oversight

Fossil Fuels: Outlook for Utilities' Potential Use of Clean Coal Technologies

Published by the Government Accountability Office on 1990-05-24.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

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                                                      FOSSIL FUELS
    May      1!I!)0
I




                                                      Outlook for Utilities’
                                                      Potential Use of Clean
                                                      Coal Technologies
                                                                                                                    s



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                                                                                                            141620




                                                                 _.II-
    (AO/K(        :EI)-9th 166
Resources, Community,     and
Economic Development      Division

B-239607

May 24,199O

The Honorable Philip R. Sharp
Chairman, Subcommittee on Energy
  and Power
Committee on Energy and Commerce
House of Representatives

Dear Mr. Chairman:

As you requested, this report presents information on the extent to which electric utilities
plan to use clean coal technologies on their coal-fired power generating units and how such
technologies could contribute to reducing acid rain. It also provides utilities’ perspectives on
how they might react to different emission reduction requirements and compliance dates.
The preliminary results of our review were presented in our Statement for the Record (GAO/T-
HCED-90-3)submitted for your Subcommittee’s October 18, 1989, hearing on acid rain control
provisions of the administration’s proposal to amend the Clean Air Act. We also testified on
our preliminary results on March 28, 1990, before the Subcommittee on Economic
Stabilization, House Committee on Banking, Finance and Urban Affairs (GAO/T-RCED-90-56).

As arranged with your office, we plan to distribute copies of this report to the Secretary of
Energy and other interested parties and to make copies available to others upon request.

Please call me at (202) 2’751441 if you have any questions about this report. Major
contributors are listed in appendix VI.

Sincerely yours,




Victor S. Rezendes             1
Director, Energy Issues
Ekecutive Summary


                   About 20 million tons of sulfur dioxide (SO,) emissions and about 20
Purpose            million tons of nitrogen oxides (NO,) emissions are released into the
                   atmosphere in the United States every year, contributing to the forma-
                   tion of acid rain. Electric utilities burning fossil fuels-primarily coal-
                   account for about two-thirds of the nation’s SO, emissions and about
                   one-third of the NOXemissions. Continuing congressional debate has
                   focused on acid rain control proposals that would require many utilities
                   to significantly reduce powerplant emissions by specific deadlines. At
                   the same time, Congress has authorized the Department of Energy (DOE)
                   to institute a $2.75-billion Clean Coal Technology Program to share in
                   the cost of industry projects demonstrating emerging clean coal technol-
                   ogies that show promise of reducing SO, and NO, emissions.

                   Concerned about the relationship between DOE'Sprogram and acid rain
                   control proposals, the Chairman, Subcommittee on Energy and Power,
                   House Committee on Energy and Commerce, requested GAOto examine
                   (1) the extent to which electric utilities plan to use clean coal technolo-
                   gies on their power generating units and (2) how such technologies could
                   contribute to reducing acid rain. Using a questionnaire, GAOrequested
                   information on utilities’ plans to use these technologies at a random
                   sample of the nation’s fossil-fueled power generating units with 75
                   megawatt or greater capacity-and        the extent that they would use such
                   technologies at these units to meet four acid rain control scenarios that
                   GAOdeveloped.


                   GAOconsidered acid rain control bills in the 100th Congress in develop-
Background         ing its scenarios. The scenarios included both moderate and stringent
                   SO, and NO, emission reduction requirements by 1997 and 2004 compli-
                   ance dates. GAO'Sscenarios are generally more stringent than the emis-
                   sion requirements in the Senate and House bills recently approved to
                   amend the Clean Air Act.

                   GAOreceived responses for 94 percent of the sampled generating units.
                   Because utilities were primarily interested in the technologies for their
                   coal-fired units, this report discusses responses for coal-fired units only.
                   The results have been applied to the universe of coal-fired units and
                   associated utilities from which the sample was drawn.


                   Respondents to GAO'Squestionnaire indicated that enactment of acid
Results in Brief   rain legislation would provide a major impetus for considering using
                   clean coal technologies. Utilities plan to use the technologies at only 5


                   Page 2                      GAO/RCED-90-165   Potential   Use of Clean Coal Technologies
                         Executive   Summary




                         percent of their coal-fired units. However, should acid rain controls be
                         mandated, they would consider such technologies for as many as 50 per-
                         cent of their coal-fired units to reduce SO, emissions and 75 percent of
                         their units to reduce NO, emissions. Utilities indicated that their willing-
                         ness to consider specific technologies depends on the severity of emis-
                         sion reduction requirements, target dates for compliance, future power
                         generation requirements, their confidence in the technologies, and cost
                         considerations. Generally, the more stringent the requirements and the
                         more lead time to comply, the more clean coal technologies were consid-
                         ered viable options. They also indicated that they would favor other
                         options-such as switching to low-sulfur coal-in three of the four sce-
                         narios to achieve SO, emission reduction requirements. However, not all
                         coal-fired units would need to reduce emissions because up to 21 percent
                         already meet one or more of the scenarios.

                         Despite their potential, clean coal technologies may not contribute much
                         to the reduction of acid rain-causing emissions during the next 15 years.
                         Uncertainty about the commercial availability of the new technologies is
                         a key factor in determining when they could be widely deployed. Many
                         are expected to be commercially available between the mid-1990s and
                         2000, but this time frame could be optimistic based on the problems and
                         delays under the Clean Coal Technology Program in formalizing agree-
                         ments with project sponsors and getting demonstrations underway.
                         Even after the technologies are commercially available, utilities will
                         likely test them on one unit before installing them on others, and lead
                         time will be needed for ordering and manufacturing the technologies.
                         Thus, it could take another 5 to 10 years beyond the date of commercial
                         availability for the technologies to be widely deployed. Once they are
                         proven and widely deployed, however, they could play a major role in
                         combating acid rain.


Principal Findings

Technology Use Depends   GAO'Ssurvey showed that utilities plan to use clean coal technologies at
on Requirements          only 6 percent of their existing coal-fired units by the year 2010. How-
                         ever, should acid rain control requirements be mandated, utilities would
                         give much greater consideration to using these technologies. Some units
            Y            may not be affected because from 16 to 21 percent meet the SO, scena-
                         rios, and from 6 to 18 percent meet the NO, scenarios.



                         Page 3                      GAO/RCED-90-165   Potential   Use of Clean Coal Technologies
                         Executive   Summary




                         Utilities’ interest in clean coal technologies to meet SO, emission require-
                         ments seemed to be linked more to the time frames for compliance than
                         the level of reductions to be met. For example, utilities would consider
                         using the technologies to achieve SO, reductions at up to 51 percent of
                         their coal-fired units under a 2004 compliance date, but only at up to 25
                         percent of their units under a 1997 deadline. However, many utilities
                         would also consider conventional options and technologies, such as
                         switching to low-sulfur coal (at up to 46 percent of their units) and
                         installing conventional flue gas scrubbers (at up to 36 percent of their
                         units) to meet GAO'Sscenarios for reducing SO, emissions.

