Aug 19 - McClatchy-Tribune Regional News - Bruce Henderson The Charlotte Observer, N.C.


Whacked by recession, the vagaries of Congress and an untimely disaster in Tennessee, the coal industry that supplies much of America's electricity is under siege.

In quick succession today, opening speakers at the Coal-Gen industry conference in Charlotte delivered sober messages tempered by can-do optimism. Chief among them: legislation working its way through Congress to cap emissions of carbon dioxide, the greenhouse gas of which coal power is a major source.

If it becomes law, as is widely expected, the historic legislation would force utilities to build cleaner new coal plants that capture and store carbon dioxide with technology that's only now being tested. If the technology fails, or is too expensive, coal could lose ground to nuclear and natural gas-powered plants.

"This shift is going to be a life-changer for all of us," said Lee Lushbaugh, fossil power chief for Bechtel Power Corp., which designs and builds power plants.

Coal generates about half of U.S. electricity, but 70 percent of the power Charlotte-based Duke Energy produces in the Carolinas and Midwest. Duke illustrates both the industry's liabilities and best hopes.

Its 108 million tons a year of carbon emissions rank Duke third-highest among U.S. utilities. The company's contributions to global warming, use of coal mined by blasting Appalachian mountaintops and construction of a new coal-fired boiler at its Cliffside plant prompted hundreds of protestors to march on Duke's headquarters in genteel Charlotte in April.

But Duke is also building a new-generation coal plant, in Edwardsport, Ind., that might be able to capture and store up to half its carbon emissions. Success for plants like Edwardsport, experts say, is key to securing the coal industry's future.

Duke executive Jim Turner, president of its regulated business segment, assured his audience that the company won't turn away from coal, in which it has invested $5 billion for non-carbon pollution controls.

"But there is a balance here," he said, "because the cleaner we try to get, the more it costs."

The costs of installing carbon-capturing technology could equal the amount U.S. utilities have spent for controlling all air pollutants combined, said Ron Barnes of Charlotte-headquartered Shaw Power Group, which designs and builds power plants.

The advanced design at Edwardsport will cost $2.3 billion for 630 megawatts, compared to the $1.8 billion (not including financing costs) for 825 megawatts at Cliffside.

The industry-supported Electric Power Research Institute says it is technically possible for utilities to reduce carbon emissions 41 percent by 2030, in line with legislation now before the U.S. House. Reaching that goal would likely cut Duke's coal use by about half, Turner said, as nuclear power, energy efficiency and renewable energy such as solar and wind grow.

Duke's Cliffside plant, for instance, will become "carbon-neutral" -- release no carbon dioxide above current emissions -- by 2018 because the company will shut down old, high-emission coal units after its 825-megawatt boiler comes online.

In an interview, Turner said Duke's future use of coal will depend largely on how carbon-capture technology develops over the next decade. If carbon controls can be retrofit to otherwise up-to-date plants, he said, "I think you could see a case where those plants survive."

If the technology doesn't mature as hoped, he added, Duke would probably turn to nuclear and natural gas, in addition to renewables and energy efficiency, to make up for shuttered coal plants. Duke is adding new gas-fired units to its Buck and Dan River plants. It hopes to build a nuclear plant near Gaffney, S.C., and is considering another in Ohio.

With electricity demand predicted to grow 26 percent by 2030, Lushbaugh said, the nation will have to build 25 to 30 new nuclear and low-carbon coal plants a year.

Apart from its role in carbon emissions, coal got another black eye last December. A Tennessee Valley Authority impoundment dumped 5.4 million cubic yards of toxic ash, the residue of coal-fired plants, into a river and community near Kingston, Tenn. TVA expects to spend up to $1.2 billion to clean up the mess.

Coal-Gen is expected to draw some 4,500 industry representatives in a conference at the Charlotte Convention Center that ends Friday.

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