Coal Power Plants: Opportunities Exist for DOE to Provide Better Information on the Maturity of Key Technologies to Reduce Carbon Dioxide Emissions
Published: 2010-06-16T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Coal power plants generate about half of the United States' electricity and are expected to remain a key energy source. Coal power plants also account for about one-third of the nation's emissions of carbon dioxide (CO2 ), the primary greenhouse gas that experts believe contributes to climate change. Current regulatory efforts and proposed legislation that seek to reduce CO2 emissions could affect coal power plants. Two key technologies show potential for reducing CO2 emissions: (1) carbon capture and storage (CCS), which involves capturing and storing CO2 in geologic formations, and (2) plant efficiency improvements that allow plants to use less coal. The Department of Energy (DOE) plays a key role in accelerating the commercial availability of these technologies and devoted more than $600 million to them in fiscal year 2009. Congress asked GAO to examine (1) the maturity of these technologies; (2) their potential for commercial use, and any challenges to their use; and (3) possible implications of deploying these technologies. To conduct this work, GAO reviewed reports and interviewed stakeholders with expertise in coal technologies.
section_title: What GAO Found
paragraphs: DOE does not systematically assess the maturity of key coal technologies, but GAO found consensus among stakeholders that CCS is less mature than efficiency technologies. Specifically, DOE does not use a standard set of benchmarks or terms to describe the maturity of technologies, limiting its ability to provide key information to Congress, utilities, and other stakeholders. This lack of information limits congressional oversight of DOE's expenditures on these efforts, and it hampers policymakers' efforts to gauge the maturity of these technologies as they consider climate change policies. In the absence of this information from DOE, GAO interviewed stakeholders with expertise in CCS or efficiency technologies to identify their views on the maturity of these technologies. Stakeholders told GAO that while components of CCS have been used commercially in other industries, their application remains at a small scale in coal power plants, with only one fully integrated CCS project operating at a coal plant. Efficiency technologies, on the other hand, are in wider commercial use. Commercial deployment of CCS is possible within 10 to 15 years while many efficiency technologies have been used and are available for use now. Use of both technologies is, however, contingent on overcoming a variety of economic, technical, and legal challenges. In particular, with respect to CCS, stakeholders highlighted the large costs to install and operate current CCS technologies, the fact that large scale demonstration of CCS is needed in coal plants, and the lack of a national carbon policy to reduce CO2 emissions or a legal framework to govern liability for the permanent storage of large amounts of CO2. With respect to efficiency improvements, stakeholders highlighted the high cost to build or upgrade such coal plants, the fact that some upgrades require highly technical materials, and plant operators' concerns that changes to the existing fleet of coal power plants could trigger additional regulatory requirements. CCS technologies offer more potential to reduce CO2 emissions than efficiency improvements alone, and both could raise electricity costs and have other effects. According to reports and stakeholders, the successful deployment of CCS technologies is critical to meeting the ambitious emissions reductions that are currently being considered in the United States while retaining coal as a fuel source. Most stakeholders told GAO that CCS would increase electricity costs, and some reports estimate that current CCS technologies would increase electricity costs by about 30 to 80 percent at plants using these technologies. DOE has also reported that CCS could increase water consumption at power plants. Efficiency improvements offer more potential for near term reductions in CO2 emissions, but they cannot reduce CO2 emissions from a coal plant to the same extent as CCS.
section_title: What GAO Recommends
paragraphs: GAO recommends that DOE develop a standard set of benchmarks to gauge and report to Congress on the maturity of key technologies. In commenting on a draft of this report, DOE concurred with our recommendation.

