I. Executive Summary

Purpose

The purpose of this statement is to provide an overview of the current status of technology for producing electric power from coal-based systems.  The paper presents discussion of system designs, emissions control technology, fuel reserves, finance considerations, permitting, and public acceptance.  The Energy Committee and the Power Division of ASME’s Council on Engineering believes that coal represents a desirable, viable, and economical option for fueling our present and future national demand for electricity.  We recommend that national policy development and Congressional incentives be directed toward increasing the use of modern coal-fired power plants to increase energy efficiency, reduce pollutant emissions, and provide economic protection from energy price fluctuations.

Overview of Power Generation Technologies

Coal-fired electric power plants today produce more than 50 percent of the electricity in the U.S. at low cost.  Inexpensive electricity is essential to maintaining a dynamic competitive U.S. economy and our standard of living.  All coal-fired power plants operate in conformance with stringent federal and state regulatory requirements.  Most of these plants are capable of base-load (24/7) operation with high reliability. The coal mining, fuel transportation and transmission infrastructure investment, supporting existing plants and some future plants, is in place. New coal-fired power plants are essential to the future of the U.S. base-load power supply.

In 2002, 98 percent of the U.S. electric system power generation came from: coal-fired (50 percent), nuclear (20 percent), oil and natural gas (21 percent), and hydroelectric (7 percent).  Base-load electricity, measured in kilowatt hours (kWh), is generated from these four energy resources (plus some geothermal electricity).  Off-peak electric generation from these sources costs: hydroelectric (0-1 cents/kWh), nuclear (1-2 cents/kWh), coal-fired (1-2 cents/kWh), oil and natural gas-fired (variable, 3.5 – 10 cents per kWh).

Most of the U.S. coal-fired plants are 30-40 years old and have been upgraded to meet emissions regulations.  However, only about 25 percent of these older plants have been retrofitted with scrubbers, and only a few plants are equipped with the most effective flue gas cleanup systems technology now available for new power plants.  While the average net energy conversion efficiency of these plants is about 32 percent, the next generation of new plants can increase this net efficiency to 40 percent or higher with improved technology, thereby reducing coal consumption and emissions in proportion.  This benefit will significantly increase the kWh produced per pound of coal burned, with fewer emissions.

In the next decade, new base-load and mid-range generating capacity will be needed to replace older plants and to support U.S. economic growth.  It is necessary to have at least two low cost energy resource choices for competitive new base-load power plants. All new hydro-electric, nuclear, and coal-fired power plants must overcome formidable and often unpredictable regulatory and permitting obstacles.  These risks are mostly not technical, but the uncertainty makes normal capital investment and financing more expensive.  Engineering and construction lead-times for these large power plants are typically 3 to 5 years after permits are obtained. 

New natural gas and oil-fired plants face the financial risk of volatile natural gas and oil prices currently and projected for the near future. The U.S. is importing more oil and natural gas each year.  Geothermal resources that are economical are limited.  The best hydro-electric plant sites have been developed.  Other renewable energy sources are expensive, based on current technology, and are not reliable for base-load power generation. 

The economic and reliable base-load choices remaining in the U.S. for the near future for new power plants are nuclear and coal-fired power plants.  Both of these choices utilize domestic energy resources sufficient for more than 100 years of electric power generation growth.  Nevertheless, the U.S. must continue the R&D necessary to find new energy resource technologies for our long term needs and to continue improving current resource development and energy conversion. 

Advanced coal-fired power plant technologies are in development and/or demonstration phases for pulverized coal firing, fluidized-bed combustion (FBC) and integrated gasification combined-cycle (IGCC).  Demonstration plants are in operation in the U.S. and show promise for future competitive power generation.  Other clean coal technologies are being developed for multi-pollutant reduction in flue gas emissions.  Efficient SO2, NOx, and particulate removal systems have been proven.  Mercury emission reduction technologies are in development at the pilot plant and demonstration stages. The potential global warming risk could affect future use of coal significantly.  However, coal consumption and all emissions are reduced significantly with higher plant cycle efficiency. 

