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State Incentives for Development of Clean Coal Facilities


Idaho has adopted a moratorium on the construction of new coal fired power ... However, this moratorium does NOT apply to IGCC facilities. Illinois. Coal ... – PowerPoint PPT presentation

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Title: State Incentives for Development of Clean Coal Facilities

State Incentives for Development of Clean Coal
  • Karen R. Obenshain, Sc.D.
  • National Association of
  • Regulatory Utility Commissioners
  • Staff Subcommittee on Accounting and Finance
  • April 23, 2007

Fuel Diversity and Innovative Technologies are
  • Meet future energy demand
  • Provide affordable, reliable energy
  • Establish energy security
  • Generate energy efficiently with minimal
    environmental impact

Why Coal?
  • Accounted for 50 percent of all electricity
    generated in the United States
  • Sufficient domestic reserves for at least 150
  • Innovative technology development has made clean
    coal power a reality
  • Future issues CO2 emissions

What are Clean Coal Technologies?
  • Combustion Pulverized Coal (PC)
  • Supercritical
  • Ultra-supercritical
  • Circulating fluidized bed
  • Gasification
  • Integrated Gasification Combined Cycle

DOE-NETL Database
  • 159 new coal-fired power plants
  • 45 propose to use advanced technologies
  • 22 circulating fluidized bed units
  • 14 supercritical units
  • 4 ultra-supercritical units
  • 32 IGCC
  • DOE-NETL 1/24/2007

  • New crop using steam at temperatures of 600 to
    605 C (1110 1120 F) and sliding pressure
  • In some cases, the reheater steam temperatures
    are as high as 1135 F
  • Current bids to suppliers requesting steam
    temperature capabilities between 1100 1115 F

  • DOE USC defined 1400 F and 5500 psig
  • EU USC (Thermie) defined 1292 F and 4500 psig
  • Need to move to nickel-based materials due to
    high temperatures and pressures

Circulating Fluidized Bed
  • Coal is burned on upward-blowing jets of air
    during combustion at such a velocity that the
    gases and solids produce a bubbling mixture.
  • The fluidizing action promotes complete coal
    combustion at relatively low temperatures, and
    provides a means to transfer combustion heat
    efficiently from the bed to the steam tubes.
  • This technology eliminates the need for external
    pollution controls, such as scrubbers (a scrubber
    is a device that uses a liquid spray to remove
    aerosol and gaseous pollutants from the air
  • Largest existing CFB is around 500 MW.

  • Gasification is the best way to use a gas turbine
    with a coal feedstock
  • Gas turbine combined with a steam turbine high
    efficiency and reduced emissions
  • Reduces all criteria pollutants as well as
  • Lends itself better to CO2 capture and
    sequestration technology development than
    pulverized coal
  • Currently works best with high quality coals
    (anthracite and bituminous)

Non-technology Challenges
  • Financing
  • Cost recovery
  • Environmental groups opposition
  • State regulators opposition
  • Labor and material shortages
  • Permitting and siting

State Incentives for Clean Coal
  • States with incentives for Clean Coal
  • AK, CO, ID, IL, IN, KY, MN, NY, ND, OH, OK, PA,
    RI, TX, VA, WV, WY
  • States with specific incentives for IGCC
  • CO, IL, IN, KS, MN, OH, PA, TX, WY
  • Considering action KY, MS, NM, VA, WV

  • Alaska Industrial Development and Export
    Authority (AIDEA)
  • Provides bond financing to a plant or facility
    demonstrating technological advances of new
    methods and procedures and prototype, commercial
    applications for the exploration, development,
    production, transportation, conversion and use of
    energy resources.
  • Projects must be able to demonstrate that they
    will be able to produce adequate revenues to
    repay the bonds

  • Incentives for construction of IGCC
  • Must use CO or other western coal
  • Must demonstrate carbon capture and sequestration
    for a portion of the CO2 emissions
  • May not exceed 350 MW without a finding from CPUC
  • Incentives include waivers of CPUCc
    certificate of public convenience and necessity
    full cost recovery from customers recovery of
    additional costs waiver of CPUC rules on
    requiring competitive resource acquisition

  • Idaho has adopted a moratorium on the
    construction of new coal fired power plants
    effective until April 2008. However, this
    moratorium does NOT apply to IGCC facilities.