                         Utilities’ interest in clean coal technologies for NO, control was more
                         directly related to the severity of emission requirements than to the tim-
                         ing of compliance dates. Utilities would consider such technologies to
                         reduce NOXemissions at up to 67 percent of their coal-fired units under
                         the moderate emission reduction scenarios and at up to 77 percent of
                         their units under the stringent scenarios. This may stem from some utili-
                         ties’ high level of confidence in the potential application of some of the
                         NO, reduction technologies currently being pursued by industry.


Demonstration Projects   Although DOEand the coal industry believe clean coal technologies may
Behind Schedule          be less costly and environmentally superior to conventional technolo-
                         gies, the new technologies have not been successfully demonstrated on a
                         commercial scale. Utilities have expressed concerns about the technical
                         feasibility and cost effectiveness of many of the technologies and
                         whether they will be able to achieve expected emission reductions.

                         According to utility and coal industry estimates, the new technologies
                         should be demonstrated and available for commercial order between
                         1995 and 2000. These estimates generally assume that DOE'SClean Coal
                         Technology Program will be fully funded and that the demonstration
                         projects will be completed successfully and on schedule. However, some
                         demonstration projects under DOE'Sprogram are behind schedule.

                         DOEhas conducted three solicitations (rounds) for project proposals
                         under its program and has two more planned. As of April 30, 1990,
                         cooperative agreements had been completed for 19 of the 38 projects in
                         the program, but only 3 projects had progressed to the demonstration
                         phase. In March 1989, GAOreported that DOEexperienced major delays
                         in negotiating agreements with round-one project sponsors, and three
                         projects withdrew from the program because of sponsors’ difficulties in



                         Page 4                     GAO/RCED-90-166   Potential   Use of Clean Coal Technologies
                          Executive   Summary




                          completing project financing and other business arrangements. GAO'Sfol-
                          low-up work showed that these problems have continued under round
                          two of the program. DOEhas recently taken steps to shorten the process.

                          GAOalso reported that seven funded round-one projects were experienc-
                          ing coordination, equipment, and financing problems that caused delays
                          in completing project phases and extensions of some completion dates-
                          which could delay the successful demonstration of some technologies.
                          Two funded projects dropped from the program in June 1989 and Janu-
                          ary 1990 because of financing problems. In March 1990 GAOreported
                          that over half of the round-two projects were rated weak by DOEin their
                          potential to reduce nationwide emissions. GAOsuggested that the Con-
                          gress consider delaying the final two rounds of projects until DOEobtains
                          more results from demonstration projects already in the program. This
                          would allow DOEto target the remaining program funds to the more
                          promising technologies.


5 to 10 Years Needed to   According to DOEand utility and coal industry estimates, it may take 5
Deploy Technologies       to 10 years for clean coal technologies to penetrate the market once they
                          are proven and available for commercial order. This time span is needed
                          for utilities to develop confidence in the new technologies and to provide
                          the necessary lead time for ordering, designing, manufacturing,
                          obtaining, and installing the technologies. Utilities’ willingness to invest
                          in the new technologies could also be influenced by their concerns about
                          whether they will be allowed to recover their investment costs.


                          GAOis not making recommendations. However, the information      in this
Recommendations           report should be useful during congressional deliberations on acid rain
                          control proposals in providing some perspective on how utilities might
                          react to different emission reduction requirements and compliance
                          dates.


                          GAOdiscussed the information in this report with DOEofficials and incor-
Agency Comments           porated their comments where appropriate. They generally agreed with
                          the accuracy of the information presented relating to the Clean Coal
                          Technology Program. However, as requested by the Chairman’s office,
              *           GAOdid not obtain official agency comments on a draft of this report.




                          Page 5                     GAO/RCED-90-165   Potential   Use of Clean Coal Technologies
Contents


Executive Summary                                                                                                2

Chapter 1                                                                                                        8
Introduction             The Problem of Acid Rain and the Electric Utility
                             Industry
                                                                                                                 8

                         The Clean Coal Technology Program                                                    9
                         Proposed Acid Rain Control Legislation and Clean Coal                               11
                             Technology
                         Objectives, Scope, and Methodology                                                  11

Chapter 2                                                                                                    15
Few Utilities Plan to    Acid Rain Controls Would Increase Interest in Clean Coal
                             Technologies
                                                                                                             15
Use Clean Coal           Potential Use of Clean Coal Technologies to Meet                                    20
Technologies, but            Increased Demand for Electricity
                         Conclusions                                                                         22
Many Would Consider
Them to Meet Acid
Rain Control Mandates
Chapter 3                                                                                                    24
Clean Coal               Technologies Need to Be Successfully Demonstrated
                         Widespread Deployment May Take 5 to 10 Years After
                                                                                                             24
                                                                                                             26
Technologies Are                Technologies Are Proven
Unlikely to Contribute   Other Concerns That Could Affect Utilities’ Willingness to                          27
Significantly to Acid           Invest in Clean Coal Technologies
                         Utilities’ Views on Incentives for Using New Technologies                           30
Rain Reduction in the    Views of DOE Officials                                                              31
Next 15 Years            Conclusions                                                                         32

Appendixes               Appendix I: Description of Clean Coal Technologies                                  34
                         Appendix II: Sampling Methodology                                                   38
                         Appendix III: Copy of GAO’s Questionnaire Sent to                                   40
                             Utilities
                         Appendix IV: Options That Would Be Considered at Coal-                              53
                             Fired Units to Achieve SO, Reductions Under GAO’s
                             Scenarios
                         Appendix V: Options That Would Be Considered at Coal-                               57
                             Fired Units to Achieve NO, Reductions Under GAO’s
                             Scenarios


                         Page 6                    GAO/RCED-90-186   Potential   Use of Clean Cod Technologies
\         Contents




          Appendix VI: Major Contributors to This Report                                         60


Tables    Table 1.1: Questionnaire Scenarios for Acid Rain Control                               12
              Requirements
          Table 2.1: Options That Utilities With Coal-Fired Units                                21
              Would Consider to Meet Demand Growth
          Table 3.1: Incentives That Would Most Encourage                                        31
              Utilities With Coal-Fired Units to Invest in Clean Coal
              Technologies
          Table II. 1: Total Number of Utilities and Generating Units                            39
              in Each Stratum of GAO’s Sample and the Number
              Sampled

Figures   Figure 2.1: Utility Responses to Sulfur Dioxide Emission                               17
               Reduction Options
          Figure 2.2: Utility Responses to Nitrogen Oxide Emission                               19
               Reduction Options




          Abbreviations

          CCT         Clean Coal Technology
          DOE         Department of Energy
          EPA         Environmental Protection Agency
          GAO         General Accounting Office
          NO,         nitrogen oxides
          NSPS        New Source Performance Standards
          PSD         Prevention of Significant Deterioration
          SO,         sulfur dioxide


          Page 7                       GAO/RCED-90-165   Potential   Use of Clean Cod Technologies
Chapter 1
                                                                                                                          ,
Introduction


                        About 20 million tons of sulfur dioxide (SO,) emissions and about 20
                        million tons of nitrogen oxides (NO,,) emissions are released into the
                        atmosphere in the United States every year. These pollutants contribute
                        to the formation of acid rain. Although there has been a decrease in SO,
                        emissions since the 1970s electric utilities burning fossil fuels account
                        for about two-thirds of the nation’s SO, emissions. The combustion of
                        automotive fuels accounts for the largest share of NO, emissions, but the
                        utility sector NO, emissions increased by 40 percent from 1970 to 1983
                        and accounts for about one-third of NO, emissions.

