Cover Image

Not for Sale



View/Hide Left Panel

ciency and increasing the cost of electricity. In addition, the feasibility of installing CO2-capture retrofits varies strongly from plant to plant. Analyses that can determine when retrofitting a plant becomes more cost-effective than building a new plant, and what percentage of CO2 is captured in that situation, would provide considerable aid to policy makers.

New natural gas combined-cycle plants are competitive with new coal plants. Even though natural gas plants have lower capital costs and shorter construction times, the price of natural gas strongly influences investors. For example, with natural gas at a price of $6 per million British thermal units (Btu), natural gas plants are the lowest-cost option for electricity generation, whereas natural gas at $16 per million Btu makes such plants the highest-cost option. For comparison, over the course of this study U.S. natural gas prices rose above $13 per million Btu and fell to below $4 per million Btu.

Future rules governing greenhouse gas emissions and the pace at which CCS technologies can be commercialized will also affect the competitiveness of coal versus natural gas. Although a large shift toward natural gas would increase demand and put upward pressure on prices, the AEF Committee considered it wise to plan for a broad range of future prices and varying domestic availability. It envisioned some CCS projects involving natural gas combined-cycle technology as being part of the recommended 10 GW of CCS demonstrations.

The AEF Committee compared the costs of new pulverized-coal, integrated gasification and combined-cycle, and natural gas plants, with and without CCS, built with components available today and with various prices assigned for CO2 emissions. (The committee also considered biomass, and biomass and coal in combination, as feedstocks.) If no price is put on CO2 emissions, pulverized coal without CCS is the cheapest option (see Figure 6 on p. 37). However, in a world with a price on carbon, CCS will most likely be required. If CCS becomes necessary, adding it to pulverized-coal plants is more expensive than adding it to integrated gasification and combined-cycle plants. Assuming a price of $50 per metric ton of CO2 and the use of bituminous coal, the cheapest of the four coal plant options for generating electricity is integrated gasification and combined-cycle plants with CCS, even though the electricity would still cost more than at current rates. If domestic natural gas proves plentiful and prices remain in the range of $7–9 per million Btu or lower,15 then natural gas plants with CCS could compete

15

Rising to the Challenge: A Study of North American Gas Supply to 2018, Cambridge Energy Research Associates, Cambridge, Mass., 2009.



The National Academies | 500 Fifth St. N.W. | Washington, D.C. 20001
Copyright © National Academy of Sciences. All rights reserved.
Terms of Use and Privacy Statement