:
Thank you very much, Mr. Chair.
Honourable members of Parliament, ladies and gentlemen, it is my pleasure to be here today, along with my colleague from Natural Resources Canada, Graham Campbell, who, as was mentioned earlier, is the director general of the Office of Energy Research and Development.
Together, our organizations are the main engines of energy, science, and technology at Natural Resources Canada. As you can see from the slides, this has been going on for quite some time. This is our 100th anniversary of energy, science, and technology, serving the government and people of Canada.
We are here at your invitation to talk about the exciting and emerging topic of clean coal and how it can help to green Canada's electricity supply.
I'd like to get right into it. Why clean coal? If you look at the first slide, I have come up with five points. One is that at present, Canada has almost 17,000 megawatts of coal-fired electricity-generating facilities located in six provinces. We depend on coal to provide a large percentage—18% of our national supply of electricity—and coal is an important part of the energy mix in all of these provinces, but especially in Alberta, Nova Scotia, and Saskatchewan, where coal is the dominant fuel for electricity generation.
Another reason is that Canada has large proven reserves of coal. By one estimate, we have over 200 years' worth of proven coal reserves, and maybe even 1,000 years' worth.
The third point is that it's inexpensive and that the price of coal is much less volatile than, let's say, natural gas.
The fourth point is that this huge resource presents a major challenge, however. Conventional coal-fired power plants contribute significantly to emissions that cause smog and acid rain. With clean coal technology, this fuel can be used in an environmentally acceptable manner.
Finally, the Canadian Electrical Association expects that over the next 20 years, Canada will require 20,000 megawatts of new capacity per decade to meet load growth and replacement of the retiring generating units. So it is important that clean coal technologies be developed in time to replace the existing capacity.
What is clean coal? Modern coal-fired power plants using today's commercially available technology are already much less polluting; however, in light of climate change, clean coal power generation requires that CO2, carbon dioxide, generated during combustion is also captured, compressed, and safely stored deep in geological formations. When we speak of clean coal, we are referring to capturing nearly all of the greenhouse gases and the remaining emissions from coal-fired electric power plants. We call it near-zero emissions.
Several transformative technologies have been identified in our technology road map to achieve this, including post-combustion capture, which is the capturing of carbon dioxide from flue gases using an absorbing material to selectively absorb the CO2. The relatively pure CO2 is later released from the absorbing material when the material is heated. The CO2 is then compressed and stored.
The second major technology is oxy-fuel combustion, which is burning fuel in oxygen instead of air, resulting in a highly concentrated stream of CO2 that is then compressed and stored.
The third main technology is pre-combustion capture, or integrated gasification combined cycle. This involves conversion of coal to a synthetic gas. That synthetic gas is composed of hydrogen and carbon dioxide. The carbon dioxide is separated through a high-temperature filter and compressed and stored. The hydrogen then goes on, of course, to be burned in the gas turbine, which is a turbine very similar to an airplane engine. Steam comes out of that, which pushes a steam turbine. So both turbines generate electricity.
Clean coal research is ongoing throughout the world, but the focus has not included the utilization of low-ranked coals, such as the Canadian sub-bituminous and lignite varieties. An opportunity exists for Canada to take a leadership role with respect to these types of coals, to provide utilities with a powerful option to meet Canada's energy needs and create a highly exportable technology. Canada's development of these new technologies not only improves our own air quality, with all the related health benefits, but also contributes to the global effort to reduce greenhouse gas emissions.
NRCan has been working with industry for over 13 years to develop the basic technology for oxy-fuel combustion of coal, coal gasification, and the new technology you may have read about recently, thermoenergy integrated power system, or TIPS for short, which is a new form of oxy-fuel combustion. Our scientists are the world's leading experts in developing clean coal technologies.
Ultimately, this technology is expected to produce not just electricity, but also a panoply of chemicals, including hydrogen, all from coal and all with low emissions.