                        Clean coal technologies are a family of emerging technologies that are
                        expected to reduce SO, and NO, emissions resulting from coal combus-
                        tion Many of these technologies will have industrial applications, but
                        their main contribution to emissions reductions will be at coal-fired gen-
                        erators operated by electric utilities.


                        Sulfur dioxide and nitrogen oxides undergo chemical changes in the
The Problem of Acid     atmosphere that convert them to their acidic forms. These acidic com-
Rain and the Electric   pounds are then returned to earth in rain or snow and as dry particles
Utility Industry        or gases, called acid rain. While the effects of acid rain have yet to be
                        fully quantified, there is concern that it may be potentially harmful to
                        the environment. For example, it is believed that acid rain may be dam-
                        aging lakes and streams and causing the loss of gamefish and other spe-
                        cies. A cause and effect relationship has not been proven between acid
                        rain and forest damage, but growth decline and premature tree death
                        have been documented in some areas where acid rain is present.
                        Another concern is that building materials (marble, limestone, paints,
                        and galvanized steel) can be eroded by exposure to acid rain. Finally,
                        although acid rain has no known direct effect on human health, there is
                        concern that acid rain can increase the levels of dissolved metals, such
                        as lead and mercury, in water.

                        The Department of Energy (DOE), electric utilities, and the coal industry
                        see the adoption of clean coal technologies as a way for utilities to
                        achieve long-term reductions in emissions that contribute to acid rain.
                        Current technology-basically,    conventional flue gas scrubbers-l
                        effectively removes SO, emissions but is costly, labor intensive, and cre-
                        ates waste-handling problems. Switching to natural gas or lower-sulfur

                        ‘Conventional flue gas scrubbing describes a number of processes for capturing sulfur dioxide. Basi-
                        cally, the utility’s flue gas is exposed to a wet lime or limestone compound which reacts with the
                        sulfur in the gas, leaving the cleaned gas to be expelled through the smokestack.



                        Page 8                               GAO/RCED-!M-166     Potential   Use of Clean Coal Technologies
                     Cha)pr     1
                     Introduction




                     coal may be a low-cost option for some utilities to reduce SO, emissions,
                     but if done on a wide scale, it could have an adverse economic effect in
                     areas that mine high-sulfur coal. Proponents of clean coal technologies
                     consider these technologies to be the best hope for achieving significant
                     emission reductions in the utility industry and for ensuring a continuing
                     market for our nation’s high-sulfur coal.


                     In 1984, the Congress set aside $750 million in the Energy Security
The Clean Coal       Reserve Fund to establish DOE’S Clean Coal Technology (CCT) Program.
Technology Program   The purpose of this government and industry cost-sharing program is to
                     assist industry in accelerating the commercialization of new clean coal
                     technologies by demonstrating that they burn coal more cleanly, effi-
                     ciently, and cost-effectively than current technologies. Under the pro-
                     gram, DOE can fund up to 50 percent of the cost of each project selected
                     for assistance. Industry and other nonfederal sources are expected to
                     provide the balance of project financing.

                     In December 1985, the Congress authorized DOE to use $400 million from
                     the Energy Security Reserve Fund for the first solicitation, or round one,
                     of the program. DOE issued the first solicitation for project proposals in
                     February 1986 and has 10 projects in the program from that solicitation.
                     The objective of round one was to demonstrate the feasibility and com-
                     mercial application of a broad slate of clean coal technologies to enhance
                     the use of coal for all market applications. We issued two reports2 and
                     testified twice” on round one of the program.

                     In March 1987, the administration announced plans to expand the CCT
                     Program on the basis of a January 1986 joint report by special U.S. and
                     Canadian envoys that made several recommendations to reduce environ-
                     mental problems associated with U.S. and Canadian transboundary acid
                     rain.4 Among other things, the envoys’ report recommended that the
                     United States implement a 5-year, $5-billion commercial demonstration
                     program in which the federal government and industry would each pro-
                     vide $2.5 billion to advance clean coal technologies that would be needed
                     for future acid rain control programs. The administration endorsed this

                     aFossil Fuels: Commercializing Clean Coal Technologies (GAO/RCED-89-80, Mar. 29, 1989) and Fossil
                     Fuels: Status of DOE-Funded Clean Coal Technology Projects as of March l&l989 (GAO/RCEDF
                     166FS, June 29,1989).
                     “Views on DOE’s Clean Coal Technology Program (GAO/T-RCED-88-47, June 22,1988) and Status of
                     DGlWunded Clean Coal Technology Projects (GAO/T-RCED-89-26, Apr. 13, 1989).
                     4Joint Report of the Special Envoys on Acid Rain (Jan. 1986).



                     Page 9                              GAO/RCED-90-105      Potential   Use of Clean Coal Technologies
Chapter 1
Introduction




recommendation by requesting $2.6 billion over a S-year period to
demonstrate new clean coal technologies. The administration also
announced that future demonstration projects would be selected, where
possible, to reduce acid rain-causing emissions from fossil fuel-burning
facilities.

DOE   issued its second solicitation for project proposals in February 1988
and selected 16 projects in September 1988 from the 66 proposals
received. (One of the 16 projects subsequently withdrew from the pro-
gram.) Following the recommendations of the joint U.S.-Canadian
envoys’ report, the objective of the round-two CCT Program was to select
projects that would demonstrate innovative clean coal technologies that
are (1) capable of being commercialized in the 199Os, (2) more cost-
effective than current technologies, and (3) capable of achieving signifi-
cant reductions of SO, and NO, emissions from existing coal-burning
facilities. We reported on the round-two selection process in March
1990.‘,

The third solicitation was conducted in May 1989, and 13 projects were
selected in December 1989 from the 48 proposals received. As of April
30, 1990, DOE and project sponsors had completed cooperative agree-
ments for 19 of the 38 projects in the CCT Program. DOEexpects to com-
plete the cooperative agreements for the 6 other round-one and-two
projects by July 1990 and the 13 round-three projects by December
1990.

The Congress has appropriated a total of $2.75 billion for the five
rounds of projects planned for the CCTProgram ($400 million for round
one, $676 million each for rounds two and three, and $600 million each
for rounds four and five). The Department of Interior and Related Agen-
cies Appropriations Act, Pub. L. No. 101-121, 103 Stat. 701 (1989)
directs DOEto issue the fourth solicitation for project proposals by June
1, 1990, and the fifth (final) solicitation by September 1, 1991. It also
directs DOEto select the round-four projects by February 1, 1991 and the
round-five projects by May 1, 1992.




“Fossil Fuels: Pace And Focus of the Clean Coal Technology Program Need to Be Assessed (GAO/
       _90 -67, Mar. 19, 1990).


Page 10                           GAO/RCED-90-165    Potential   Use of Clean Coal Technologies
                        Chapter 1
                        Introduction




                        Legislation to combat acid rain-causing emissions from power plants and
Proposed Acid Rain      other sources has been a key issue of debate in congressional efforts to
Control Legislation     amend the Clean Air Act. Numerous acid rain control bills were consid-
and Clean Coal          ered in the 100th Congress, and several have been introduced in the
                         1Olst Congress. In July 1989, the administration proposed amendments
Technology              to the Clean Air Act that would require annual reductions of SO, emis-
                        sions from fossil-fueled generators by about 10 million tons below 1980
                        levels and annual NO, emissions by 2 million tons below projected 2000
                        levels by December 3 1,200O. Several hearings have been held in both
                        the House and Senate on the administration’s proposal and other acid
                        rain control bills.

