egy for overcoming the barrier of the high costs and risks involved in using ''pioneer technologies." It was recommended that approximately $1.4 billion be provided over 15 years (1995-2010) to provide about 10 to 15 percent of total capital and to help offset operating risks for the first plant after the demonstration plant, with a decreasing amount for the next three to five installations. Cost sharing would be for a percentage of that part of the commercial application that represents technical and economic risks not present in commercially available technology. This initiative would be in addition to the DOE FE R&D and CCT programs for technology demonstration.

Conclusions
  1. Adequate technology demonstration and commercialization programs are essential for timely commercial application of new coal use technologies.
  2. The timely introduction of clean coal technologies will depend on further demonstrations of a few pioneer installations beyond the CCT program to allay concerns about costs and reliability; some federal participation will be necessary to stimulate private sector investment.
  3. Cost sharing of the risk differential between pioneer plants and commercially available technologies will accelerate the commercial acceptance of many of the new coal-based technologies.
Recommendations12
  1. *Support of the current CCT program should be continued and the ongoing program completed. While no further solicitations are planned under the existing CCT program, the FE coal R&D program should continue to cofund demonstrations of selected Group 2 and Group 3 advanced clean coal technologies beyond those currently being demonstrated by the CCT program.
  2. Any uncommitted funds from the CCT program should continue to be spent on activities related to the domestic use of clean coal technologies.
  3. *An incentive program should be developed and implemented that would offset the capital and operating cost risks associated with early commercial applications of technologies previously demonstrated at a commercial scale.
  4. Management of an incentive program by DOE should be the same as that of the current CCT program. The elements should be the same, except that cost sharing applies only to the risk components and not the total project costs. Because the solicitation, negotiation, design, construction, and demonstration phases can take five to seven years, multiple solicitations in several fiscal years should be conducted near the end of the demonstrations of the current 45 projects.

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Asterisks (*) identify the most important recommendations.



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