Regardless of the technology that is chosen to capture the CO2, this gas will have to be safely stored in geological formations. Do we have enough capacity in Canada to store all this CO2? The answer is that we have plenty of capacity. We have up to 800 years' capacity at today's rate of production.
NRCan's leadership in this file extends to CO2 capture and storage as well. Our sister laboratory in Devon, Alberta, has been supervising the federal investment in the Weyburn-Midale CO2 monitoring and geological storage project in southeast Saskatchewan, where we are studying the injection aspects of geological storage in scientific detail.
We have also recently completed Canada's clean coal technology road map, which identified clean coal technology pathways for capturing CO2. I brought copies with me today for your convenience, but it can also be downloaded from our website.
This road map represents the collective wisdom of over 120 stakeholders and practitioners, including the technology suppliers and the utilities as well as government stakeholders. It defines the most likely technology pathways to achieve Canada's need for clean coal by 2025.
I would like to conclude my portion of the presentation by saying that our department has already started to move forward on this technology road map. Canada and Alberta have established the Canada-Alberta ecoENERGY Carbon Capture and Storage Task Force, an external panel of experts, to assess the economic, technical, and regulatory hurdles that lie on the road to large-scale implementation of this technology. This technology is necessary for clean coal. They will report back with recommendations later this year, in November.
:
Thank you very much, John.
On slide 7 I'll pick up the briefing from there, Chair.
[Translation]
While there are certainly incremental gains to be made in the performance of today's technologies, we believe that a fundamental change in technology is needed to make significant progress toward meeting the green challenge. We see our science and technology vision as an emissions-free electricity sector in Canada. Our mission is to develop and demonstrate new integrated technology solutions to eliminate all pollutants from fossil fuel-based applications, including power generation, oil sands operations, hydrogen production and cogeneration facilities.
Our approach at NRCan is to work in close partnership with industry, the provinces and research institutes across the country. And, since only a small fraction of the world's research and development is done in Canada, we also work internationally through the International Energy Agency and international partnerships such as the Carbon Sequestration Leadership Forum.
[English]
On slide 8, we talk about NRCan leading much of Canada's work in clean coal R and D, providing funding, providing support for networks, and mobilizing the R and D capacity in NRCan's CANMET Energy Technology Centre, other federal and provincial departments, and research institutes and universities.
We invest annually on the order of $5 million in clean coal and $8 million in CO2 capture and storage. These are important areas for us, making up 13% of our total portfolio.
There are three broad areas of research we're pursuing now. The first is to maximize the amount of energy generated per unit of coal, in other words, maximizing the overall generation efficiency of the system. Second is reducing and eventually eliminating emissions from the overall system, with our long-term vision and goal that of zero-emission systems. Third is maximizing the careful handling and productive use of the by-products in order to drive economic benefits from the process overall, such as using the captured CO2 for enhanced oil recovery or capturing the hydrogen produced by the system for transportation purposes. This requires an approach that takes account of the fuel itself, the core technological process, the emission products, and also the valuable by-products in a fully comprehensive manner. In this regard, we have closely followed the advice of the national energy panel on the sustainable S and T strategy to adopt an energy systems approach for the purpose of designing our research and demonstration programs.
The government recognizes that one of Canada's most important challenges, and also an opportunity, is to be a clean energy superpower. This means we must use all forms of energy efficiently, recognizing that the greatest source of untapped energy is the energy we waste; that we need to increase our use of renewable energy in all forms; and that a concerted effort is essential to develop new technologies to make conventional energy cleaner.
To help achieve this goal, part of the new package of ecoACTION initiatives announced recently provides targeted funding for new technology. The ecoENERGY technology initiative, announced in mid-January, will provide $230 million over the next four years to support the search for long-term technology solutions, thereby reducing and, hopefully, eliminating air pollutants and GHGs from energy production and use. The goal is to foster development and demonstration of the next generation of clean technologies to break through to emissions-free production in energy end use.