                        Acid rain control proposals share a common goal with clean coal tech-
                        nologies-the reduction of hazardous emissions into the atmosphere.
                        However, the extent that clean coal technologies would contribute to
                        emissions reductions, if acid rain control legislation were passed, is an
                        open question. These are developmental technologies, and uncertainties
                        remain as to (1) when they will be available, (2) whether they will be as
                        effective as expected, (3) whether acid rain control legislation would
                        promote or delay their development, and (4) how many utilities would
                        use them if legislation is enacted.


                        Concerned about the relationship between the CCT Program and poten-
Objectives, Scope,and   tial acid rain control legislation and the effectiveness of DOE’S strategy in
Methodology             demonstrating technologies that will reduce SO, and NO, emissions, the
                        Chairman, Subcommittee on Energy and Power, House Committee on
                        Energy and Commerce, requested that we examine (1) the extent to
                        which electric utilities plan to use clean coal technologies, and (2) how
                        such technologies could contribute to reducing acid rain.

                        To assess the likelihood that utilities will use clean coal technologies, we
                        developed a comprehensive questionnaire to collect information on (1)
                        utilities’ current plans to use clean coal technologies on specific power
                        generating units and (2) the options that would be considered for these
                        units if acid rain controls were mandated. We also asked utilities to iden-
                        tify incentives that would encourage them to invest in clean coal
                        technologies.

                        To determine how utilities might react to acid rain control requirements,
                        we included four hypothetical SO, and NOXemission reduction scenarios
                        in our questionnaire. We considered the acid rain control bills in the
                        100th Congress in developing the scenarios. The scenarios included both


                        Page 11                     GAO/RCED-90-166   Potential   Use of Clean Coal Technologies
                                           Chapter 1
                                           Introduction




                                           moderate and more stringent emission reductions by 1997 and 2004
                                           compliance dates. Our scenarios, which are summarized in table 1.1,
                                           asked utilities to indicate what options they would consider at specific
                                           generating units to reduce their systemwide SO, and NO, emissions by a
                                           specified percent below 1980 levels or to a target level stated in pounds
                                           per million British thermal units (lbs./MMBtus)--whichever requirement
                                           would be less stringent.

Table 1.1: Questionnaire Scenarios   for
Acid Rain Control Requirements                                          Compliance               Emission reduction      requirement’
                                           Scenario                             date          Sulfur dioxide                    Nitrogen     oxide
                                           1 Near-term moderate                 1997            35% or to 1 .O                    25% or to 0.6
                                                                                                IbsJMMBtus                        Ibs./MMBtus
                                           2 Near-term stringent                 1997           75% or to 0.8                     5Oi or to 0.4
                                                                                                IbsJMMBtus                         IbsJMMBtus
                                           3 Long-term moderate                  2004           35% or to 1 .O                    25% or to 0.6
                                                                                                Ibs./MMBtus                        Ibs./MMBtus
                                           4 Long-term stringent                 2004           75% or to 0.8                     50% or to 0.4
                                                                                                 Ibs./MMBtus                       Ibs./MMBtus
                                           aThe percentages refer to the extent that emissions would need to be reduced below 1980 levels.

                                           We distributed our questionnaire to utilities several months before the
                                           current administration announced its acid rain control proposal, Our
                                           scenarios for SO, emission reductions are more stringent than the admin-
                                           istration’s proposal, which essentially would require utilities to reduce
                                           SO, emissions from fossil fuel-fired steam electric generating units to 2.5
                                           lbs./MMBtus after December 31, 1995, and to 1.2 lbs./MMBtus after
                                           December 31, 2000. The administration’s proposal does not specify NO,
                                           emission limits for generating units but would require the Administra-
                                           tor, EPA,to establish NO, emission rates for utilities’ coal-fired steam
                                           electric generating units to meet after December 3 1, 2000. The adminis-
                                           tration’s proposal would also grant a 3-year extension (until December
                                           3 1, 2003) for generating units that will be repowered with a qualifying
                                           clean coal technology to comply with emission requirements. Our sce-
                                           nario 3 is the closest to matching the administration’s proposed SO,
                                           emission reduction requirement.F

                                           We obtained technical assistance from DOE, the Environmental Protec-
                                           tion Agency (EPA), two utility industry groups, and an environmental
                                           organization in developing our questionnaire and visited several utilities

                                           “In April 1990, the Senate approved amendments to the Clean Air Act (S. 1630,lOlst Gong., 2d
                                           Sess.),which contained emission reduction requirements that are generally consistent with the
                                           administration’s proposal. The emission requirements in the bill that the House approved on May 23,
                                           1990, are also generally consistent with the administration’s proposal.



                                           Page 12                              GAO/RCED-!WlSS      Potential   Use of Clean Coal Technologies
    Chapter 1
    Introduction




    to test the clarity of our questions, We reviewed literature on clean coal
    technologies and consulted DOEin identifying the following categories of
    clean coal technologies for utilities to consider in responding to our
    questionnaire:

l coal cleaning and upgrading,
9 advanced flue gas desulfurization,
l sorbent injection,
. low-NO, combustion,
. post-combustion NOXcontrol,
. gas cofiring/reburning,
9 combined SO,/NO, control,
l atmospheric fluidized-bed combustion,
. pressurized fluidized-bed combustion,
l slagging combustion, and
. integrated gasification, combined cycle.

    (These technologies are described in app. I.)

    For our questionnaire survey, we randomly sampled 480 of the nation’s
    1,503 fossil-fueled generating units that have at least 75 megawatts of
    generating capacity. The 1,503 units are operated by 190 utilities. Our
    sampled units included 307 coal-fired, 99 gas-fired, and 74 oil-fired gen-
    erating units operated by 138 utilities. We used a stratified sampling
    design to ensure that all of the utilities with a large number of units
    would be sampled, with a maximum of five units randomly selected for
    any one utility. (Our sampling methodology is discussed in more detail in
    app. II.)

    In January 1989, we sent our questionnaire (app. III) to the utilities that
    operated the sampled units. We received responses from 130 utilities,
    which provided us information on 94 percent of the sampled units. The
    responses showed that utilities would consider clean coal technologies
    primarily for coal-fired units. Therefore, this report discusses our sur-
    vey results for coal-fired units only. We received information from 99
    utilities on 291 (94 percent) of the 307 coal-fired units in our sample.
    These responses have been analyzed to develop estimates for the 876
    coal-fired units and 150 associated utilities in the universe from which
    the sample was drawn.

    To supplement the questionnaire data, we visited four utilities that have
    actively pursued clean coal technologies to discuss their experiences and
    interest in the technologies. We also met with DOEand EPAofficials and


    Page 13                    GAO/RCED-90-166   Potential   Use of Clean Coal Technologies
Chapter 1
Introduction




representatives of environmental groups, including the National
Resources Defense Council and Greenpeace, to discuss the potential use
of the technologies for reducing acid rain-causing emissions at power
plants and to obtain their perspectives on other issues.