Stable regulatory requirements are necessary for prudent investment in new coal-fired power plants to predict financial risk.  In addition, these regulations should be periodically reviewed for cost-benefit justification.  More knowledge should permit elimination or relaxation of obsolete requirements that are wasteful. 

Public and media acceptance for new coal-fired power plants is necessary, particularly at the state and local level.  These new power plants provide jobs and economic stimulus at most plant sites.  Local acceptance has been common, but outside groups can adversely influence media and public acceptance.  Factual information must be continuously supplied to the media and the public to make them better informed.  

II Introduction - ASME and Power Generation Background

The 120,000 member ASME is a professional organization focused on technical, educational, and research issues of the engineering and technology community.  The Energy Committee of ASME’s Council on Engineering, comprised of mechanical engineers from industry, government, and academia, represents the breadth of knowledge in energy technologies in the United States.  The ASME Power Division serves to provide ASME members with expertise in cutting-edge power generation engineering technologies. This position statement represents the consensus of these two ASME groups.

Members of ASME conduct research and are instrumental in the development, design, and operation of technologies involving all aspects of energy resource extraction and conversion.  As innovators and designers of many of the systems and equipment used in the many processes of power generation and conversion, mechanical engineers are well qualified to provide expertise on the many important issues facing the nation with regard to energy security.
 
The ASME can assist government regulatory agencies in revising regulatory provisions to remove obsolete requirements and/or apply updated technologies.

III. Pulverized Coal-Fired Power Plants for Base and Mid-Range Load Demand

Coal-fired power plants are not new to serve as base loaded and mid-range power suppliers. From inception, coal fired power plants served the power grid with base loaded reliable power. Even in the face of stiff competition from gas-fired combined cycle power plants, coal fired plants continue to provide cost effective base loaded power.

Before 1970, coal fired power plants were free of most pollution-controlling devices and the cost of generating power was kept low. As the regulations regarding airborne pollution emissions from power plants grew ever stricter, coal fired plant owners were required to install such equipment enabling power generation with less environmental impact.

These additions, however, temporarily made the cost of power production more costly than it had been. In the face of stiff competition from the high efficiency natural gas-fired combined cycle plants, coal fired plants lost an edge in the cost of fuel.  Pollution technologies have become more cost effective and designs more standardized, reducing these cost burdens for the new coal fired plants.

Plant outages have been reduced and the time between scheduled outages continues to increase. This allows the coal fired power plants to continue to serve the power grid during periods of mid-range power needs.  Coal’s value as a power plant fuel is greatly enhanced by its ability to supply power during peak power demand -- as base power -- and off-peak power demand.

It is inherent in the design of coal-fired boilers that operation at steady loads is extremely well suited to the dynamics of the equipment involved. In addition, the newer coal fired plants and coal fired plants of tomorrow are well suited to load changes. This improvement in the design dynamics offer a greater ability to provide power in response to changing needs of the grid.

With commercially available power plant components, an advanced bituminous coal-fired 750 megawatt (MW) plant can be built to achieve an efficiency of 40 percent or higher when using the most effective flue gas cleanup systems. Main steam pressure of about 4200 psig (pounds per square inch gage) and main and reheat steam temperatures of about 1100 degrees Fahrenheit would achieve this efficiency level.

Today's plant design would include flue gas cleanup systems for particulate, SO2, and NOx reduction. With electrostatic precipitators a particulate removal effectiveness of 99.95 percent can be achieved. A wet limestone scrubber can reduce the SO2 with a removal rate of 95 percent.  Low NOX burners reduce the NOx production, resulting in removal of 90 percent of the remaining NOx, using a selective catalytic reduction (SCR) system. These flue gas cleanup systems are commercially available and have long been used in power plants.

Advanced pulverized coal-fired power plants provide load cycling capability, fast daily startups, and fast-sustained load response and load rejection capability. With these features an advanced pulverized-coal-fired power plant is well suited for mid-range power supply and supports the grid system to avoid blackouts.