Funding for further work on clean coal and CO2 capture and storage has been earmarked in the clean electricity portfolio within this package. Our priorities there include important areas for Canada, such as clean coal and CO2 capture and storage, as we've already mentioned, and also distributed generation and next generation nuclear systems.
On slide 9, we talk about projects.
[Translation]
The power utilities in Canada are also pushing ahead with studies to look into the next generation of clean coal technologies that are well-matched to quality and properties of Canadian coal.
[English]
The Canadian Clean Power Coalition, for example,
[Translation]
a group of power utilities in Alberta led by EPCOR Corporation, is doing a feasibility study of technologies for converting Alberta's sub-bituminous coal through gasification to combustible synthetic gas other by-products, with CO2 capture built into the process.
Saskatchewan Power Corporation has studied an oxy-fuel system which uses oxygen in place of air for combustion of Saskatchewan's lignite coal, also with effective capture of the CO2.
If projects such as these go ahead, Canada will take a world-leading position in the latest development in clean coal and CO2 capture technology.
[English]
Let me briefly wrap up our opening presentation today by underlining a few key points.
First, our goal is to work towards eventually achieving near-zero emissions from coal-fired plants, including all pollutants. Excellent progress is being made by Canadian researchers on the technology front through the development of next generation technologies, which are well suited to the needs of Canadian coal. If the results of the feasibility studies I've mentioned are positive, then there are emerging demonstration projects that will move Canada to the leading edge of clean coal technology, positioning our companies well to take advantage of commercial opportunities abroad.
Lastly, technology development is definitely a team game, and we highly value our partners at home and abroad.
[Translation]
I hope that we have addressed the committee's needs for an update on the exciting developments in clean coal technology and our initiatives underway now in the Department to move Canada ahead toward our long-term environmental goals of emissions-free electricity production.
We thank you for the opportunity to meet with the committee today and we look forward to any questions you may have or any follow-up information you may require.
Thank you very much.
We've been following the FutureGen project very carefully since its beginning. Just a thumbnail sketch, it's essentially a project to generate hydrogen for the purposes of furthering the hydrogen economy plus electricity. It includes CO2 capture and storage.
You're correct to say that the sponsors are the U.S. DOE, plus a consortium of U.S. power generation utilities and coal companies that have come together around the project.
Clearly, that's a project well matched to U.S. needs and purposes, and there may well be some opportunities for exchange of information and collaboration, and so on. But when scarce resources present themselves, it's important that we dedicate and aim our resources where they're best suited. We think the focused initiatives, either that are running in our labs or that are running in the projects that I briefly talked about today, are certainly important, top-of-the-page considerations.
The news from FutureGen just recently too--I heard last week--is that there has been some cost escalation in the project beyond what was originally anticipated. So I think this is challenging the moving forward. It sounds as if it is moving forward fine, but I think cost escalations are part of the current lexicon, if you like.
There are four sites that have been selected for pre-screening, two in Illinois and two in Texas. The process over the course of the next few months will be to try to make a choice, difficult though it may be, out of those four candidate locations that are on the books now.
We're monitoring very carefully. We're in contact with our colleagues in the U.S. Department of Energy. At this time, we're keeping an eye on it in the hopes that it will mature and that we'll be able to learn something from it in due course.
It's a very important project for the U.S. electricity industry, and for the hydrogen side of the equation as well.
:
Oh, yes, that's why I came.
Thank you, Monsieur Ouellet.
I'll have to have him repeat the answer.
Thank you, gentlemen. That is the limit of our time for our discussion with the representatives of the Department of Natural Resources. So I'll thank Mr. Campbell and Mr. Marrone for their time today and for responding to the questions of the committee.
Thanks very much.
While we are waiting for the next witnesses, I am going to ask the committee about some other business that came up.
We received an invitation from the National Research Council. You'll recall that they appeared before the committee, and there was some interest from some of the committee members in looking at the gas turbine plant at the NRC. Despite that interest, it would be somewhat difficult I think to arrange this in the time we have. It involves going through the same process we'd follow if we were going to Churchill Falls, just to go to the turbine here in Ottawa. Unfortunately, that's the case with regard to moving equipment and translators and things. I just want to raise that with the committee.
