by Section 1301 of EPACT. The CCTC's specific position regarding Sections 1301 c(3) and c(4) is as follows:

  • While continuing to support the completion of the projects already selected in the current CCT program, the program would be modified to address commercial deployment by reducing the financial risks associated with the use of the technologies.
  • The program would operate basically as it does now but would cost share only certain cost differentials when compared to a conventional technology. The DOE's cost share of the "risk gap" would be significantly less than the current 50 percent. Specifically, DOE support for commercial demonstration plants would be determined using a risk-based formula to make a given CCT cost competitive with conventional technologies.

With regard to Section 1301 c(5), the CCTC would keep the same program elements and management structure in place, with a revised focus on cost sharing the financial risk. The proposed risk-based formula for determining cost sharing would address both capital cost risk and operating cost risk. As these risks decrease in subsequent demonstrations, so would the cost-shared DOE support, resulting in eventual commercial acceptance with no cost sharing. Timing of this future program must build on the first-of-a-kind projects and result in commercial acceptance to meet repowering and new capacity requirements from 2005 onward.

The NCC, a federal advisory committee to the Secretary of Energy, has, at the request of the Secretary, made recommendations regarding the future direction of the CCT program (NCC, 1994). The NCC has recommended that no more solicitations be issued under the current CCT program. The NCC further recommends that the Secretary foster the establishment of a new federal-level CCT incentive program to stimulate initial and sustainable commercial deployment of CCT. The recommended CCT incentive program would provide approximately $1.1 billion of capital incentives and $0.3 billion in operating incentives over the 15-year period from 1995 to 2010. The incentives would offset 10 to 15 percent of the capital risk and help offset operating risks associated with first-of-a-kind and early commercial units. The incentive would be based on a percentage of the capital and operating cost risk differential between the CCT and conventional technology. For example, if the risk differential between a 400-MW IGCC project and conventional pulverized coal with FGD plant is $360 million, the federal incentive for the project would be $54 million or 15 percent of the differential.

International CCT Initiative

Section 1332 of EPACT (Innovative Clean Coal Technology Transfer program) proposes the development of a joint DOE/Agency for International Development clean coal technology program to encourage exports of U.S. technologies that allow more efficient, cost-effective, and environmentally acceptable use of



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