Besides advanced pulverized coal-fired power plants, pressurized fluidized bed combustion (PFBC) and IGCC power plants have been developed. A small number of these plants are in operation. They can achieve about the same efficiency level as advanced pulverized coal-fired power plants. Fluidized bed combustion is particularly good for burning biomass and other low quality fuels producing power while reducing biomass waste and utilizing fuels used for power.  Integrated gasification combined cycle units can also burn oil residuals.

Today's highest efficiency pulverized coal-fired units are supercritical pressure designs. Power plants with these boilers are ideally suited to producing reliable, cost effective power on a continual basis. Operated as base loaded or in some form of load following mode, having coal fired power as a significant portion of the power supply mix would maintain flexibility in the country's overall power supply and security of fuel supply from domestic sources.

In summary;

o Coal fired power plants have overcome the pollution challenges that face them and, with continued research and development (R&D) support from the Department of Energy, can overcome future environment challenges

o Coal fired power plants provide low cost base loaded power to the grid now and into the future                       

o Coal fired power plants have been continuously upgraded to provide more
 reliable power

o Coal fired power plants will serve the mid-range needs of the power grid

o Coal fired plants provide a much needed base to the needs of the power grid now and into the future

IV. Present Coal-Fired Power Plant Technology and Equipment

Based on the "Pratts UDI Electric Power Plants Data Base," about 1,400 coal-fired power plant units are presently operational in the U.S.  About 50 percent went into operation before 1970 and are therefore at least 35 years old. These older coal-fired units have an average power plant net efficiency of roughly 32 percent.

In the 1970s the most efficient large coal-fired power plants were built, including a significant number of supercritical units. The average power plant net efficiency went up to about 36 percent in this decade. New advanced pulverized-coal-fired power plants with a net power plant efficiency of 40 percent or higher with flue gas cleanup systems are available.

Older pulverized-coal-fired power plants have higher specific coal consumption (pounds of coal per kWh) and therefore discharge a larger amount of flue gas for each kWh generated. Improving the power plant efficiency reduces the fuel consumption as well as CO2 discharge and emissions, all by the same magnitude.

For further emission reductions, mainly electrostatic precipitators, scrubbers, and SCR systems are used. For particulate removal almost all coal-fired power plants are equipped with electrostatic precipitators or bag houses. Of the present coal-fired power plant capacity, only about 25 percent has been built or retrofitted with scrubbers. Less than 25 percent of the coal-fired plant capacity is equipped with SCR systems. However, about 70 percent of the coal-fired U.S. power plant capacity has some primary NOx control such as low-NOx burners. Several multi-pollutant flue gas cleanup system pilot plant projects have shown promising results, including the potential for mercury removal.

Much of the present coal-fired power plant fleet, which generates roughly 50 percent of the nation’s electric power, is aging.  Simply replacing old coal-fired power plants with advanced coal-fired power plants could significantly reduce coal consumption, CO2 discharges, and emissions. 

V. Flue Gas Cleanup Systems

The following is a time line of flue gas cleanup improvements that have been implemented over a sixty-year time frame:

1930s: Particulate Removal Systems

1970s: Desulfurization Systems

1980s: Nitrogen Oxide Reduction Systems

1990s: Multi-Pollutant Reduction Systems

Particulate Removal Systems

Particulate removal systems were first introduced to coal-fired power plants in the 1930s. Large pulverized coal-fired power plants are equipped with electrostatic precipitators or baghouses that remove the fine particles of ash entrained in the flue gas from the coal furnace. Ash removal from the flue gas is greater than 99.9 percent. Ash collected in precipitators or baghouses is removed, and either disposed of as waste or transported to cement and other plants that use fly ash.