Unless there's a strong demand from the committee to pursue it, I think I'm just going to thank them for the invitation and respectfully decline. I think first we just don't have the time. If individuals would like to go on a tour, I'm sure that could be arranged, but as a committee I think it would be somewhat prohibitive at this point to include it in our agenda.
I will leave it to committee members. If they want to go on a personal tour of the gas turbine lab in Ottawa, at the Montreal Road campus, I'm sure they would welcome you to attend.
Is that okay?
Now we'll carry on with the business of the day, which is the greening of electricity consumption in Canada, the use of coal, and towards a clean technology.
We have now, representing the Coal Association of Canada, Mr. George White, chairman; and from the Canadian Clean Power Coalition, David Lewin. David, thank you for attending as well.
We're going to proceed in the same manner. I'm going to ask you to try to keep your initial opening remarks to about 10 minutes. Then we'll proceed with questions until our time runs out.
Mr. White, are you prepared to begin?
All right. We'll ask George White, chairman, from the Coal Association of Canada to begin his presentation.
:
Thank you, Mr. Chairman, honourable members, ladies and gentlemen.
I think maybe half of what I'm doing today is representing the Coal Association. There'll be a big dollop of Sherritt International here as well. I haven't passed out notes, because I'm speaking from speaking notes. I really wanted to take the time to talk to the committee and follow up on some of the discussion we heard from the previous people.
I'm not as old as I look. I think it's a lot like some of the members of this committee. None of us are as old as we look. I've been in the coal industry for 25 years. I've been working in power plants and in that part of the business for a long time. I think there is a lot to be said about how we have proceeded.
I would like to talk to you a little about clean coal. Clean coal today is not the same as clean coal was 10 years ago. I'd also like to follow up with a bit of the conventional technology, to talk to you about what's taking place using the kind of technology that we still use today. Then I want to talk about some very exciting things that Sherritt International has in place as far as the use of coal and the business strategy behind the use of coal for gasification go.
There's no doubt in my mind that we will make the transition to gasification. I think the leadership will come from industry. It will be guided, directed, and steered by regulators and governments, but the leadership will come from the industry, because there's a business case to do it. Hopefully I can go through that with you.
The kind of technology we use today to make electricity in Canada is not new. It's been around for a long time, but it's improved as time has gone on. The original concept of clean coal was coal that we could burn via combustion in a typical power plant, which didn't produce any acid gases, or reduced the amount of acid gases. Many of us can remember when sulphur dioxide and NOx and those kinds of things were real issues and something had to be done about them. Twenty years ago we started putting technology in, but not all of that technology has been implemented, so we still have acid gases. When provinces like Ontario started talking about clean coal, even in the last three or four years, the original issue was around asthma, and asthma is caused by the acid gases.
Now we've got another issue that's facing us in the industry, and that is the fact that we're also producing CO2. The solutions for the acid gases could be the same as the ones for the CO2. Had the problems been reversed, probably we would have a solution by now because we would have chosen a different course. The solution for the carbon dioxide is much more difficult than the one for acid gases.
The acid gases problem presented itself first, and as a result we built retro technologies on existing plants that were capable of doing a lot to improve the acid gas situation. We were able to take the existing problem, develop technology that was basically add-on--so we didn't have to build new plants or make a transition to a brand new technology--and get some success. That happened in the last 20 years, and there has been a lot of success.
Witness the fact that the people who make these power plants in North America have built very few power plants in the last 20 years, and yet most of these companies are still viable and successful. The reason for that is they've been building back-end technology for the old plants that they built a number of years ago. This could be done in Ontario, but they decided not to do it, and there are reasons for that. Nevertheless, when we looked at clean coal 20 years ago, we were looking at acid gases. When we look at clean coal today, we're looking at all the emissions from coal-fired power plants, and because there's so much carbon in coal, the big issue is carbon dioxide.
