Statement of Nina Bergan French, Ph.D, Director, Clean Coal Combustion Products, ADA-ES, Inc., Littleton, Colorado

Testimony Before the Subcommittee on Select Revenue Measures
of the House Committee on Ways and Means

April 19, 2007

For the past 30 years, the scientists and engineers at ADA Environmental Solutions have built an international reputation for developing and commercializing highly efficient emissions measurement and control technologies for the power industry.  In 2000, we began to focus our efforts on research, development, and demonstration of technology for reducing mercury emissions.  Today, we are the market leader in providing commercial equipment to capture up to 90% of mercury generated by the combustion of coal. These experiences demonstrate the importance of the right Federal involvement.

My Testimony Today

Today I would like to give you my perspective of clean coal.  I will discuss the following points:

1)      Coal is critical to our future because it is reliable (base load capacity), inexpensive, abundant, and local.

2)      We have demonstrated the ability to meet environmental challenges with NO_x, SO₂, particulates and mercury.

3)      Federal incentives (e.g., tax credits) have been effective in advancing technology to ensure options exist and costs are reduced.

4)      Success for new technologies depends on a careful balance between:

• Incentives for technology development,
• Time for risk mitigation, and
• Regulation or tax-based market drivers (“sticks” and “carrots”).

5)      CO₂ control seems to be the next concern. Critical points are:

• The scale is massive.
• Timeframe is probably long -- 10 to 20 years.
• Investment is critical.
• History tells us success is likely.
• Investment and incentives need to be designed to ensure that:
  • multiple paths are followed, and
  • costs and risks are reduced.

Coal Is Critical To Our Futuree

Let me start by discussing why we, as an environmental technology company, believe that the continued use of coal is critical to sustainable, reliable power generation in the U.S. 

America leads the way in environmentally-beneficial technologies.    As regulations tighten, we continue to improve technology that improves the air we breathe and the water we drink.  We reap these benefits because our strong economy allows us to allocate significant resources to these efforts.   We need power generation that is inexpensive, reliable, and environmentally safe. Our future depends on it.  We believe that coal provides domestic energy security, low-cost energy, and reliability.   The country today is asking, “Can we make coal clean enough, and if so, how do we do it?”  Today, more than 1,100 coal-fired boilers produce more than 50% of our nation’s electricity.  Statistics show that states that choose coal for generation are rewarded by low-cost electricity.  Figure 1 shows that there is a strong correlation between the use of coal and the ability to provide inexpensive electricity.

Economic development requires enormous investments in all aspects of energy infrastructure and significant increases in power generation. The U.S. is expected to need 50% more electrical capacity by 2030.  Any expansion of power supplies must recognize that no single energy source can meet our growing energy needs.  This requires a portfolio of solutions, including efficiency gains, more renewables, new nuclear power capacity and new coal-based generation. 

As renewables such as solar and wind power become a greater portion of our energy mix, it becomes even more important to maintain a source of reliable power that can operate continuously, day and night, and in all weather conditions.  The reliability of coal-fired power plants has improved significantly over the years.  Our plants have increased operational capacity from 59% in 1990 to between 80% and 85% in 2006.  It’s simple; we care more now. Electricity is a much more valuable commodity than it has ever been. This is the motivation that drives us to optimize our current investment.  We really have no other choice as it would take decades to replace our current infrastructure.

Figure 1.  Cost of Electricity in a State as a Function of the Percentage of Electricity Produced from Coal.

Coal can also play an important role in national security by reducing our dependence on foreign energy sources.  The United States has the largest coal reserve in the world, and America has more coal than any nation has of any single energy resource.  At current consumption rates, these coal reserves could supply 250 years of fuel. This is far greater than our reserves of natural gas and oil combined.  

For these reasons, coal remains an essential part of the U.S. generation mix as a secure, plentiful, and relatively inexpensive fuel source.  However, we as a nation must determine how to continuously improve emissions. Our goal needs to be Clean Coal.

 Clean Coal Background

 The emissions control industry has made huge advancements in technology to improve emissions from coal-fired power plants. Collaboration among research organizations, universities, and power generation partners has enabled emissions of criteria pollutants sulfur dioxide (SO₂), nitrogen oxides (NO_x), and particulates from the existing fleet of coal fueled power plants to be lower today than they were in 1970, even as power produced from coal plants has increased by 173% (See Figure 2). 