Desulfurization Systems

Coal contains carbon, hydrogen, ash, sulfur, and other components. Coal combustion produces SO2, which is an air pollutant. In the 1970s, SO2 removal systems (colloquially known as “scrubbers”) began to be added to existing coal-fired power plants in the U.S.  There are two types of scrubbers:  The "wet" lime stone slurry scrubber, usually used with high-sulfur coal, is capable of about 98 percent SO2 removal. The "dry" scrubber (actually a spray dry absorber), usually used with low-sulfur coal, is capable of about 90 percent SO2 removal.  Major design developments since then have resulted in improved reliability, and reduced capital and operating costs.  Emissions of SO2 from current coal-fired plants have been reduced by about one-third since 1970.

Most coal-fired plants either have scrubbers or use coal with a maximum sulfur content of about 1 percent. A large amount of low sulfur coal is available from mines in Colorado, Wyoming, Utah, and Montana.  Improvements in railroad shipping allow for huge, cross-country shipments to locations as far from the source as Georgia.  

Selective Catalytic Reactor Systems for NOx Reduction

Nitrogen Oxides are air pollutants mainly formed by the oxidation of elemental nitrogen during the coal combustion process.  Major improvements to burners and furnace combustion have achieved about a 50 percent reduction in NOx formation compared to coal-fired plant performance about fifteen years ago.

In the 1980s, coal-fired power plants were first equipped with SCR systems in Japan and Europe. The SCR system involves a simple process by which only harmless byproducts are discharged, mainly elemental nitrogen and water.  Since the early 1990s, many U.S. coal-fired power plants have added SCRs, which have reduced NOx emissions from these plants by about 80 percent.

Multi-Pollutant Removal Systems

Besides the already proven technologies of scrubbers and selective catalytic reactors, other cleanup systems have been developed. The latest developments are a number of promising multi-pollutant flue gas cleanup systems. Several pilot plant projects have been started and have shown promising results. One system, for example, has shown operational results with a high effectiveness of removing not only SO2 and NOx, but also some mercury.

VI. Long Term Domestic Fuel Resources in the U.S.

Most electric power generation in the United States involves the use of fossil fuels, primarily coal (~50 percent), natural gas (~18 percent), and oil (~3 percent).  Nuclear power (~20 percent) and renewable energy, chiefly hydropower (~7 percent), also are major electric energy sources.

Coal is the most abundant fossil fuel on earth. Roughly 67 percent of the recoverable fossil fuel reserves worldwide are coal, followed by 19 percent for oil and 14 percent for natural gas. In the U.S., coal accounts for about 95 percent of the recoverable fossil fuel reserves.  Coal reserves in the U.S. constitute approximately 30 percent of all the coal reserves worldwide.  The National Mining Association estimates that U.S. coal reserves equal approximately 275 billion tons, which at current recovery and usage rates will last about 200 years.  Our goal should be the most effective and clean use of this domestic energy resource, reducing our reliance on fuel imports.

Uranium for use in nuclear power generation is available for hundreds of years, assuming the use of breeder reactors and fuel reprocessing.  The United States possesses about 13 percent of the worldwide natural uranium reserves.

A sharp spike in the number of natural gas-fired power plants began operating in the late 1990s, a result of low emissions, reasonable price, and regulatory uncertainty that inhibited the use of coal. In the past few years, however, supply versus demand has caused the price of natural gas to more than double.  Worldwide, the natural gas reserves account for about 14 percent of the recoverable fossil fuels.  U.S. supplies, however, account for less than 3 percent of the known recoverable fossil fuel resources.  A further increase of the natural gas-fired power plant fleet is uncertain because of supply concerns.  Liquified natural gas (LNG) supplies, obtained from international suppliers, are likely to increase, but safety, security, and environmental issues can complicate permitting of LNG shipping and terminals.

Renewable fuel resources, such as solar and wind are limited by high costs and an inability to provide baseload (24/7) power.  Hydropower is the most prevalent renewable energy supply, providing about 7 percent of the nation’s total electricity supply.  Wind power has some potential in the U.S., with cost subsidies.

