Washington (Platts)--15Oct2009/552 pm EDT/2152 GMT

The push to cut greenhouse gas emissions, specifically carbon dioxide, does not mean the end of coal-fired generation, but coal, which is fueling about 50% of US power generation, will not be the dominant player in 20 years, panelists said Thursday in web seminar.

"Under the basic [American Clean Energy and Security Act] case, [by 2030], coal consumption is 707 million short tons, down 46%; production is 738 [million] st, down 42%; and coal accounts for 29% of the electricity generation," said Scott Sitzer, acting director of the Electric Power Division in the Office of Coal, Nuclear, Electric and Alternate Fuels at the US Energy Information Administration.

In June, the US House of Representatives passed the climate change bill in a 219-212 vote. The House bill calls for capping industries' GHG emissions in 2012 with reductions of 17% below 2005 levels by 2020 before tightening emissions to a level 83% below 2005 levels by 2050. The Senate is currently negotiating its version of the legislation.

David Ensor, manager of fuel planning and supply at Santee Cooper, a utility based in and owned by the state of South Carolina, said uncertainty over whether the bill will be adopted was the main reason the Santee Cooper decided to build two new nuclear units instead of a new coal-fired unit.

"The operative word in uncertainty," Ensor said.

Santee Cooper had plans to build the Pee Dee facility, a 600-MW coal-fired power plant, near Kingsburg, South Carolina, but in August, the utility put the permitting process on hold and decided, instead, to build two new nuclear facilities.

"We always said the coal unit would be a bridge to the nuclear facility," Ensor said, "but we will not need that additional coal-fired generation."

The economic downturn cut industrial demand by 18% below what it was last year. "It's recovering, but not at the same rate as previously," Ensor said. "Then, there is the uncertainty with the cap-and-trade legislation and finally, we sell half our power on the wholesale market for the co-ops in South Carolina and that agency has asked us to take some load off our system," Ensor added.

Santee Cooper produces 89% of its electricity from coal, 10% from nuclear, 4% to 5% from natural gas, 1% to 2% from hydroelectric faciliites and some from landfill gas generation and purchased power, Ensor said.

"We have stated that by 2020, 40% of our generation would be from non-GHG sources, like renewable and conservation projects. [There's] no way to achieve that target without [nuclear]," Ensor said.

John Mead, director of the coal research center at Southern Illinois University at Carbondale, told listeners that carbon capture and storage was "key to coal's future."

He applauded the US Department of Energy's efforts for testing CO2 storage through its Regional Sequestration Partnerships, but he added that the test sites need to be matched with actual coal-fired power plants.

"Many plants are not located in areas where the geologic sequestration is located," Mead said. "FutureGen is the exception: It was chosen because of its closeness to a geologic storage area."

Mead agreed with Sitzer and Ensor that, while coal would remain dominant for the next five to 10 years, that domination would fall off as other energy sources, such as nuclear, natural gas and renewables grow.

"In 20 years, coal and nuclear will compete, with nuclear making gains and coal probably becoming a bigger force for alternative products that use those carbon-based products," Mead said.

Retrofitting the older coal-fired power plants, many of which are between 30 and 40 years old, would be another challenge, Mead said. Because coal is such a major player, shutting down all those facilities and switching to gas or nuclear will not be easy or done quickly. New facilities have to be permitted and built.

But that's when advanced coal-fired technology would play a role, as gasification technologies help facilities emit fewer CO2 emissions, as well as fewer sulfur dioxide and nitrogen oxide emissions.

"Coal is extremely important, but that depends on what type of legislation is put in place," Sitzer said. "As far as the consumer is concerned, coal is still the low-cost alternative."

--Regina Johnson, regina_johnson@platts.com