Both GreenGen and the Huadian project receive a small amount of financial support from China’s Ministry of Science and Technology, which Sun says carries important prestige for the utilities involved: “These government grants recognize their technology leadership, and mean much more [than cash] to Chinese companies.”
Ming of the Clean Air Task Force explains how the utilities involved rationalize the investment in more expensive IGCC technology even with slim government funding. He says that, while China’s electricity sector is technically deregulated, the National Development and Reform Commission (NDRC) still has final say over the tariffs that new power plants will earn per megawatt-hour supplied. It can therefore adjust the tariffs to ensure a reasonable rate of return for projects that respond to local or national interests, enabling the utilities to experiment.
However, NDRC control also slow IGCC’s progress if political will weakens. Ming acknowledges that NDRC may be less willing to approve projects that impose higher costs on consumers, in light of the current economic crisis.
James Childress, executive director of the Gasification Technologies Council, argues that projects like GreenGen are largely political. “They are doing it to put a better face on what is mostly just a ‘Burn coal and don’t worry about it’ policy,” he says. “In the current economic climate, I can’t imagine there being a drive to do anything seriously on CO2.”
As for IGCC’s prospects in the United States, Duke Energy’s 630-megawatt IGCC project at Edwardsport, IN, is the only one going forward nationwide. This is because it provides a means of using Indiana’s high sulfur coal, which produces too much pollution to be used in conventional plants. All the other IGCC proposals are caught up in a moratorium on new coal power imposed by state environment and utility regulators wary of the climate change and the economic impact of carbon emissions.
Last year, for example, Tampa Electric postponed plans for a commercial IGCC unit in Florida adjacent to an already operating demonstration unit built with DOE support in the 1990s after the state announced a climate-change plan.
Right now, the coal and utility firms supporting the FutureGen project are looking to president-elect Obama to jumpstart their project and others; they reinforced their commitment to the project this week by purchasing a $6.5 million site for it in Illinois. Childress, however, expresses little hope for rapid action. “Wind, solar, biomass, and other renewables have a bigger seat at the table right now,” he says.
Childress predicts that coal gasification will eventually flourish in the United States, but as “stealth coal” rather than as IGCC. He says that utilities will use gasification technology to generate synthetic natural gas to keep gas plants running. “I call it stealth coal because one way or another, we’re going to need more gas,” he says. “If you can’t put coal into the front end of a plant making electricity, they’re going to put it into the front end of a plant making natural gas.”