Oil reserves worldwide account for about 19 percent of the total recoverable fossil fuel reserves. However, in the U.S., oil reserves are less than 3 percent of the total fossil fuel reserve.  Oil in the United States is primarily used for transportation; only 3 percent of the nation’s electricity supply is fueled by oil.

Based on the availability of domestic fuel for long term power generation in the U.S. the conclusion must be drawn that nuclear fuel and coal should be used.  Renewable energy sources are not consistently available as a full time source of power and renewable energy facilities cannot economically replace the present coal-fired and nuclear power plants. Overall, the increasing demand for base load electric power can be satisfied by building mainly new coal-fired and nuclear power plants.

VII. Permitting Obstacles

Permitting a new coal-fired electric generating unit is complicated, expensive, time consuming, and financially risky. The number of required permits varies, but typically, over 50 permits are required, including air emissions, water consumption and discharge, waste disposal, road access, and transmission lines. However, usually, the most demanding permitting task involves the New Source Review (NSR) air permit. A NSR air permit must be secured prior to beginning construction of a new unit.

Plant construction cannot begin until this key permit is obtained. The developer of a new coal-fired unit must prepare and submit a permit application that addresses all the essential elements of the applicable NSR permitting requirements. The NSR permit has detailed requirements that generally include:

Preliminary engineering to define plant performance and design to support the permit submittals.
 
A comprehensive analysis of the available coal boiler emission control technologies.
  
Detailed computer ambient air impact modeling to demonstrate that the project will not cause or contribute to a violation of a national ambient air quality standard.

Preparation of the permit application and supporting reports.

Responses to state and federal agencies questions.

Participation in public meetings, including presentation of expert testimony.

In addition, environmental activists and other groups often file legal challenges, either during the permit review process or after this key permit is issued, that contest the state or federal agency action or the plant developer's proposed design, which the plant developer must settle in court. These legal challenges are often directed at the plant emissions being higher than the permitting requirements for "Best Available Control Technology (BACT)" or "Lowest Achievable Emission Rate (LAER)." These permitting requirements are not specific values, but are concepts that are open to debate. As a result, complicated technical, legal, political, and other issues are raised that extend the permitting, agency review, public hearings, and legal process.

Recently, a minimum of about 24 months was required by one project to obtain these permits, but another project is still pursuing the needed permits after 36 months. The expense for the NSR varies considerably, but ranges between $15 million and $30 million. The extended time required for the NSR and other permits, and the associated large permitting expense, represents a major financial risk to building new highly efficient coal-fired power plants.

The main air permitting activities are briefly described as follows:

Air Permitting Overview

The pre-construction air emission permitting process is called New Source Review, and is required whether the coal-fired unit will be located in an attainment area, i.e., an area that complies with the national ambient air quality standards, or a non-attainment area (NAA). A new coal-fired unit located in an attainment area will be subject to the prevention of significant air quality deterioration (PSD) requirements, while a new unit located in a non-attainment area will be subject to the NAA New Source Review requirements.

The PSD permitting process requires a comprehensive evaluation of potential emission control technologies as well as an evaluation of the project's potential impact on the surrounding ambient air. To obtain a PSD permit, the applicant must:
 
 1. apply the BACT;
 
 2. evaluate potential ambient air quality impacts;

 3. not adversely impact a Class I area; and

 4.  undergo adequate public participation.

Non-Attainment area pre-construction review requirements are similar to the PSD requirements, except: (1) the emissions control requirement is the LAER; (2) the applicant must obtain emission offsets from other sources impacting the same area; and (3) the applicant must certify that all other sources owned by the applicant in the State are complying with all applicable requirements of the Clean Air Act (CAA).

The developer of a new coal-fired plant must submit to the appropriate permitting authority a NSR pre-construction permit application that includes a detailed description of the proposed project and addresses all the essential elements of the PSD or NAA permitting requirements. The application will be scrutinized by the permitting agency, and will form the basis for emissions limits included in the facility's draft permit. Once a draft permit is issued, the permit application will be available for public review and comment.