section_title: Letter
paragraphs: Coal power plants generate about half of the United States’ electricity and  are expected to continue supplying a large portion of the nation’s  electricity in the future. According to the Department of Energy’s (DOE)  Energy Information Administration (EIA), coal will provide 44 percent of  the electricity in 2035 in the United States. The critical role that coal plays  in supplying electricity is due in part to the large coal reserves in the  United States, which some estimate will last about 240 years at current  consumption levels, and the relatively low cost of this energy supply.  However, coal power plants also currently account for about one-third of  the nation’s emissions of carbon dioxide (CO), the most prevalent  greenhouse gas. Concerns over rising greenhouse gas emissions and their  potential effects on the climate have led some countries to adopt or  consider adopting policies to reduce these emissions. In the United States  and elsewhere, these concerns have also increased focus on developing  and using technologies to limit CO emissions from  coal plants: carbon capture and storage (CCS) and efficiency technologies.  CCS technologies separate and capture CO—post-combustion, pre-combustion,  and oxy-combustion. Post-combustion capture involves capturing COPre-combustion capture involves capturing CO produced when gasifying  coal at Integrated Gasification Combined Cycle (IGCC) plants, which are  in limited use in the electricity industry. Oxy-combustion capture involves  capturing CO Efficiency upgrades can also be made in existing coal plants, such  as overhauling or replacing turbine fan blades. Improving the efficiency of  coal plants allows them to use less coal per unit of electricity produced  and achieve a corresponding reduction in CO emissions could affect coal power plants. The  Environmental Protection Agency (EPA) has taken steps to regulate  greenhouse gas emissions under the Clean Air Act and plans to begin  regulating emissions from certain stationary sources, including coal power  plants, beginning in 2011. As part of this effort, EPA is compiling technical  and background information on potential control technologies and  measures, such as CCS, and developing policy guidance to assist  permitting agencies in determining the best available control technology  for greenhouse gas emissions. In addition, the American Clean Energy and  Security Act passed the House of Representatives on June 26, 2009, and  would require an 83 percent reduction in greenhouse gas emissions from  2005 levels by 2050. Among other things, this proposed legislation would  create a cap and trade program, a market-based mechanism to establish a  price for emissions of greenhouse gases, and require additional specific  actions to reduce these emissions. For example, section 116 of the bill  would require new coal power plants permitted before 2020 to reduce  their CO emissions by half, 4 years after certain CCS deployment criteria  are met or by 2025, whichever comes first.
DOE plays a key role in accelerating the commercial availability of  technologies to reduce CO from coal plants along with other policymakers that are  considering climate change policies. In the near term, according to DOE’s  fiscal year 2011 budget submission, DOE hopes to facilitate the  development of CCS and efficiency technologies, with longer term goals of  improving these technologies so that coal can remain part of the nation’s  fuel mix in generating electricity. In fiscal year 2009, DOE’s coal RD&D  funding was at least $681 million, and $3.4 billion was appropriated in the  American Recovery and Reinvestment Act of 2009 (ARRA) for fossil  energy RD&D.
In this context, you asked us to review key technologies to reduce CO emissions from coal power plants;  (2) the potential for these technologies to be used commercially in the  future, and challenges, if any, to their use; and (3) the possible  implications of deploying these technologies. We briefed your staffs on the  results of our work on June 1, 2010 (see app. I). This report summarizes  and formally transmits the information provided during that briefing. It  incorporates technical and other comments provided by agencies since the  briefing.
To conduct this work, we reviewed key reports including those from  DOE’s national laboratories, the National Academy of Sciences (NAS),  International Energy Agency (IEA), Intergovernmental Panel on Climate  Change (IPCC), Global CCS Institute, the National Coal Council, and  academic reports. We conducted interviews with stakeholders such as  power plant operators, technology vendors, and federal officials from EPA  and DOE along with officials from the North American Electric Reliability  Corporation (NERC). We then selected a group of 19 stakeholders with  expertise in CCS or efficiency technologies to answer a standard set of  questions. This group included those from major utilities that are planning  or implementing projects using key coal technologies, technology vendors  that are developing these technologies, federal officials providing RD&D  funding for these technologies, and researchers from academia and  industry that are researching these technologies. We asked these  stakeholders to describe the maturity of these technologies using a nine  point scale we developed in conjunction with the Electric Power Research  Institute (EPRI) based on the National Aeronautics and Space  Administration’s (NASA) Technology Readiness Levels (TRL). TRLs are a  tool that is used by NASA and other agencies to rate the extent to which  technologies have been demonstrated to work as intended. We also  reviewed available data on the use of key coal technologies compiled by  IEA and the Global CCS Institute.
To identify the potential for these technologies to be used commercially in  the future along with any associated challenges or implications, we  reviewed key reports on CCS and efficiency technologies and examined  goals set out by DOE, IEA, and electricity industry groups for deploying  these technologies. We also asked our 19 stakeholders with expertise in  CCS or efficiency technologies for their views on the potential challenges  and implications of using these technologies. Finally, we visited coal  power plants and research facilities in three states––Alabama, Maryland,  and West Virginia––that we selected because they contained projects  involving advanced coal technologies. Importantly, our discussion focuses  on the technological maturity of these technologies. TRLs describe the  level of demonstration achieved for particular technologies, but they do  not provide information on other factors that play a critical role in  decisions to deploy them, such as their cost, availability of financing, and  applicable regulations. Technological improvements could help these  technologies overcome some challenges or potential negative  implications. For example, novel approaches to CO capture could help to  lower the cost of using these technologies.