When I started in the industry, my own personal thought was that it didn't make sense to me that we should clean up the problem at the end of the process. It always seemed reasonable to me that it would be easier to work on a tonne of coal than three or four tonnes of emissions. A tonne of coal is something you can put in front of you and see; the emissions are somewhat more nebulous and difficult to deal with. When we come to the gasification process, that's really what we're talking about. We're talking about dealing with the emission problems before we use the fuel, by creating a new fuel.
We have been building the conventional plants in Canada--and there are lots of them--since 1950, as far as I know. The old Hearn station in Ontario was built in 1950. It's now shut down. Many of the less efficient plants in Canada have been shut down and have been superceded by newer plants.
Every subsequent plant that's ever been built in Canada with conventional technology has been more efficient than the previous one built. I think it goes without saying that the technology has evolved. However, there are some thermodynamic principles associated with this type of technology that make it very difficult to improve, and continue to improve, that technology over a long period of time so that we could get conventional technology to a point where it was actually 100% efficient, for example. That cannot happen, theoretically, because of losses and the thermodynamics of the situation.
I'm sure Dave Lewin will talk to you about conventional plants that have been built in Canada recently, which are 19% to 20% more efficient than the existing fleet. By seeding these new plants into the existing fleet, eventually we could get to the point where we are 20% better, if that's all we wanted to do, and just build brand new conventional plants that are ever more efficient. By doing that, we could probably get between 20% and 25% greater efficiency over the next, say, 25 years, and that would result in 25% less carbon dioxide being produced for the same amount of power. That's one strategy you could use to reduce the carbon dioxide emissions by, let's say, up to 25%.
In Ontario, it appears there are a lot of reasons why we shouldn't just attack the acid gases. So Ontario has decided not to put scrubbers on existing power plants, for example, and has decided to go the nuclear route. But another option would be to build brand new coal-fired power plants that are more efficient than the ones that are there. You'll get as much reduction in acid gases as the technology will allow—which is extensive nowadays—and up to 20% to 25% reduction in CO2 for the same amount of power produced. That's a strategy that could be developed in Ontario. It's been decided not to do that.
One other point in Ontario is that the mix of existing technologies is very important. A system that is all nuclear is not going to be very easy to operate. A system that is all hydro is not possible because we've used up so many of our hydro sources. So a power or electricity system is very much like a portfolio of stocks and bonds: you don't want to have all your money in one basket. And it's important to maintain that, from the point of view of responsibility for security of supply, and even emissions, over a long period of time.
So that's what I think we can do with conventional plants.
If you look to Europe to see what the Europeans are doing, you'll find that they're not building integrated gasification, combined-cycle-type plants, but they're building conventional power plants, which are more efficient than most of the plants in their fleets and are located in the centres of cities, with lots of acid gas emission reduction. They're improving the efficiency of the plants not just by producing electricity; they're also producing hot water, for example, and they use it for heating and cooling, depending on what time of the year it is.
Now, you also have to remember that in Denmark and Germany and these places, where these things are being done, power rates sometimes are four or five times higher than they are here. So if you want to spend the money on electricity, there's a lot that can be done as far as the technology is concerned.
In Alberta, we have a confluence of circumstances that is really special in the world; there is no place in the world that has the potential for integration of the energy systems that exist in Alberta. We have heavy oil, which requires hydrogen to be upgraded into light oil. We have coal, which we use to make electricity today, but we can also take the coal and gasify it and make hydrogen. We have depleted oil wells that could use carbon dioxide to improve the output of those depleted oil wells. The gasification process and the hydrogen production process produce carbon dioxide as a byproduct, and that byproduct would go into the ground and become a commercially viable byproduct from the whole process.