Our work was performed from June 1988 through December 1989 in
accordance with generally accepted government auditing standards. We
discussed the information in this report with DOEofficials and incorpo-
rated their comments where appropriate. They generally agreed with
the accuracy of the information presented relating to the CCTProgram.
However, as the Chairman’s office requested, we did not obtain official
agency comments on a draft of this report.




Page 14                   GAO/RCED-SO-166   Potential   Use of Clean Coal Technologies
Chapter 2

FevvUtilities Plan to Use Clean Cod
Technologies,but Many Would Consider Them
to Meet Acid Rah Control Mandates
                         Our questionnaire survey revealed that few utilities currently have
                         plans to use clean coal technologies at their existing power generating
                         units to reduce emissions-or in building new power generation facili-
                         ties to meet future demand growth for electricity. However, should
                         there be a requirement to meet acid rain control mandates, utilities
                         would consider adopting clean coal technologies for as many as 50 to 75
                         percent of their coal-fired power generating units. The utilities’ willing-
                         ness to consider specific technologies depends on such factors as the
                         severity of required emission reductions, the target dates for compli-
                         ance, the utilities’ present and future power generation requirements,
                         and cost considerations. Utilities indicated that they would also weigh
                         the feasibility of other options, such as using conventional flue gas
                         scrubbing technology or switching to low-sulfur coal, to meet acid rain
                         controls. Some coal-fired units may not be affected by acid rain control
                         requirements because about 16 to 21 percent would already meet our
                         SO, emission reduction scenarios and about 6 to 18 percent would meet
                         our NO, emission reduction scenarios.


                         Information provided in response to our questionnaire indicated that
Acid Rain Controls       utilities have plans to use clean coal technologies at only about 5 percent
Would Increase           of their existing coal-fired generating units by the year 2010.1 Some of
Interest in Clean Coal   the technologies to be used on these units included low-NOX combustion,
                         gas cofiring, advanced flue gas desulfurization, sorbent injection, and
Technologies             combined SO,/NO,control.

                         We asked the utilities in our questionnaire survey whether they had
                         explored emission control options for the generating units in our sample
                         should acid rain control legislation be enacted. We asked those that had
                         explored such options to indicate what options they would most seri-
                         ously consider at the sampled units to meet the SO, and NO, emission
                         requirements under each of our scenarios. Our questionnaire listed clean
                         coal technologies as one of the options for reducing emissions. Some of
                         the other options included using conventional technologies to meet the
                         requirements, switching to low-sulfur coal, retiring the unit, or taking no
                         action at the sampled unit if the utility’s system already met our
                         scenario emission limits.

                         Our analysis of questionnaire responses showed that utilities have
                         explored emission control options at at least 80 percent of their coal-


                         ‘This estimate could range from 2.4 to 7.2 percent (see app. II).



                         Page 16                               GAO/RCED-90-166      Potential   Use of Clean Coal Technologies
                         Chapter 2
                         Few Utilities Plan to Use Clean Coal
                         Technologies,  but Many Would Consider
                         Them to Meet Acid Rain Control Mandates




                         fired units2 It also showed that many utilities would consider the future
                         use of clean coal technologies if they were required to meet acid rain
                         control requirements. Under our acid rain control scenarios, utilities
                         would consider using clean coal technologies at as many as half of their
                         coal-fired units to meet SO, emission limits and at as many as three-
                         fourths of their coal-fired units to meet NO, emission limits. However,
                         clean coal technologies were not the most frequently considered options
                         to meet acid rain control requirements in three of our four SO, emission
                         reduction scenarios, It should also be noted that in responding to our
                         scenarios, utilities indicated options they would seriously consider, but
                         their responses did not represent firm plans or commitments to use
                         clean coal technologies or other options.


Options That Would Be    Not all utilities would need to take action to reduce SO, emissions under
                         our scenarios. Questionnaire results indicate that about 21 percent of
Considered to Meet SO,   utilities’ coal-fired units would already comply under our moderate SO,
Scenarios                emission reduction scenarios, and about 16 percent would comply under
                         our more stringent scenarios.

                         As shown in figure 2.1, for those units where action would be consid-
                         ered, switching to low-sulfur coal was the most often cited method of
                         meeting the SO, emission reduction requirements in three of our four
                         scenarios. Utilities would consider switching to low-sulfur coal at 46
                         percent of their coal-fired units under both of the moderate emission
                         reduction scenarios, and at 39 percent of their units under both of the
                         stringent scenarios.

                         Only in our scenario of meeting stringent requirements by 2004 would
                         utilities choose clean coal technologies more often than other options.
                         Questionnaire results indicate that compared to conventional options,
                         clean coal technologies would be utilities’ second most frequently chosen
                         option to meet moderate reduction requirements for both 1997 and 2004
                         compliance dates, and third most frequently chosen option to meet strin-
                         gent requirements by a 1997 deadline. Given this latter scenario, utilities
                         indicated that they would switch to low-sulfur coal or use conventional
                         scrubber technology more often than using clean coal technologies.




                         2This estimate could range from 76.5 to 85 percent (see app. II).



                         Page 10                               GAO/RCED-90-166      Potential   Use of Clean Coal Technologies
                                            Chapter 2
                                            Few UtiRtleo Plan to use Clean coal
                                            Technologies, but Many Would Consider
                                            Them to Meet Acid Rain Control Mandates




Figure 2.1: Utility Responses   to Sulfur
Dioxide Emission Reduction      Option8
                                            100   Perwnt ot Cosl-f%ed Generating Units That Would Consider the Options

                                            90

                                            so

                                            70



                                            so

                                            40

                                            30

                                            20

                                            10

                                             0

                                                  Modorate             Stringent            Moderate                 Stringent
                                                  Reductions by        Reductions by        Reductions by            Reductions by
                                                  1897                 1997                 zoo4                     2004
                                                  Hypothetical Emission Requirements and Compllancs Datss

                                                          Adopt Clean Coal Technologies
                                                          Switch to Low-Sulfur Coal
                                                          Install Conventional Scrubber
                                                          Retire the Unit
                                                          Take No Action - Unit Meets Emission Targets



                                            For those utilities indicating an interest in using clean coal technologies
                                            to meet SO, emission requirements, the interest seemed to be linked
                                            more to the time frames for compliance than the level of reductions to
                                            be met. For example, our analysis showed that utilities would consider
                                            clean coal technologies for 41 and 51 percent of their coal-fired units
                                            under a 2004 compliance deadline, but only for 24 and 25 percent of
                                            their units under a 1997 compliance deadline. This suggests that utilities
                                            would be more apt to use clean coal technologies to meet SO, emission
                                            control mandates if they were given a longer time frame for compliance.
                                            The technologies most frequently cited as options for reducing SO, emis-
                                            sions were sorbent injection, advanced flue gas desulfurization, coal
                                            cleaning and upgrading, and combined SO,/NO, control. The level of
                                            interest in such technologies was not concentrated in any age group or
                                            size of generating units.