We conducted this performance audit from July 2009 through May 2010 in  accordance with generally accepted government auditing standards. Those  standards require that we plan and perform the audit to obtain sufficient,  appropriate evidence to provide a reasonable basis for our findings and  conclusions based on our audit objectives. We believe that the evidence  obtained provides a reasonable basis for our findings and conclusions  based on our audit objectives. A more detailed description of our scope  and methodology is presented in appendix II.
subsections: section_title: Although DOE Does Not Systematically Assess the Maturity of Key Coal Technologies, Consensus among Stakeholders Is That CCS Is Less Mature Than Efficiency Technologies
paragraphs: DOE’s Office of Fossil Energy oversees research on key coal technologies,  but DOE does not systematically assess the maturity of those  technologies. Using TRLs we developed for these technologies, we found  consensus among stakeholders that CCS is less mature than efficiency  technologies.
subsections: section_title: DOE Does Not Systematically Assess the Maturity of Key Coal Technologies
paragraphs: Although federal standards for internal control require agency managers to  compare actual program performance to planned or expected results and  analyze significant differences, we found that DOE’s Office of Fossil  Energy does not systematically assess the maturity of key coal  technologies as they progress toward commercialization. While DOE  officials reported that individual programs are aware of the maturity of  technologies and DOE publishes reports that assess the technical and  economic feasibility of advanced coal technologies, we found that the  Office of Fossil Energy does not use a standard set of benchmarks or  terms to describe or report on the maturity of technologies. In addition,  DOE’s goals for advancing these technologies sometimes use terms that  are not well defined. The lack of such benchmarks or an assessment of the  maturity of key coal technologies and whether they are achieving planned  or desired results limits:    DOE’s ability to provide a clear picture of the maturity of these  technologies to policymakers, utilities officials, and others;   congressional and other oversight of the hundreds of millions of dollars  DOE is spending on these technologies; and   policymakers’ ability to assess the maturity of CCS and the resources that  might be needed to achieve commercial deployment.
Other agencies similarly charged with developing technologies, such as  NASA and the Department of Defense (DOD), use TRLs to characterize the  maturity of technologies. Table 1 shows a description of TRLs used by  NASA.
DOE has acknowledged that TRLs can play a key role in assessing the  maturity of technologies during the contracting process. The agency  recently issued a Technology Readiness Assessment Guide, which lays out  three key steps to conducting technology readiness assessments during  the contracting process.
Identify critical technology elements that are essential to the successful  operation of the facility.
Assess maturity of these critical technologies using TRLs.
Develop a technology maturity plan which identifies activities required to  bring technology to desired TRL level.
Although use of the Guide is not mandatory, DOE’s Office of  Environmental Management uses the Guide as part of managing its  procurement activities––a result of a GAO recommendation––and its  Office of Nuclear Energy has begun using TRLs to measure and  communicate risks associated with using critical technologies in a novel  way. Furthermore, the National Nuclear Security Administration has  used TRLs recently as well.
section_title: Consensus among Key Stakeholders Is That CCS Is Less Mature than Efficiency Technologies
paragraphs: In the absence of an assessment from DOE, we asked stakeholders to  gauge the maturity of coal technologies using a scale we developed based  on TRLs. Table 2 shows the TRLs we developed for coal technologies by  adapting the NASA TRLs. for EOR use. However, this plant does not produce electricity. plants have already been demonstrated commercially. For example, a  number of ultrasupercritical plants ranging from 600 to more than 1,000  MW have been built or are under construction in Europe and Asia, and  there are five IGCC plants in operation around the world, including two in  the United States.
section_title: Commercial Deployment of Key Coal Technologies Is Possible, but Contingent on Overcoming Economic, Technical, and Legal Challenges
paragraphs: Commercial deployment of CCS within 10 to 15 years is possible according  to DOE and other stakeholders, but is contingent on overcoming a variety  of economic, technical, and legal challenges. Many technologies to  improve plant efficiency have been used and are available for commercial  use now, but still face challenges.