Reductions in NOx, SO₂, and particulate emissions were driven by a balance between technology development incentives and emissions regulations.   Each made the other better.  As an example, in the early 1970’s flue gas desulfurization equipment, commonly referred to as “scrubbers,” were new and suffered from poor reliability and performance.  Over time, as experience was gained and equipment modified, efficiencies rose from about 70% SO₂ removal to today’s 95 to 98%, with similar improvements in reliability.  The emissions of criteria pollutions shown in Figure 2 will continue to decrease each year as emission control equipment is installed on more plants as a result of new regulations such as the Clean Air Interstate Rule. 

Figure 2.  NO_x, SO₂, and particulate emissions from coal-fired power plants continue to decrease even though we are.

Challenges in Developing New Emission Control Technology for the Power Industry

To understand how to make coal cleaner, it is helpful to appreciate how emissions control technology has developed for this industry.  Since the first Clean Air Act of 1970, the power industry has gone through several rounds of implementing emissions control technology for NO_x, SO₂, and particulates.   In each case, there were very similar experiences as the new technology was applied in an industry where reliability and compliance are mandatory.  We learned the following important lessons::

• Be prepared for unexpected reactions between flue gas constituents and chemical reagents used to control the pollutants;
• Do not underestimate the differences in coal and plant operating conditions to cause wide variations in emissions;
• Try to plan for significant O&M problems that might not show up until after long-term operation; and
• Look for secondary effects on other components of the power plants.

In each case, new-technology challenges had a significant impact on the reliability of power generation.  The plants were forced to operate at reduced loads and suffered many unplanned shutdowns for maintenance and repair.  Over time, technologies were improved to an acceptable level of cost and reliability.  This is the true measure of acceptance.    The impact depends on how widespread the technology was applied during the early adopter phase.  For example, Hot-Side Electrostatic Precipitators (for particulate control) have cost the industry over a billion dollars. After initial successes, the technology was quickly applied to 150 power plants only to have a fatal flaw subsequently discovered. 

One of the challenges with implementing new emissions control technology is that everything is so big.  The scale is massive.  For example, emissions control equipment for a 500 MW plant treats two million cubic feet of flue gas every minute.  Scrubbers may be as large as the power plant to which they are attached.  Remember that we need to add new emissions control technology without taking the plant off-line.  We have learned that the best way to bring new technologies to an existing coal-fired power plant is to proceed through a carefully chartered course:

1. Laboratory testing:  provides a cost effective means to determine general feasibility and test a variety of parameters.
2. Pilot-scale: test under actual flue gas conditions but at a reduced scale.
3. Full-scale field tests:  scale up the size of the equipment and perform tests under optimum operating conditions to define capabilities and limits of the technology.
4. Full-scale field tests at multiple sites:  each new site represents new operating conditions and new challenges. 
5. Long-term demonstrations at several sites:  Some problems will not show up until the first year or so of operation. 
6. Widespread implementation:  Problems will still be found at new sites, but most of the fatal flaws will have already been discovered and resolved.

We know from experience that trying to accelerate technology development by skipping these steps can result in large-scale operating problems and untimely and expensive plant outages.  We also know that it takes ten to twenty years to successfully implement a major technology in this industry and implementation presents significant risks to the developer and user at each stage.   In addition to the technology risk, there is significant financial risk to the developer.  This is especially true when there is no regulation to guarantee a market will exist for a technology to control an emission that has not been previously regulated.  There is often a “chicken and egg” dilemma in which there is no regulation to incentivize the development of a new technology and therefore there is no technology on which to base a regulation.  Such was the case in the recent past, when the power industry was faced with reducing mercury emissions for the first time.

ADA-ES Experience in Developing and Implementing Mercury Control Technology

 It is instructive to present a case-study on how Federal initiatives effectively provided incentives and risk mitigation that allowed industry to successfully develop cost-effective mercury control technologies for coal-fired power plants.

Methylmercury, which builds up in certain fish, is a neurotoxin that leads to developmental problems in fetuses of pregnant women.  Mercury contained in coal represented the largest man-made source of mercury. In December 2000, the EPA announced that it was beginning to consider regulating mercury emissions from the nation’s coal-fired power plants. 