In general, the permitting authority issuing a NSR permit is required to provide adequate documentation of its determinations, and to make a reasoned decision based on a comprehensive review of the available technical information. Incomplete permit applications can prompt agency questions and can trigger lengthy agency reviews, as well as increase the number of issues potentially subject to challenge and review.

Any new major stationary source subject to PSD must conduct a BACT analysis. The BACT analysis is one of the most important parts of the applicant's PSD permit application, and is subject to careful review and scrutiny by the permitting agency and the public. It is imperative that the permit application includes a comprehensive analysis of the potentially applicable control technologies and a thorough site-specific evaluation of the technical feasibility and effectiveness of each control system.

The BACT is defined as an emission limitation based on the maximum degree of reduction of each pollutant subject to regulation, which the permitting authority determines is achievable for such facility, including fuel cleaning, clean fuels, or treatment or innovative fuel combustion techniques for control of each such pollutant.

The definition of BACT clearly requires a comprehensive review of pollution control technologies, but neither the statute, nor regulations developed to implement the statute, specifies how BACT should be determined. Rather, the BACT process has been developed through EPA guidance documents and case-by-case reviews.

In order to provide applicants and permitting agencies a consistent basis upon which to prepare and evaluate BACT determinations, EPA published the New Source Review Workshop Manual ("NSR Manual"). The NSR Manual describes in detail EPA's "top-down" process for determining BACT under the PSD provisions.  The PSD applicant first examines the most stringent alternative, and that alternative is established as BACT unless the applicant can demonstrate, and the permitting authority in its informed judgment agrees, that technical considerations, or energy, environmental, or economic impacts, justify a conclusion that the most stringent technology is not achievable in that case.

Although the BACT process described in the NSR Manual is not a mandatory methodology or binding regulation, it remains the primary guidance document for           anyone preparing a BACT analysis. Using the top-down approach will help the applicant identify potential control technologies and ensure that the applicant thoroughly
evaluates the technical and economic feasibility of potential control options.  More importantly, a top-down BACT approach will help build an extensive administrative record and should yield a defensible BACT determination.

In general, a top-down BACT analysis involves the following steps for each pollutant:

1. Identify all potential control technologies;

2. Eliminate technically infeasible control options;

3. Rank the remaining control technologies by control effectiveness;

4. Evaluate the control technologies, starting with the most effective for     economic impacts, energy impacts, and environmental impacts;

 5.    Select the BACT

The BACT analysis is a critical component of any permit application because the BACT analysis forms the basis for control technology selection, modeling inputs, and emission limits.  Objections to proposed coal-fired plants often focus on the adequacy of the BACT analysis.

VIII. Clean Coal Technology Development

The Department of Energy's Office of Fossil Energy, in partnership with the coal and power industries, has been developing and implementing advanced technologies to ensure continued low-cost, clean energy for the nation. Fossil Energy's Coal Power Research, Development, and Demonstration (RD&D) Program integrates core R&D technology development activities (e.g., advanced gasification, fuel cell and fuel cell/turbine hybrids, innovations for existing plants, carbon capture and sequestration, advanced materials research, oxygen and hydrogen production) with larger scale activities such as the Clean Coal Power Initiative and FutureGen to develop clean coal technology for widespread commercial use.

The DOE Clean Coal Technology Roadmap, developed as a joint project of DOE, the Electric Power Research Institute (EPRI), and the Coal Utilization Research Council (CURC) was completed in 2003.  It defines specific technology performance targets for future energy plants that use coal to produce electricity and, when economically feasible, transportation fuels and other valuable products.  Private and public sector technology research and development is focused on both the existing fleet of coal-fired power plants and future near-zero emission plants.  Performance targets for these plants were cooperatively developed by DOE’s National Energy Technology Laboratory, CURC, and EPRI.