subsections: section_title: Commercial Deployment of CCS Is Possible within 10 to 15 Years, but Faces Major Challenges According to Reports and Stakeholders
paragraphs: injection wells can be permitted  as Class I (injections of hazardous wastes, industrial nonhazardous wastes, municipal  wastewater) or Class V wells (injections not included in other classes, including wells used  in experimental technologies such as pilot CO for geologic sequestration. endangerment of underground sources of drinking water until the operator  meets all the closure and post-closure requirements and EPA approves site  closure of the well. According to EPA, once site closure is approved, well  operators will only be liable under the SDWA if they violate or fail to  comply with EPA orders in situations where an imminent and substantial  endangerment to health is posed by a contaminant that is in or likely to  enter an underground source of drinking water. EPA plans to finalize the  geologic sequestration rule in fall 2010. Neither the proposed rule nor the  final rule will address liability for unintended releases of stored CO emissions in lieu of more efficient coal plants.
In addition, some higher efficiency plant designs also face technical  challenges in that they require more advanced materials than are currently  available. For example, “advanced” ultrasupercritical plants require  development of metal alloys to withstand steam temperatures that could  be 300 to 500 degrees Fahrenheit higher than today’s ultrasupercritical  plants according to DOE. From a legal perspective, most stakeholders  reported that making efficiency upgrades to the existing fleet of coal  power plants was limited by the prospect of triggering the Clean Air Act’s  New Source Review (NSR) requirements––additional requirements that  may apply when a plant makes a major modification, a physical or  operational change that would result in a significant net increase in  emissions.
section_title: CCS Offers More Potential to Reduce CO
paragraphs: emissions than  efficiency improvements alone but could raise electricity costs, increase  demand for water, and could affect the ability of individual plants to  operate reliably. Technologies to improve plant efficiency offer potential  near-term reductions, but also raise some concerns.
subsections: section_title: CCS Could Help Meet Emissions Limits but Raises Key Concerns
paragraphs: According to key reports and stakeholders, the successful deployment of  CCS technologies is critical to helping the United States meet potential  limits in greenhouse gas emissions. In addition, CCS could allow coal to  remain part of the nation’s diverse fuel mix. IEA estimated that CCS  technologies could meet 20 percent of reductions needed to reduce global  CO This report also noted that the cost of  meeting this goal would increase if CCS was not deployed. Massachusetts  Institute of Technology (MIT) researchers called CCS the “critical enabling  technology” to reduce CO emissions while allowing continued use of coal  in the future. In 2009, NAS reported that if CCS technologies are not  demonstrated commercially in the next decade, the electricity sector could  move more towards using natural gas to meet emissions targets. Our past  work has also found that switching from coal to natural gas can lead to  higher fuel costs and increased exposure to the greater price volatility of  natural gas.
On the other hand, most stakeholders told us that CCS would increase  electricity prices, and key reports raise similar concerns. MIT estimated  that plants with post-combustion capture have 61 percent higher cost of  electricity, and IGCC plants with pre-combustion capture have a 27  percent higher cost compared to plants without these technologies.  Similarly, DOE estimated that plants with post-combustion capture have  83 percent higher cost of electricity, while IGCC plants with pre- combustion capture having a 36 percent higher cost. DOE has also raised  concerns about CCS and water consumption. Specifically, DOE estimated  that post-combustion capture technology could almost double water  consumption at a coal plant, while pre-combustion capture would increase  water use by 73 percent. Some utility officials also said CCS could lead to  a decline in the ability of individual plants to operate reliably because a  power plant might need to shut down if any of the three components  (capture, transport, and storage) of CCS became unavailable. In addition,  more electricity sources would need to make up for the higher parasitic  load associated with CCS. The National Coal Council has also reported  temporary declines in reliability during past deployments of new coal  technologies.
section_title: Plant Efficiency Improvements Offer More Potential for Near-Term Emissions Reductions but Also Raise Concerns
paragraphs: Emission Goals with 21st Century Technologies (Washington, D.C., December 2009).
section_title: Agency Comments and Our Evaluation
paragraphs: We provided a draft of our report to the Secretary of Energy and the  Administrator of  EPA for review and comment. In addition, we provided  selected slides on reliability of electricity supply to NERC for comment.   We received written comments from DOE’s Assistant Secretary of the  Office of Fossil Energy, which are reproduced in appendix III. The  Assistant Secretary concurred with our recommendation, stating that DOE  could improve its process for providing a clearer picture of technology  maturity and that it planned to conduct a formal TRL assessment of coal  technologies in the near future. The Assistant Secretary also provided  technical comments, which we have incorporated as appropriate. In  addition, EPA and NERC provided technical comments, which we have  incorporated as appropriate.
