, utilities, and
the public, a public-private approach can blaze a path to the
broad deployment of clean energy and emissions reduction technologies
that are both environmentally sound and affordable. ■
-Brandon C. Bethards is president and chief executive officer of
The Babcock & Wilcox Co.
www.powermag.com
POWER | May 2011
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POWER May 2011

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