Integrated gasification combined cycle (IGCC) power plants use coal to produce electricity in a fundamentally different process than pulverized coal plants. The process starts by heating coal under pressure to create a methane-rich gas, which, after cleaning, can be used in a combined-cycle unit (gas and steam turbines) for efficient electricity generation. While there are several operational IGCC plants in the U.S., the technology is not yet considered commercial due to its higher costs and questionable reliability. These hurdles, some argue, could be overcome with more field experience. Importantly, IGCC plants offer significant reductions in criteria pollutants and the ability to capture carbon emissions more efficiently than at pulverized coal plants.
Without carbon capture and storage (CCS), IGCC plants are likely to offer, at best, a small reduction in carbon dioxide emissions compared to traditional pulverized coal. With CCS, IGCC plants could capture 85-95 percent of their emissions, which could then be injected into deep underground formations. A recent publication by the Intergovernmental Panel on Climate Change estimates that a carbon dioxide value of $50-75 per ton is required to overcome the added cost of IGCC with carbon capture. This corresponds to an increase in electricity prices of approximately 2-3 cents per kilowatt-hour. To test the technical and economic viability of combining IGCC with CCS, at least two initiatives, FutureGen and Zerogen, are underway, respectively, in the U.S and Australia. Slated for completion in 2012, these initiatives offer major learning opportunities.
U.S. utilities currently face difficult investment choices. Knowing that carbon constraints are no longer a question of “if” but of “when”, most forward-looking utilities seek to mitigate carbon liability risks in their investments decisions. Some would like to build IGCC plants now because of their environmental benefits and ability to capture carbon more easily, either immediately or at a later stage. But in most cases, a back-up gasifying unit is required for reliable operation of IGCC plants today. This spare gasifier raises capital costs and, combined with other uncertainties, makes investing in IGCC hard to justify in some jurisdictions. Clearly, providing greater certainty on the scale and timing of the looming climate policy would help utilities plan and invest more effectively. Without improved certainty, U.S. electric power security is threatened.
Other challenges besides high cost must be overcome before IGCC with CCS is to deploy more widely. Currently no regulatory framework exists to govern how CCS projects are done. How projects are sited, what monitoring must be done to ensure that carbon dioxide remains in specified reservoirs, how accounting is done to properly credit parties fairly, and how to design a financial responsibility system to deal with long-term liability remain unanswered questions. Ultimately, public acceptability of CCS also remains an issue.