As agreed with your offices, unless you publicly announce the contents of  this report earlier, we plan no further distribution until 30 days from the  report date. At that time, we will send copies of this report to the  appropriate congressional committees, Secretary of Energy, Administrator  of EPA, and other interested parties. In addition, the report will be  available at no charge on GAO’s Web site at http://www.gao.gov.
If you or your staffs have any questions regarding this report, please  contact me at (202) 512-3841 or gaffiganm@gao.gov. Contact points for our  Offices of Congressional Relations and Public Affairs may be found on the  last page of this report. GAO staff who made major contributions to this  report are listed in appendix IV.
section_title: Appendix I: Briefing Slides to Congressional Staff
section_title: Technologies to Reduce Carbon
paragraphs: all U.S. emissions of COCO2 is the most prevalent  greenhouse gas (GHG)
subsections: section_title: Scope and Methodology
subsections: section_title: Scope and Methodology (cont’d)
subsections: section_title: Reviewed DOE budget documents and program goals for its RD&D
paragraphs: program and interviewed senior DOE staff on these Visited coal power plants and research facilities in three selected  states—AL, MD, and WV4 We conducted this performance audit from July 2009 through May  2010, in accordance with generally accepted government auditing  standards.  Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a  reasonable basis for our findings and conclusions based on our  audit objectives.  We believe that the evidence obtained provides a  reasonable basis for our findings and conclusions based on our  audit objectives.
We selected this nonprobability sample of states because they contained projects involving advanced coal technologies.
section_title: Appendix II: Scope and Methodology
paragraphs: To conduct this work, we reviewed key reports including those from the  Department of Energy’s (DOE) national laboratories, the National  Academy of Sciences, International Energy Agency (IEA),  Intergovernmental Panel on Climate Change, Global CCS Institute, the  National Coal Council, and academic reports.
To identify stakeholders’ views on these technologies, we conducted  initial scoping interviews with power plant operators, technology vendors,  and federal officials from the Environmental Protection Agency (EPA) and  DOE. Following this initial round of interviews, we selected a group of 19  stakeholders with expertise in carbon capture and storage (CCS) or  technologies to improve coal plant efficiency and asked them a set of  standard questions. This group of stakeholders included representatives  from major utilities that are planning or implementing projects that use  these technologies, technology vendors that are developing these  technologies, federal officials that are providing research, development,  and demonstration funding for these technologies, and researchers from  academia or industry that are actively researching these technologies.
During these interviews, we asked stakeholders to describe the maturity of  technologies in terms of a scale we developed, based on Technology  Readiness Levels (TRL). TRLs are a tool developed by the National  Aeronautics and Space Administration and used by various federal  agencies to rate the extent to which technologies have been demonstrated  to work as intended using a scale of 1 to 9. In developing TRLs for coal  technologies, we consulted with the Electric Power Research Institute  (EPRI), which had recently used a similar approach to examine the  maturity of coal technologies. Specifically, EPRI developed specific  benchmarks to describe TRLs in the context of a commercial scale coal  power plant. For example, they defined TRL 8 as demonstration at more  than 25 percent the size of a commercial scale plant. We applied these  benchmarks to a commercial scale power plant, which we defined as 500  megawatts (MW) and emitting about 3 millions tons of carbon dioxide  (CO) annually. We based this definition on some of the key reports we  reviewed, which used 500 MW as a standard power plant, and stated that  such a plant would emit about 3 million tons of CO emissions  from a power plant can vary based on a variety of factors, including the  amount of time that a power plant is operated. We also reviewed available  data on the use of key coal technologies compiled by IEA and the Global  CCS Institute.
section_title: Appendix III: Comments from the Department of Energy
paragraphs: The following are GAO’s comments on the Department of Energy’s letter  dated June 4, 2010.
subsections: section_title: GAO Comments
section_title: Appendix IV: GAO Contact and Staff Acknowledgments
subsections: section_title: Staff Acknowledgments
paragraphs: In addition to the contact names above, key contributors to this report  included Jon Ludwigson (Assistant Director), Chloe Brown, Scott  Heacock, Alison O’Neill, Kiki Theodoropoulos, and Jarrod West. Important  assistance was also provided by Chuck Bausell, Nirmal Chaudhary, Cindy  Gilbert, Madhav Panwar, and Jeanette Soares.