  • Coal Revival Program
  • High Impact Business Program Property Tax
  • Long-Term Contracting
  • Illinois DCEO Coal Grant Programs

  • Tax credits for IGCC facilities 10 of the
    first 500 M plus 5 of any investment lt 500 M
  • Financial incentives for clean coal and energy
    projects generation, transmission, renewables

  • Tax credits for the development of new coal
    gasification facilities

  • Tax credits for clean coal facilities - 2 per
    ton KY coal
  • Does not specify technology type

  • Provided an annual grant of 2 million for 5
    years to the Mesaba Energy IGCC plant
  • No incentives for other clean coal plants

New York
  • Advanced Clean Coal Power Plant Initiative
    (ACCPPI) goal is to build one or more clean
    coal power plants within NY
  • New York Power Authority (NYPA) will agree to
    purchase power
  • NYPA may become a minority share partner
  • NYPA will establish a Clean Coal Initiative (50
    M) to implement carbon sequestration technology
    when it becomes available
  • Tax exempt bonding up to 200 M per year (cap
    1 B)

North Dakota
  • 20 of funds in coal development impact trust
    fund may be appropriated to clean coal
    demonstration projects
  • New plants are eligible for a tax deduction 1
    of total wages and salaries paid in the state for
    the first three years ½ for the fourth and
    fifth years
  • Investments in new power plant exempted from
    states 5 sales and use tax

  • Ohio Coal Development Office (OCDO) awards
    funds to coal RD for use of high-sulfur Ohio
  • Incentives grants, loans, and loan guarantees

  • Offers coal-fired electric generation facilities
    a tax credit of 5 per ton of Oklahoma-mined coal

  • Energy Deployment for a Growing Economy (EDGE)
    offers incentives for IGCC technology
  • A one-time option of allowing older facilities to
    continue using coal without updated air pollution
    controls if the utility agrees to replace the
    plant with an IGCC facility by 2013

Rhode Island
  • Law directs states energy facilities siting
    board to give priority to projects based on eight
    criteria, once of which is the use of coal
    processed by clean coal technology
  • Clean coal technology is defined as a
    technology developed in the DOE clean coal
    technology program and shown to produce emissions
    levels substantiailly equal to those of natural
    gas fired power plants

  • 22 million in grant funds for clean coal and
    gasification projects
  • Funded the site screening process for possible
    FutureGen plants and allows expedited permitting
    for projects that are related to the construction
    of a FutureGen component
  • Under the Water Code, the state assumes liability
    of CO2 captured and stored from a clean coal
    project. Clean coal project is defined as the
    construction of electric generating, steam
    production, or industrial production facilities,
    the modification of existing facilities, or other
    projects that install technology, including
    gasification, designed to utilize coal while
    reducing emissions of air contaminants. 

  • Permit application priority for clean coal
  • Clean coal project is any project that uses any
    technology, including technologies applied at the
    precombustion, combustion or postcombustion
    stage, at a new or existing facility that will
    achieve significant reductions in air emissions
    of CO2 or NOx associated with the utilization of
    coal in the generation of electricity, process
    steam or industrial products, which is not in
    widespread use

West Virginia
  • The West Virginia PSC has the authority to
    authorize rate-making allowances for electric
    utility investment in clean coal technologies

  • Legislation creating a sales and use tax
    exemption for new goal gasification or coal
    liquefaction facilities and the equipment used to
    construct a new facility or make it operational

  • Karen R. Obenshain
  • (202) 508-5223