There are many candidate approaches to meeting the long-term need for near zero-emission coal plants.  Innovative combustion technology can use oxygen combustion processes to better enable the capture of CO2.  Coal gasification allows for the production of multiple products such as electricity and transportation fuels and allows feedstock flexibility.  Hybrid concepts such as combined combustion and gasification, or power generation components such as fuel cells and combustion turbines, can achieve high system efficiencies. Environmental performance targets for new coal-fired plants have been established for 2010 and 2020. Economic performance targets are also defined. The Roadmap allows for the development of a portfolio of technologies to meet the range of applications, and anticipates constraints for future U.S. energy systems.

IX. Infrastructure, Coal Mining and Transportation, Electric Transmission

Coal is the most abundant economical domestic energy resource for U.S. electric power generation - sufficient for hundreds of years.  The U.S. exports coal, while importing other fossil fuels.  Coal is relatively inexpensive to mine and transport by rail to U.S. electric generating plants.

The coal mining and rail transport systems have been expanded as needed for more than a century and cover the lower 48 states.  For new coal-fired power plants, a modest expansion of this infrastructure investment will be required. Alternatively, more mine-mouth power plants can be built to provide "coal-by-wire" electric energy, requiring additional high voltage transmission lines.

The lower 48 states of the U.S. include 3 independent electric transmission systems - Texas, western U.S., and eastern U.S.  These systems are among the highest reliability systems in the world.  Since the three systems are not synchronized with each other, transfer of energy between systems is accomplished on a small scale by AC to DC to AC transformation.  The addition of new power generating plants in each system requires additional transmission capacity at high voltage to maintain the high reliability we require and to minimize energy loss.  The transmission infrastructure has been developed over the past century and can be expanded economically by adding more lines and/or by increasing transmission voltage of existing lines in many areas. Reliability improvement is a continuing goal.

X. Financing and Risks

Coal fired power plants require investors and lenders to commit to financing projects with investment recovery times of up to 40 years.  In addition, there are long lead times for permitting and construction before the plants begin production.  For financing to be obtained at competitive rates over these timeframes the outlook for the marketing of the output and the operational constraints must be fairly stable. The public policy environment has much to do with the stability of both fuel and operating costs over the life of the plant and can affect the financing costs dramatically.

The risks inherent in developing each project of this magnitude include competitive threats from new generation technologies or distributed generation, discovery of additional environmental hazards from coal generation requiring costly additional equipment, and a potential for a drastic drop in demand due to more efficient technologies being applied to end user applications (lighting, motors, etc.).  Analyzing and developing a business case for a coal-fired plant requires predicting many factors farther into the future than the normal investment recovery period.  Fuel costs and availability must be projected forward over the life of the plant.  Doing this requires predicting whether alternate technologies could affect the fuel supply, predicting the environmental effects of the fuel, and predicting the political and social climate for the years ahead.

Alternate technologies could affect the fuel supply either by making it easier and cheaper to mine the fuel or conversely, by diverting the present supply to other uses such as through gasification or conversion to liquid fuel.  The laws of supply and demand would obviously cause price movement to occur.

Permitting and site selection need to be approached in a rational way.  The current process requires the project developer to coordinate between the various governmental agencies that many times have conflicting requirements. The time required for this delays construction and therefore inflates the cost of the plant.

Changing environmental regulations affect the long-term viability of coal-fired power projects.  While recognizing the legitimate environmental risks associated with coal, the regulations and requirements for coal fired plants need to be well defined.  Determining the required flue gas emission reduction technologies to be used and then allowing the plant to operate for enough time to recover the costs associated with installation and use of the technologies should be a commitment at the time the operating permit is issued.  If new emission regulations are applied after the operating permit is issued, a shorter period of cost recovery should be considered.

In addition, requiring plants to change technologies or add additional equipment needs a systematic approach, preferably with an economic analysis and survey of benefits.  These changes need to be applied across the board so that there is a level playing field for generators if competitive markets are to develop.