                                            Page 17                               GAO/RCED-90-166        Potential   Use of Clean Coal Technologies
                         chapter 2
                         Few Utlllties Plan to Use Clean Coal
                         Tecbnologiee,  but Mauy Would Consider
                         Them to Meet Acid l&in Control Mandate.9




                         Our survey results also indicated that utilities would consider the use of
                         conventional technologies to meet SO, emission requirements. For exam-
                         ple, utilities would consider installing conventional scrubber technology
                         at 18 and 15 percent of their coal-fired units under the 1997 and 2004
                         moderate emission reduction scenarios and at 36 and 30 percent of their
                         units under the 1997 and 2004 stringent scenarios. (App. IV includes
                         more information on our estimates of the extent that utilities’ coal-fired
                         units would be considered for various options to achieve the SO, emis-
                         sion requirements in each of our acid rain control scenarios.)

                         Officials at one of the utilities we visited have testified that acid rain
                         control legislation could influence some utilities to abandon clean coal
                         technology demonstration efforts and redirect funds that otherwise
                         would have been used for such technologies to investments in conven-
                         tional processes in order to meet SO, emission reduction requirements.
                         On the other hand, an official from an environmental organization told
                         us that acid rain control legislation could encourage some utilities to
                         invest in clean coal technologies because they would have added incen-
                         tive to explore all possible options for meeting SO, emission reduction
                         requirements.


Options That Would Be    Our questionnaire responses showed that the extent of the utilities’
Considered to Meet NO,   interest in clean coal technologies to control NO, emissions was more
                         directly related to the severity of targeted reductions than to the timing
Scenarios                of the compliance dates. As shown in figure 2.2, utilities would consider
                         using clean coal technologies to reduce NO, emissions at 53 percent of
                         their coal-fired units under the moderate, near-term scenario and at 57
                         percent of their units under the moderate, long-term scenario. Given
                         more stringent reduction goals, however, utilities would consider such
                         technologies to reduce NO, emissions at 72 percent of their units under
                         the near-term scenario and 77 percent of their units under the long-term
                         scenario. The questionnaire results indicate that about 18 percent of
                         utilities’ coal-fired units would already comply with the moderate NO,
                         emission reduction scenarios, and 6 percent would meet the stringent
                         scenarios.




                         Page 18                          GAO/lKXLHO-165   Potential   Use of Clean Coal Teclmologiee
  I

                                            chapter 2
                                            Few Utilities plan to Uee Clean Coal
                                            Teclmologle~, but Many Would Comider
                                            Them to Meet Acid Rain Control Mandatea




Figure 2.2: Utility Responrer to Nitrogen
Oxide Emirrlon Reduction Option8
                                            100   Poreant of Cval-Flmd Qrnomting Units That Would Con&k            the Optiona




                                                  Moderato             Stringent               Modwat~                  Stringent
                                                  Roductlona by        Radwtion8     by        Reductionr by            Reduotlona by
                                                  1987                 1897                    !am4                     2004
                                                  Hypothottcal EmimmionRoqulromrnts and Comptlanca Data

                                                          Use Clean Coal Technologies
                                                          Retire the Unit
                                                          Take No A&n       - Unit Meets Emission Targets



                                            Low-NO, combustion technology was by far the most frequently consid-
                                            ered clean coal technology for reducing NO, emissions. Other clean coal
                                            technologies that utilities considered were post-combustion NO, control,
                                            gas cofiring/reburning, and combined SO,/NO, control. (App. V includes
                                            more information on our estimates of the extent that utilities’ coal-fired
                                            units would be considered for various options to achieve the NO, emis-
                                            sion requirements in each of our acid rain control scenarios.)

                                            Low-NO, combustion is not really a single technology, but rather a vari-
                                            ety of applications of related technologies-for   example, low-NO, burn-
                                            ers and over-fire air, used independently or in combination.
                                            Questionnaire responses and discussions with utility officials revealed
                                            that some utilities consider certain low-NO, combustion applications to
                                            be currently available conventional technology, at least on newly con-
                                            structed boilers. Some utilities even indicated they would consider low-
                                            NOXcombustion a clean coal technology when applied to one of their
                                            units, while another application at a different unit would be considered


                                            Page 19                                 GAO/RCED-90-165         Potential    Use of Clean Coal Technologies
                         Chapter 2
                         Few Utilities Plan to Use Clean Coal
                         Technologies,  but Many Would Consider
                         Them to Meet Acid Rain Control Mandates




                         a conventional technology. Also, more than for any other clean coal
                         technology, utilities cited a high level of confidence in low-NO, combus-
                         tion as a reason for considering the technology for emission reduction.
                         Some utility representatives indicated that this high confidence in low-
                         NO, combustion was based on their experience with using the technol-
                         ogy on some boilers.


                         We asked the utilities in our questionnaire survey whether they
Potential Use of Clean   expected to experience demand growth by the year 2000 and, if so, how
Coal Technologies to     they would meet that growth. Nearly all of the utilities indicated that
Meet Increased           they did expect some increase in the demand for electricity; however,
                         the use of clean coal technologies was not the most often cited option in
Demand for Electricity   expanding their capacity to help meet this growth.

                         Table 2.1 shows the options we asked utilities to consider in answering
                         this question. As indicated, 70 percent of the utilities with coal-fired
                         units would be likely to rely on demand management and/or conserva-
                         tion to meet demand growth-this       was the most frequently checked
                         option. The second and third most frequently checked options were to
                         purchase power from a domestic provider and to build a new oil- or gas-
                         fired unit. Building a new coal-fired unit using clean coal technology
                         would be considered by 45 percent of the utilities and was the fourth
                         most cited option. Twenty percent of the utilities would consider using
                         clean coal technologies to increase capacity at existing units. (Some
                         clean coal technologies are designed to replace a major portion of an
                         existing plant, such as a boiler, with new power-generating equipment to
                         extend the plant’s life, increase its capacity, and reduce its emissions.)




                         Page 20                          GAO/RCED-90-165   Potential   Use of Clean Coal Technologies



                                                                   :,
                                          chapter 2
                                          Few Utilitiee Plan to Use Clean Coal
                                          Technologies,  but Many Would Coneider
                                          Them to Meet Acid Raiu Control Mandates




Table 2.1: Options That Utilities With
Coal-Fired Unite Would Consider to Meet                                                                                   Percent of utilities that
Demand Qrowth                             Option                                                                          would consider option0
                                          Gly on demand management and/or conservation                                                           70
                                          Purchase power from a domestic provider                                                                68
                                          Build a new oil- or gas-fired unit                                                                     60
                                          Build a new coal-fired unit using clean coal technology                                        -_____ 45
                                          Increase output at existing unit(s) that are operating below
                                             capacity                                                                                               43
                                          Increase capacity at existing units by means other than clean
                                             coal technology                                                                                        33
                                          Purchase power from a foreign supplier                                                                    21
                                          Build a new coal-fired unit without &an coal technology                                                   20
                                          US;~CI~ coal technology to increase capacity at existing
                                                                                                                                                    20
                                          aThe total exceeds 100 percent because many utilities indicated that they would consider more than
                                          one option. The numbers represent the percent of utilities that would be “very likely” or “fairly likely” to
                                          consider these options. The maximum sampling error is 6 percent.