In anticipation of future regulations, the Federal government and industry funded research to characterize the emission and control of mercury compounds from the combustion of coal. Some estimates showed that 90% mercury reduction for utilities would be expensive for the industry because of the  large volumes of gas to be treated, the relatively low mercury concentrations, and the difficulty of capturing certain species of mercury in its vapor phase. 

With potential regulations rapidly approaching, it was important to concentrate efforts on the most mature retrofit control technologies.  Injection of dry sorbents such as powdered activated carbon (PAC) into the flue gas and further collection of the sorbent by ESPs and fabric filters represented potentially the most cost-effective control technology for power plants.

The DOE realized the criticality of demonstrating and optimizing scale-up of sorbent injection technology to provide performance data for regulations.  The DOE National Energy Technology Laboratory cost-shared these demonstrations, with additional funding from several power companies, the Electric Power Research Institute, and private ADA-ES funding. 

The DOE-supported field tests resulted in great advances in technologies to capture mercury emissions and decreased costs.  A 2005 report by the DOE Energy Information Administration concluded that because technology for 90% mercury control from Western (Powder River Basin) coals was not available, an overall 90% mercury control rule could cost $358 billion. However, use of these new technologies later demonstrated that the 90% reduction for PRB coal could be achieved for less than $1 billion per year.  This saving represents a huge return on the investment made by the Federal government in supporting early development and demonstration of mercury control technology.

This success has allowed a dozen States to take mercury control into their own hands and implement stringent regulations on power plants in their respective states. This action has created the first real commercial market for the new mercury control technology. 

Refined Coal Tax Credit (Section 45)

Tax incentives also play a vital role in achieving even further emission reductions.  The 2004 American Jobs Creation Act included a production tax credit designed to incentivize clean coal at the front end – changing the way the coal burns - for older plants with limited resources or space to add back-end emission control.  The tax credit was written with clear emissions reduction goals:  20% NO_x reduction and either 20% mercury or SO₂ reduction.   An additional market value test, requiring that the product result in a 50% increase in market value over the feedstock coal still needs clarification (a baseline and enforcement guidelines), but the credit is significant in that it represents a strong goal-oriented, rather than specific technology-driven, tax incentive. 

ADA responded to the incentive of the tax credit and assembled a team to apply our mercury control expertise to invest in technology development for a refined coal product that will allow older cyclone boilers to reduce mercury emissions by 90% -- enough to meet stringent State regulations, simply by burning refined coal. Clarification on the market value test will allow us to move to full-scale demonstrations to optimize and deploy our refined coal technology, and realize the goals Congress intended by the legislation.

Clean Coal: Carbon Challenges

Carbon, in the form of carbon dioxide (CO₂), is a greenhouse gas that is believed to contribute to climate change.  Our goal is to reduce CO₂ from both new and existing coal-fired power plants.  This presents a number of challenges for technology development.  It is not our purpose detail the technologies being advanced to address these issues.  There will be a comprehensive report issued by the National Coal Council this summer that will provide in-depth background on the various approaches.  At this point, I would like to briefly mention three key areas for technology development.   

1) First, increased efficiency.  The most effective way to quickly decrease carbon emissions is to increase efficiency of power production on new and existing boilers.  Today we have more than 1,100 coal-fired boilers in the U.S. with an average age of 45 years.  When many of these plants were built during the 1950’s and 1960’s, we did not care much about efficiency because coal was readily available, and cheap.

Figure 3 shows that we produce 25% less CO₂ as boiler efficiency increases from 35% to 50%.  That is 25% less carbon that we have to separate and sequester.  In May 2001, the National Coal Council produced a report which identified technologies that could increase the amount of electricity from the existing fleet of coal plants by 40,000 MW in a three-year period.  Those recommendations remain viable today.  To increase the amount of electricity generated by the existing fleet by 40,000 MW without the need to build a single new plant of any fuel type represents a tremendous greenhouse gas mitigation opportunity for this country.

However, although increased efficiencies result in lower CO₂/MW-hr, they also require higher $/MW-hr.  Currently there is no incentive to absorb the increased costs for reduced carbon dioxide emissions.

