Washington (Platts)--21May2009

The US Department of Energy said Thursday it plans to speed up ways to
capture carbon emissions from coal plants, sequester it, and even reuse it on
a commercial scale by using $3.4 billion from its $40 billion in stimulus
funding.

In three Notices of Intent issued Thursday, DOE said it planned to issue
three funding opportunities later in May -- one for its Clean Coal Power
Initiative, another for carbon dioxide storage technologies, and another for
sequestration technology training.

Under the Clean Coal Power Initiative, DOE said it planned to award $800
million for advanced coal projects that have progressed beyond the research
and development stage to "a point of readiness for operation at a scale that,
once demonstrated, can be readily replicated and deployed into commercial
practice within the electric power community."

The NOI, which was from DOE's Office of Fossil Energy and its National
Energy Technology Laboratory, says the Clean Coal Power Initiative is looking
to target "advanced coal-based systems and subsystems" that capture, sequester
or put to beneficial reuse the carbon dioxide emissions from coal plants.

Applicants' technology must work within existing or new power plant
facilities that use US-mined coal or coal refuse for at least 55% of their
energy input, use other solid feedstocks such as petroleum coke or biomass for
up to 45% of the energy input, and produce electricity as at least 50% of the
output, DOE said.

Applicants' technologies should be able to capture at least 50% of carbon
emissions from the plants and eventually be able to capture 90%.

Some CO2 capture technologies increase the cost of electricity. Part of
DOE's goals in testing CO2 technology is to find one that does not increase
the cost to produce and deliver electricity.

DOE wants to find technology that does not increase the cost of
electricity more than 10%. For combustion or oxycombustion systems, the cost
of electricity using the carbon capture technology should not exceed 35%.

Or the technologies should be able to reuse a minimum of 300,000
tons/year of carbon emissions using a 30-day average to determine if the
project successfully meets the carbon dioxide capture efficiency and the
capture and sequestration or beneficial reuse rate requirements in the
announcement, DOE added.

Under the second NOI, DOE is planning to award $50 million for projects
that successfully store carbon emissions in geologic repositories.

DOE is looking to determine usefulness of potential geologic storage
sites, to augment existing data sets and refine best practices for approving
storage site selection, and to characterize a minimum of 10 distinct "high
potential" geologic formations which can include saline formations,
depleting/depleted oil fields, or coal seams.

The funding will be available for all applicants except federal agencies,
but DOE said national laboratories will be able to apply if it is part of a
team. The awards will be part of a cost-shared agreement between DOE and the
applicants chosen.

Under the third NOI, DOE will issue $20 million in grants to train
workers to use the various carbon capture and sequestration technologies.

"The training will specialize in the applied engineering and science of
carbon capture and storage training for site developers, geologists,
engineers, and technicians," DOE said.

The rest of the $3.4 billion has not been allocated.

--Dipka Bhambhani, dipka_bhambhani@platts.com