The “Coalfleet for Tomorrow” project was undertaken by the EPRI in conjunction with a number of coal-fired power generating bodies. The analysis study is part of the project’s initiative to make advanced coal technologies worthwhile investment opportunities while ensuring environmental sustainability.
IGCC combines high efficiency gas turbine power with coal use, using carbon capture and storage capabilities to prevent the release of harmful greenhouse gases such as mercury, sulphur and nitrogen oxides. The study by EPRI has shown that no single incentive could cover the cost gap between standard coal plants and IGCC plants but recommends that tailored packages of incentives may help encourage their deployment.
With two demonstration IGCC plants for observation, the EPRI has indicated that there would be a 15-20% increase in cost for electricity generated from the next few IGCC plants above that from conventional coal plants, half from higher technical risks and half from higher capital costs.
It forecasts that experience from the operation of future plants would close this cost gap to allow wider deployment but suggests that federal incentives such as tax-exempt financing, accelerated depreciation, federal cost-sharing grants, production tax credits and direct federal loans be offered to the initial few plants to jump-start the uptake of the technology.
The EPRI has said further analysis is necessary to examine additional incentives and the financing and deployment of a broader range of advanced coal technologies for the industry’s future.