                                          Although our questionnaire did not ask utilities to indicate why they
                                          would consider certain options over others in meeting demand growth,
                                          officials at some of the utilities we visited said that they expected
                                          demand growth in the next decade to be generally in the form of peaking
                                          demand (temporary periods of high demand) that would generally be
                                          met by purchasing power, construction of additional gas-fired turbines,
                                          and greater utilization of existing facilities. They indicated that there
                                          would be little need for construction of new coal-fired base-load capacity
                                          until after the year 2000.

                                          A June 1989 DOE report also concluded that there may be only limited
                                          need for construction of new coal-fired power plants through the year
                                          2000.:’ The report cited excess nuclear- and coal-fired generating capac-
                                          ity, high capital costs of new plant construction, and relatively slow
                                          growth in electric power demand as reasons for this forecast, The DOE
                                          report indicated that, instead of constructing new coal-fired power
                                          plants, utilities are expected to meet demand growth by increasing use
                                          of existing plant capacity, purchasing electric power from non-utility
                                          sources, constructing gas-fired units, and refurbishing aging units to
                                          extend their working lives. An August 1987 DOE report also indicated
                                          that some utilities are planning to operate their older generating units
                                          beyond the normal retirement date and to bring an increasing number of


                                          “Annual Outlook for U.S. Electric Power 1989 (DOE/Energy Information Administration, June 26,
                                          lB39).



                                          Page 21                                GAO/RCED-90-165       Potential   Use of Clean Coal Technologies
              Chapter 2
              Few Utilities Plan to Use Clean Coal
              Technologies,  but Many Would Consider
              Them to Meet Acid Rain Control Mandates




              gas turbines on line within the next decade.4 Other options include
              energy conservation and better load management.

              According to the DOE reports, these strategies would enable utilities to
              meet moderate or temporary demand increases with limited capital
              investment. For example, gas-fired units can be installed in relatively
              small increments of power and can be cost-effective even when operated
              intermittently. In contrast, the large scale and high capital cost of con-
              ventional coal-fired units makes them cost-effective only for continuous
              power generation.


              Our questionnaire responses show that while few utilities have current
Conclusions   plans to use clean coal technologies, as many as one-half to three-
              fourths of the utilities would consider using them on their coal-fired
              units to meet acid rain control mandates. Presently, utilities would be
              more inclined to use clean coal technologies to meet NO, emission
              requirements than SO, requirements. Given additional time to meet acid
              rain control mandates, utilities would probably make greater use of the
              technologies to meet SO, emission requirements. This appears to stem
              from utilities’ high level of confidence in low-NO, combustion, one of the
              clean coal technology options for NO, reduction, and utilities’ under-
              standing that clean coal technologies for SO, reduction are not yet
              proven but may be available in time to meet the long-term scenario
              requirements.

              In addition to potential acid rain legislation, increasing demand for
              power might stimulate the adoption of clean coal technologies in
              repowering applications and new construction. However, our question-
              naire responses indicate that utilities do not view clean coal technology
              as a primary tool for meeting increased demand in the near future.

              While the results of our questionnaire indicate that enactment of acid
              rain legislation will encourage utilities to consider clean coal technolo-
              gies, they should not be considered as indicative of the extent to which
              clean coal technologies or other conventional emission control options
              would be actually used at utilities’ coal-fired generating units. In
              responding to our questionnaire, utilities identified clean coal technolo-
              gies and other options they would consider in response to our emission
              control scenarios, but their responses did not necessarily represent firm

              41nventory of Power Plants in the United States 1986 (DOE/Energy Information Administration, Aug.
              11, 1987).



              Page 22                            GAO/RCED-96-166     Potential   Use of Clean Coal Technologies
chapter 2
Few Willties Plan to Use Clean Coal
Technologies, but Many Would Consider
Them to Meet Acid Rain Control Mandates




plans-nor a definite commitment-to      use the technologies and other
options. Furthermore, many other factors will affect how widely the
technologies are actually adopted. As discussed in chapter 3, clean coal
technologies have not been adequately demonstrated and may not be
commercially available in time to meet the utilities’ needs.




Page 23                          GAO/RCED-90-166   Potential   Use of Clean Coal Technologies
Chapter 3

Clean Coal TechnologiesAre Unlikely to         ’
Contribute Significantly to Acid Rti Reduction
in the Next 15 Years
                       Although acid rain control legislation may encourage utilities to give
                       much more consideration to using clean coal technologies, uncertainty
                       about their commercial availability-which        is contingent upon success-
                       ful demonstrations-is      a key factor in determining when the technolo-
                       gies could be widely deployed. Many of the emerging technologies may
                       be commercially available between the mid-1990s and 2000, however, it
                       may take another 5 to 10 years beyond the date of commercial readiness
                       for the technologies to penetrate the market. Consequently, at their cur-
                       rent pace of development and anticipated time tables for widespread
                       deployment, emerging clean coal technologies will probably not contrib-
                       ute significantly to the reduction of acid rain-causing emissions during
                       the next 16 years, Utilities’ willingness to invest in clean coal technolo-
                       gies could also be influenced by their concerns about whether they will
                       be able to recover the technologies’ costs and about what emissions stan-
                       dards the technologies will need to achieve.


                       Although DOE and the coal industry believe emerging clean coal technol-
Technologies Need to   ogies offer the promise of being both less costly and environmentally
Ek Successfully        superior to conventional technologies, the new technologies have gener-
Demonstrated           ally not been successfully demonstrated on a commercial scale. Several
                       of the utilities we visited expressed concerns about the technical feasi-
                       bility and cost effectiveness of many of the new technologies and about
                       whether they will be able to achieve expected emission reductions.

                       Industry spokesmen and reports have stated that a technology is not
                       successfully demonstrated until it has undergone multiple commercial
                       demonstrations addressing a wide range of boiler designs, fuel types,
                       and other operating variables. According to industry officials, potential
                       users of the technologies need a base of information and experience,
                       gained through multiple demonstrations, upon which to judge costs, effi-
                       ciency, reliability, and other issues when comparing clean coal technolo-
                       gies with conventional alternatives for reducing emissions. In this
                       regard, about 41 percent of the utilities with coal-fired units in our ques-
                       tionnaire survey indicated that having multiple demonstrations of the
                       technologies that seemed most promising was the best way to promote
                       the commercialization of clean coal technologies,

                       According to utility and coal industry estimates, the new technologies
                       are expected to be available for commercial order between 1995 and
                       2000. The less complex technologies, such as sorbent injection, are
                       expected by the mid-1990s, and the more complex technologies, such as



                       Page 24                    GAO/RCED-90-165   Potential   Use of Clean Coal Technologies
Chapter3
Clean Coal Technologhs  Are Uulilcely to
ContrIbute Signlfkantly to Acid Raiu
Rmhction in the Next 16 Years




pressurized fluidized-bed combustion, are expected by 2000. These esti-
mates generally assume that DOE’S CCT Program, which is a major effort
to expedite the demonstration of clean coal technologies on a commer-
cial scale, will be fully funded and that the selected demonstration
projects will be completed successfully and on schedule.

As of April 30, 1990,38 projects were in the CCT Program, including 16
that were being funded under cooperative agreements, 3 that were
awaiting the completion of a 30-day congressional review period before
their cooperative agreements could take effect, and 19 that were in vari-
ous phases of DOE’S process for formalizing cooperative agreements with
the project sponsors. Only 3 of the funded projects had progressed to the
demonstration (operation) phase and none were completed.