I mentioned earlier that there is a business case for doing this. The technology associated with gasification is extremely important to our company and to our shareholders. We believe that if you go back and take a look at the oil business in 1910, there was lots of oil in the world, a much greater amount than what was required. As a result, oil in the ground had very little value. So shareholders didn't value companies on the basis of the oil they had in the ground; they based it on the value of the oil that was being produced and sold.
Nowadays, you have to pay $35,000, $65,000 a barrel for oil in the ground, on a yearly basis. So the value of the oil that's in the ground today is recognized by the investment community. The same is true for natural gas. And the same is true for bitumen nowadays. Bitumen in place costs a lot of money. It's not true for coal yet.
But when we demonstrate the technology to gasify coal to turn it into hydrogen, that coal that's in the ground will have value. That is the business strategy for developing gasification within these companies. If you talk to Peabody Energy in the United States—I was talking to one of their vice-presidents a couple of weeks ago—that's what their plan is. They want to make liquids.
They have to make liquids because they don't have an opportunity to make hydrogen the same way we do. We can make hydrogen and we can sell the hydrogen to the heavy oil companies. In the process, we have a business case to perfect the gasification process. By perfecting the gasification process, we can open that process up to the power business, to the electricity business, taking away the risk by working in an integrated fashion with these various different industries. All of this exists in Alberta, and it's my prediction that over the next few years you're going to see this.
Our company, Sherritt International, has taken Alberta coal, we have sent it to Europe, we have put it in a gasification process that exists in Europe, and we've demonstrated that this coal can be gasified. Right now we have a team of about 15 people working on a feasibility study that will be completed by the middle of this year, whereby we will decide whether we're going to go ahead with a commercial gasification project to produce hydrogen in Alberta. We have partners who we're talking to about that process. There are synergies between that process and not just the heavy oil business and the enhanced oil recovery business, or the coal-bed methane business, but also the electricity business.
So that's our story. That business strategy is there. There's a reason for us doing all of this. I think the message I'd like you to take back, more important than anything else, is that the leadership will come from industry. The guidance and the steering, the regulations, will come from the regulators and from government.
Thank you.
:
Thank you very much for the opportunity to speak to you today.
I have quite a number of slides, so I'll do a quick page flip and try to stay within the time limit of 10 minutes.
There is a presentation outline on page 2. The topic is the current status of clean coal technologies. First of all, I'll give an overview of the CCPC and discuss some results of our early phases one and two, as we call them, provide some insight into projects that were borne out of earlier CCPC work, and then briefly cover off the next step, the phase three plans.
Page 3 indicates that it is no surprise to anyone that Canada has substantial fossil fuel reserves. Coal is by far the significant portion of these reserves, and these reserves will last for many centuries.
Page 4 talks about the Canadian Clean Power Coalition, which was formed in 2000. It's an association of predominantly Canadian, but also U.S., coal and coal-fired electricity producers. There are also participating coal miners. It's also an industry-government partnership, both federal and provincial. The objective is to demonstrate that coal-fired electricity generation can effectively manage all the environmental issues of concern. When I speak of that, there are usually five emissions of concern, and that's NOx, SO2, particulates, mercury, and also CO2. An additional requirement was to demonstrate flexible fuel capability, given the range of carbon-based fuels we have across the nation, and our website is there for anyone who wishes to go to it.
On page 5 there's a list of the coalition participants.
Page 6 indicates that government participation to date has been through Natural Resources Canada. I might at this point add my thanks to Natural Resources Canada for funding in the past, and hopefully funding in the future for some of our continued efforts. There's also the Alberta Energy Research Institute, which is the funding arm of the Alberta government, and Saskatchewan Industry and Resources, the funding arm of the Government of Saskatchewan, which has also participated to date.
Some of our early results are shown on page 7. It's a fairly complicated slide, but suffice it to say that we've looked to date at a range of coal types--lignite, which is the lower end of the quality of coal, sub-bituminous, the mid-ranked coal, and bituminous coal--and applying different technologies sort of across those different types of coal: conventional pulverized coal technology as well as coal gasification. The inclusion of CO2 capture with those technologies increases the cost of electricity significantly in that work and certainly above that of conventional coal without CO2 capture. However, the results show that both capital costs and costs of electricity are reduced by moving from conventional PC technology to technologies like coal gasification with CO2 capture included. In all of these cases, we've also included the reduction of NOx, SO2, particulates, and mercury, reducing those by up to 90% compared with the current pulverized coal technology.
