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Wednesday, February 06, 2008

Coal & Nuclear Vulnerable To Natural Ga$

The Washington Post and The New York Times had articles on increasing prices for electricity and a retreat on building new coal plants that has us concerned, particularly in a weakening economy. Combine the subprime crisis with increasing energy prices and cautious energy companies and we could really be in a big mess.

The New York Times:

Stymied in their plans to build coal-burning power plants, American utilities are turning to natural gas to meet expected growth in demand, risking a new upward spiral in the price of that fuel. With opposition to coal plants rising across the country the executives see plants fired by natural gas as the only kind that can be constructed quickly and can supply reliable power day and
night.

The Washington Post:
The story behind the electricity price increases begins in the late 1990s, when Virginia, Maryland and the District loosened their controls on the power industry. As in many other states, the idea was to let customers choose among power suppliers, creating competition that would push prices down. Power companies say they have been hit with higher costs, which had to be passed on to customers. The prices of natural gas and coal have increased sharply. And because the region needed to import electricity from other areas, utilities had to pay the power-line equivalent of highway tolls.
Nuclear power plants are now being projected to cost as much as $4 billion and if utilities are bristling at the increased upfront cost of coal plants imagine board room decisions on nuclear plants. Let's hope the nuclear industry can hold on to the subsidies for the first six plants or the nuclear renaissance could stall.

We think the coal, nuclear and natural gas industries are going to need to consolidate, or at least form expanded new consortia to build multiproduct power plants. If $4 billion is going to be spent for a power plant, it should be a nuclear/coal hybrid that produces hydrogen for fuel cells, oxygen for oxycombustion in coal plants that converts CO2 to gasoline via the Fischer-Tropsch method. A scrubber would still be needed for sulfur dioxide, nitrogen oxides and mercury (Selective Catalytic Reducer). The CO2 could be converted onsite or piped to other conversion facilities.

The nuclear part of the plant would be used to produce electricity and hydrogen via electrolysis (or high temperature electrolysis) or the sulfur-iodine cycle that would be used in the Fischer-Tropsch process and piped away to produce fuel cells. The oxygen from the electrolysis process will be piped to the coal part of the plant for use in the firebox. These processes need very high temperatures of about 900 degrees Celsius. (Full Description) And the consortia would need to partner with the natural gas pipeline companies to access their right of ways. The natural gas industry might not have a choice because although gas-fired power plants are cheaper to build, the gas simply is not available. Liquefied natural gas facilites are being rejected all over the U.S. Sounds like a new energy bill to us. Maybe the FutureGen and Nuclear Power 2010 programs should work together to explore the hybrid plant described above.

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