McIlvaine predicts the biggest investments in new coal-fired generation will be in Asia. However, ultra-supercritical coal-fired power plants will replace aging inefficient coal-fired power plants in much of the rest of the world. There are multiple reasons for this revision in direction for the utility industry, according to McIlvaine, primarily:
-
Ultra-supercritical coal plants are now viewed as a 25-year bridge to the future.
-
Nuclear is now viewed as riskier than before the Japan nuclear disaster.
-
The greenhouse gas impact of shale gas and even conventional gas is much greater than previously believed.
-
New coal is a clear economic and environmental choice for the next 25 years.
McIlaines says replacing old coal power plants with new coal power plants will have very large environmental benefits, while not increasing the cost of electricity. McIlvaine says the new plants built prior to 2020 should then be replaced in 2045 with whatever is the best choice at that time. Solar and wind are likely to be competitive by that date. Nuclear could be viewed as safer than it is today. Coal, with CO2 sequestration, may also be an option, but not in the near term.
McIlvaine says the nuclear problems in Japan create safety and health concerns, as well as financial uncertainty. The costs of future power plants are likely to rise, as new arrangements have to be made for spent fuel rods. The sitting problem for any individual project will be come much larger, with some countries already having announced changes in their nuclear plans.
McIlvaine says recent studies have revealed that the methane emissions from conventional gas are much higher than previously believed. Shale gas has even higher methane emissions, according to McIlvaine, which makes it a high greenhouse gas option.
The perception of coal as “dirty” is based on the ancient fleet operated by the U.S., according to McIlvaine. The best way to view the alternatives from an environmental perspective is to convert all pollutants to “tons of CO2 equivalent.” Using this approach, McIlvaine says a ton of methane is equal to 29 tons of CO2 due to its more potent greenhouse effect. Nitrogen oxides, sulfur oxides, particulate, mercury and other toxics emitted to the air and water can also be expressed in tons of CO2 equivalent.
Another factor to be considered is indirect energy use and consequent CO2 implications. The energy used to explore, extract and purify shale gas is higher than that needed for conventional gas. In fact, most new gas will come from sources which require higher amounts of indirect energy. This indirect use can also be expressed in “tons of CO equivalent.” Both old and new coal power plants emit more CO2 than alternatives, says McIlvaine.
Old coal power plants are also large emitters of a wide range of pollutants to air and water. But new coal power plants with efficient air pollution control systems and zero liquid discharge are low emitters, says McIlvaine. Because of the methane emissions, both conventional gas and shale gas are relatively large emitters of pollutants when the common metric of “tons of CO2 equivalent” is utilized
When the direct and indirect emissions are compared based on the common metric it is clear than new coal power plants are the best fossil option, according to McIlvaine.
The biggest driver for coal will be its low cost compared to alternatives. The Energy Information Administration is projecting that large quantities of shale gas will be utilized in the U.S. But because of the shrinkage in conventional gas production, the U.S. will remain a net importer of gas for the next several decades. Because gas can be converted to liquids or substituted for liquid products there has been an historic ratio of oil to gas prices. Since oil is likely to remain above $100/barrel, gas prices figure rise appreciably in the coming years.