Financing coal-fired projects requires that the markets perceive a risk commensurate with return.  At about $1500/kw capacity, these projects can range from $450,000,000 for a 300 MW unit to over a billion dollars for a 700 MW unit.  An investment of this magnitude for a time frame of 40 years requires that investors perceive a stable and rational atmosphere and have confidence in legislators and administrative rule makers.  Much can be done to improve the atmosphere so that development of coal-fired plants is encouraged while having a minimal effect on the environment through the encouragement of rational rule making and government controls. Tax credits for new plants, especially for the environmental equipment, are needed. 

Ways to reduce the financing risk include implementation of tax credits for generation that meets a minimum efficiency criteria and cleanliness criteria for key pollutants.  In addition, relief from future unknown costs for environmental regulations changes can be given through tax credits or accelerated depreciation.  Active measures need to be taken to keep coal generation viable by keeping the financial risk at levels similar to other business investments.

XI. Public and Media Acceptance

Much of the public perceives coal-fired plants as polluting blights on the landscape.  This reputation is somewhat derived from the methods of operation of these plants prior to the implementation of the Clean Air Act.  Coal-fired generation is sometimes portrayed as a high polluting process that can be replaced with non-polluting renewable technologies within a short time span.  Considering that coal currently makes up 50 percent of the generating capacity of the United States, that is unlikely. Considering the huge United States coal reserves, it would be a strategic error to avoid using coal for new electrical generation. 

The main points of contention with coal-fired plants are the emissions and the ancillary effects of the process such as fly ash disposal and the environmental effects of coal mining. Much has been learned in the last 20 years about ways to deal with these issues in an environmentally sound manner. New, more efficient power plants produce fewer emissions per kWh generated, making their construction more attractive.

Public perception of new coal-fired plants can be changed through education.  Highly efficient plants with best available pollution control technology will reduce existing pollution levels by burning less coal per megawatt-hour produced, capturing most of the pollutants prior to release, while allowing additional capacity to be added in a timely manner. A purposeful program to educate the public on the true benefits of coal generation is essential and should be performed by the power industry with the support of government.

XII. Conclusions

The Energy Committee of the ASME's Council on Engineering and ASME's Power Division strongly support the construction of new coal-fired power plants in the U.S. to meet the need for growing base-load demand, to ensure a diversity of base-load power supplies, to ease increasing reliance on natural gas to fuel power plants, and to decrease overall pollutant emissions per unit of GDP growth.     

Coal is the most abundant and inexpensive fossil fuel energy resource in the U.S. for the next century and it is the only competitor for nuclear power for base-load (24/7) power generation, if oil and natural gas prices remain at or above current levels.  The technology and infrastructure is proven and available.       

The economic competitiveness of the nation requires low cost, reliable electric power.  Fuel supply security and a desire to reduce our reliance on imported fuels suggest that it would be prudent to utilize our domestic resources of coal and uranium for the foreseeable future.  Hydropower and other renewable energy sources will continue to provide niche energy applications. 

New base-load electric power generating plants are needed to meet the demand for capacity growth and GDP growth - and to replace aging, inefficient plants.  Clean coal technologies and more efficient energy conversion cycles are now available for use in economical and reliable coal-fired plants.  This will significantly reduce overall emissions of SO2, NOx, and particulate pollution, and the emissions of CO2 per unit of GDP.  In the event that global warming requires total CO2 emissions elimination, all fossil fuel combustion would be phased out for power generation and for vehicle transportation.  However, persuasive evidence for this drastic step is lacking.

Additional technologies, currently in the development stage, should reduce CO2 emissions even more and the development of these technologies should be supported as a matter of public policy.       
 
In summary, the low cost of coal, its abundance in the United States, proven technologies, and existing infrastructure, make the use of coal for power generation a strategic imperative.

This position statement represents the considered views of the Energy Committee and the Power Division of ASME's Council on Engineering, and does not necessarily reflect the views of ASME as a whole.

ASME International is a non-profit technical and educational organization with 125,000 members worldwide. The Society's members work in all sectors, including industry, education, and government. This statement represents the views of the Energy Committee of the ASME Council on Engineering, and is not necessarily a position of ASME as a whole.