On page 8 there's an idea, in a sense, of the CO2 storage and utilization options, particularly in the western Canadian sedimentary basin. Of course, capturing CO2 from these processes requires a pipeline infrastructure and the ability to store CO2 in depleted reservoirs, all for use preferably in enhanced oil recovery. Both EOR and storage capabilities are available in Saskatchewan and Alberta, and maybe a little bit in Ontario, as we've heard, certainly in the U.S., and perhaps offshore Nova Scotia.
So that's where we got to with respect to our phase one work that we completed in 2003.
Page 9 shows that phase two continued, and, as with all studies, the technology knowledge gaps were identified, requiring further investigation. So phase two of our work began with the objective of answering these knowledge gap questions with a focus on low-ranked coals, particularly lignite and sub-bituminous, which occur in western Canada, and using coal, looking at coal gasification, oxy-fuel combustion, and post-combustion pulverized coal emissions cleanup.
In addition, we've also looked at the merits of what's called polygeneration. I know someone asked the question about FutureGen. FutureGen is an example of a polygen project, which basically is a simultaneous production of not just power or electricity but also other chemical products, like hydrogen, substitute natural gas, diesel, and so forth.
Page 10--the preliminary indications of the phase two work--shows that the phase two work is nearing completion. Preliminary results indicate, though, that through design integration we can improve the efficiency of coal gasification, IGCC, with CO2 capture, certainly using low-ranked coals, significantly compared to our initial phase one work, and of course that efficiency improves the overall economics.
With reference to the next slide, and the recent cost escalations in terms of steel, concrete, labour, we're actually reworking our numbers on those costs. So those numbers shown on the next slide--page 11--are not available today, but I can make them available when we've completed the work.
It's a relative comparison, and clearly sub-bituminous coal in Alberta, and particularly with CO2 capture, begins to improve the economics of IGCC and coal gasification, particularly where there's a saleable product, such as CO2 for enhanced oil recovery.
With lignite coal, IGCC may not be the best current solution. As Saskatchewan Power have decided, they're pursuing oxy-fuel as a solution to their lower-ranked lignite coal.
On page 12, we did actually look at the supercritical plant burning a variety of coals and capturing CO2 through an oxy-fuel process or amine scrubbing, which is a post-combustion cleanup process.
On page 13, that's the legend with respect to the previous slide.
On page 14, you can see there are significant improvements that can be made in terms, certainly, of CO2 capture with all of the technologies--oxy-fuel, amine scrubbing, and IGCC, coal gasification.
On page 15, our work to date has really concluded that all emissions of concern--NOx, SO2, particulates, mercury, and CO2--can be reduced significantly for coal-fired electricity generation, simply using technology or developing the technology for use.
So what are the next steps towards commercializing clean coal technology? On page 16 I will highlight two spinoff projects that are now under development: first, the SaskPower project; and secondly, the EPCOR project.
The SaskPower project will use supercritical pulverized coal technology and an oxy-fuel, oxygen-rich process. Capacity is about 300 megawatts. It includes CO2 capture. The fuel is lignite fuel, so a low-ranked coal. The pre-engineering work is nearing completion, and a decision to proceed towards construction is expected this year. The planned in-service date, I understand, is 2012.
The CCPC/EPCOR IGCC project--and by the way, I'm an employee of EPCOR--is a $33 million, three-year, front-end engineering design project. We are now looking at probably around a 500-megawatt coal gasification plant. This is page 18, by the way. It includes CO2 capture and storage.
The funding is one-third industry, one-third Alberta government, and--we're hoping--we're working with the NRCan people with respect to one-third funding from the federal government.