2) Carbon separation. Nitrogen comprises 78% of the flue gas from a coal-fired power plant.  We have to separate the carbon from the nitrogen.  Known technologies to do so include oxygen-fired combustion and amine (MEA) scrubbing for pulverized coal (PC) boilers, or chemical separation for integrated gasification combined cycle (IGCC) systems.  The challenges now relate to scale and cost.

3) Carbon storage and sequestration.  Once the carbon is separated, we must store, or sequester, it.  Known technologies to do so include injection for enhanced oil recovery (representing only a small percent of CO₂), deep well injection, and deep ocean injection.  The biggest challenges are the unknown long-term effects, which will determine long-term ownership and legal liabilities.  Transportation of CO₂ from plants to storage sites will require very large and expensive infrastructure.

Figure 3.  CO₂ emissions as a function of Net Plant Efficiency. 

The Size of the CO₂ Problem

Carbon dioxide emissions from coal-fired power plants are bigger than anything we have ever tackled.  The average 500MW plant produces 900,000 lbs of CO₂ per hour, and for a typical PC boiler, this CO₂ is highly diluted in the flue gas.  Compare this amount of CO₂ to about 0.01 lbs of mercury per hour for the same plant.  The scale for carbon capture and storage technology is daunting and the costs will be high.

Technology maturation for carbon capture and storage will take time. The technologies are in their infancy.  However, based on advances to date, they will become available and less costly, within the next 20 years or sooner.  Carbon capture and storage technologies can be expedited, but they cannot be willed into existence overnight by changes in policy.  CO₂ emissions from the U.S. are only a fraction of the world’s carbon emissions.  Technology developed in the US, can be transferred to countries like China and India that will allow the U.S. to leverage its investment in technology development.

New Coal-Fired Generation

Utilities are designing new coal-fired power plants to incorporate carbon separation and capture technologies as they become available.  New coal plants will include both supercritical and ultra-supercritical PC boilers, as well as IGCC systems.  They will incorporate the same carbon separation and storage technologies described above.

The Role of Carrots and Sticks in Encouraging Investment in Technology:  

Not Choosing a Winning Technology

Coal-fired electricity is cleaner today as a result of a balance between “Carrots” (e.g., government-funded technology development or tax incentives) and “Sticks” (e.g., government regulation or restrictions).  You cannot impose the Stick until technologies are ready, or nearly ready, and you need the Carrots to ready the technologies. 

In promulgating carrots and sticks, it is also important that the government defines a goal (e.g., reduced carbon emissions), but does not choose winning technologies.  This notion is supported by most recent collaborative studies on reduced carbon emissions.  For example, the recent MIT Interdisciplinary study, “The Future of Coal,” suggests that the government must not select specific technologies, but rather should incentivize technology development towards a common goal. 

Timing is Critical: If we impose clean coal restrictions (e.g., in the form of carbon taxes or emission limits) before separation and storage technologies are available, electricity costs will spiral, unraveling our economy and our ability to afford new technologies.  However, history has demonstrated that if we first incentivize technology development, provide for risk reduction, and carefully time restrictions, the market will develop and provide winning technologies.

Summary

Clean Coal is an important and viable part of our energy future.  To move coal into a carbon-constrained world, we need to:

• Preserve base load electricity-generating capacity with reliable, inexpensive sources.
• Balance base-load capacity with renewable sources.
• Carefully balance timing between the carrots (tax credit and technology development funding) and the stick (e.g., regulations).
• Incentivize the achievement of goals, not specific technologies (i.e., we should reward any carbon reduction, not just the known technologies to do so).
• Encourage more technology development (R&D tax credits, demonstration tax credits, etc., and coordination with DOE R&D funding).

We need to invest now in tax incentives and support for technology development.  We don’t know enough, yet, to decide which technology will be most cost-effective for each particular facility. Following multiple paths will increase the likelihood of sufficient successful options for application in the future, and will not preclude out-of-the-box technologies that have not yet been envisioned.

We believe that based upon our past accomplishments, given sufficient resources and incentives, we can make Clean Coal a reality.

Thank you for your attention to this important National matter.  We look forward to working with the Committee and the Congress in meeting the challenges ahead.  We would be happy to provide any additional information, analysis, etc., that you or your staff require.