The fuel is from Genesee in Alberta, sub-bituminous coal. The project commenced in October 2006 because we had enough funding in place to commence the project. The first phase is the technology selection process, as we call it, which is expected to be completed this year. We're looking at four or five different coal gasification technologies at the moment. The idea is to select one, and then we'll base the front-end engineering design on that particular chosen technology. The FEED, the front-end engineering design, is planned for completion in 2009, by which time we would then be in a position to make a decision on construction of that plant.
As indicated on page 19, phase three plans of CCPC are to assess technology improvements on an ongoing basis; evaluate new and emerging technologies; participate with other organizations, either nationally or internationally, on clean coal technology initiatives; and develop an information database to really capture all the learning we have accrued to date.
Those are my comments, Mr. Chairman. I hope I've stayed within the 10 minutes.
:
With respect to my own company, EPCOR, we try as best we can to anticipate the changes in regulation, not only provincially but also federally, that are coming down. That was really what forced us to pursue supercritical technology with respect to the third unit we built at Genesee, starting in 2002. It has been in operation for almost two years now, since 2005. We try to anticipate changing regulation with respect to all of those emissions I mentioned: NOx, SOx, particulates, mercury, and CO
2.
On the CO2 front, with the supercritical technology, given that it's an 18% improvement in thermal efficiency, you're getting on an intensity basis a reduction of 18% in terms of CO2. So that's a major improvement with respect to that technology.
With respect to NOx, SOx, and particulates, we were able to take advantage of what we call “best available technology economically achievable”. It's a long phrase, I know, and we refer to it as BATEA. We were able to take advantage of that technology that's available, so we were able to introduce low-NOx burners, and they're working extremely well, way below the provincial standards. With respect to SO2, we were able to put in a flue gas desulphurization unit, bearing in mind that the coal in western Canada is very, very low in sulphur anyway. It's only 0.2% sulphur, whereas in eastern Canada and the eastern U.S. it's probably around 3%-plus. With respect to particulates, we're able to capture 99.8% of those.
We have been working over the past few years on mercury reduction with the province. As a result of that, there is now a new standard in place that by 2011 we have to capture 70% of mercury.
That has happened with respect to currently available technology. With respect to the future, then, we're focusing our attention, particularly, because of our coal, on coal gasification, because it demonstrates that it can reduce all those emissions that I mentioned down to even significantly lower levels: NOx, SOx, particulates, mercury, and CO2.
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I can think of a number of things.
I think liaison between the people who are already successful in these industries.... Contrary to maybe the impression the committee got earlier, I don't believe that China is lagging in this, nor that India will lag either. The Chinese are building some pretty good technology. They have a lot of old technology as well, which they're not taking out of service, but the fact is that in many cases their environmental issues are so desperate that they cannot do anything except build the best technology that's available. They have many gasification plants, and I already know that NRCan is working with people in China to try to transfer the technology to that kind of thing. So that's one thing that could be done.
Support for the industry is another. The industry that is supplying these particular pieces of equipment is different from the industry that supplied the traditional coal-fired power plants. Companies like General Electric in the United States and Siemens and Shell are the companies that are supplying the gasification technology, or are looking at developing the technology, whereas the traditional power plant suppliers haven't picked up on the technology, mainly because gasification is more of a refinery type of process than it is a combustion type of process. It's different, so it's rooted in a different process.
The South Africans, for example, have the Sasol plants. South Africa, during the time of apartheid, were not allowed to buy oil so they produced their own oil. They used coal to do that. The technology is not transferrable to Canada, but many of the processes associated with their technology are transferrable to Canada: how to use the coal, how to deal with some of these effluents and problems that are created by this technology.
So there's a lot of goodwill that can be generated between the existing users and the people who have been successful in the industry and what we need here, including the United States, who really feel that their solution to the problem, I believe, is that we're not going to be able to stop the third world and developing countries from using coal, so we should develop the best technology here and then transfer that technology to those countries.