In our March 1989 report on the CCT Program, we pointed out that DOE
experienced difficulties in negotiating cooperative agreements with
round-one project sponsors, which delayed completing agreements for
five projects by up to 9 months and resulted in the termination of nego-
tiations for three projects.’ The delays were primarily attributable to the
time it took to resolve sponsors’ problems with project financing and
other business arrangements, including proprietary data rights,
Recently, a round-one replacement project was withdrawn from the pro-
gram because of the sponsor’s problems in completing agreements with
project participants. DOE has also experienced delays of 4 to 6 months in
completing round-two agreements, and one project withdrew because of
financing and other problems. In December 1989, the Secretary of
Energy directed DOE to streamline its review and approval process for
completing cooperative agreements. The Secretary stated that the
Department’s goal was to have the agreements completed within 1 year
after a project is selected.

Our March 1989 report and April 1989 testimony on the CCT program
also pointed out that seven of the nine funded round-one projects were
experiencing coordination, equipment, and financing problems that
caused delays in completing project phases, cost overruns, and proposed
project modifications.2 We stated that DOE had extended the demonstra-
tion completion date for two of the projects and expected to extend the
demonstrations of other funded projects that were behind schedule.


‘Fossil Fbels: Commercializing Clean Coal Technologies (GAO/RCED-89-80, Mar. 29, 1989).

“Status of DOE-Funded Clean Coal Technology Projects (GAO/T-RCED-89-25, Apr. 13, 1989).



Page 26                            GAO/RCED-96-166    Potential   Use of Clean Coal Technologies
                      Chapter 8
                      Clean @aI Tecbnologles Are Unlikely to
                      Contribute Significantly to Acid Rata
                      Reduction in the Next 15 Years




                      These problems could delay the successful demonstration of the technol-
                      ogies. In fact, two of the funded round-one projects dropped from the
                      program (in June 1989 and January 1990) because of financing
                      problems. Therefore, industry estimates of the time frame when the new
                      technologies should be commercially available may be optimistic for
                      some technologies.

                      Also, although the objective of the round-two CCTProgram was to place
                      greater emphasis on demonstrating technologies that are capable of
                      achieving significant reductions of SO, and/or NO, emissions, some of
                      the round-two demonstration technologies may have limited potential
                      for reducing nationwide acid rain-causing emissions. Our March 1990
                      report pointed out that 9 of the 16 round-two projects are to demon-
                      strate technologies that were rated weak by DOE’S evaluation Board in
                      their potential to reduce nationwide SO, and/or NO, emissions when
                      used at existing coal-burning facilities.” Given the current status of the
                      projects in the CCT Program, and in view of the nation’s current budget
                      constraints, we suggested that the Congress may want to have DOEdelay
                      the final two rounds of the program until it obtains additional demon-
                      stration results from projects already in the program. This would allow
                      DOEto target the remaining $1 billion that has already been appropri-
                      ated for rounds four and five of the program to the more promising
                      technologies and help ensure that program funds are used effectively
                      and efficiently.


                      Clean coal technologies would need to be widely deployed in order to
Widespread            achieve significant reductions in nationwide emissions from coal-fired
Deployment May Take   generating units. According to DOEand utility and coal industry esti-
5 to 10 Years After   mates, it may take 5 to 10 years or more for the technologies to pene-
                      trate the market once they are proven and available for commercial
Technologies Are      order. This time span is needed for utilities to develop confidence in the
Proven                new technologies and to provide the necessary lead time for ordering,
                      designing, manufacturing, obtaining, and installing the technologies.

                      Utilities are apt to move cautiously in applying the new technologies.
                      For example, according to industry officials and reports, utilities will
                      likely test the performance of a successfully demonstrated technology
                      on a single unit before installing it on other units. Utilities will also need
                      time to obtain the necessary state and federal permits and regulatory

                      “Fossil Fuels: Pace And Focus of the Clean Coal Technology Program Need to Be Assessed (GAO/
                             -90 _67, Mar. 19, 1990).


                      Page 26                           GAO/RCED-90-166     Potential   Use of Clean Coal Technologies
                          Chapter a
                          Clean Coal Technologies Are Unlikely to
                          Contribute Signlflcantly to Acid Rain
                          Reduction in the Next 15 Years




                          approvals at the powerplant sites where the new technologies will be
                          used.

                          The demand for the new technologies will also affect their future mar-
                          ket penetration. Currently, utilities’ emission control options are limited
                          to conventional processes, including flue gas scrubbing, coal switching,
                          and coal cleaning. Although these processes have limitations, they offer
                          advantages to the user that clean coal technologies cannot yet offer-
                          they are commercially tested and available, and they can reduce emis-
                          sions. Once clean coal technologies are available for commercial order,
                          utilities will have a broader range of emission control and power genera-
                          tion options to choose from, but the demand for the technologies will be
                          based on their efficiency and reliability, cost effectiveness, and emission
                          reduction capability in comparison with conventional options.


                          Utilities are concerned about whether they will be allowed to recover
Other Concerns That       the costs of emerging clean coal technologies and what emission stan-
Could Affect Utilities’   dards the technologies will need to achieve.
Willingness to Invest
in Clean Coal
Technologies

Uncertainty of Cost and   Although DOEexpects that the installation and operating costs for clean
Cost Recovery             coal technologies generally will be lower than conventional options, the
                          costs of the new technologies have not yet been determined. This places
                          a utility that chooses to use a clean coal technology at greater risk than
                          one that decides on a conventional technology or option that has more
                          established and predictable costs. The importance to utilities of choosing
                          the lowest-cost option was reflected in their responses to our question-
                          naire survey. About one-half of the respondents with coal-fired units
                          indicated that lower capital, operating, and maintenance costs would be
                          primary reasons to invest in clean coal technologies over conventional
                          alternatives. Officials at one of the utilities we visited said that they
                          would consider all available options but would only select a clean coal
                          technology if it was shown to be the lowest-cost option.

                          Utilities are also concerned about the uncertainty of recovering invest-
                          ment in clean coal technologies. A utility’s decision to invest in a clean
                          coal technology would need to satisfy the same criteria as any other



                          Page 27                          GAO/RCED-96-166   Potential   Use of Clean Coal Technologies
                      Chapter 3
                      Clean Coal Technologies  Are Unlikely to
                      Contribute Significantly to Acid Rain
                      Reduction in the Next 15 Years




                      investment in the generating plant for the public utility commission to
                      authorize the utility to recover the cost of bringing the new technology
                      on line. The utility would need to show that such investment was a pru-
                      dent and cost-effective decision. Some utility officials we met with
                      expressed concern that utilities planning to use emerging innovative
                      clean coal technologies in place of conventional technologies face a
                      greater risk that their costs may not be approved for recovery. One offi-
                      cial believed that utilities demonstrating innovative clean coal technolo-
                      gies should be allowed to receive an incentive rate of return on their
                      investment that would be more commensurate with the higher risk
                      taken for using unproven technologies in place of conventional technolo-
                      gies to reduce emissions.

                      Only a few states have developed specific incentives to allow utilities to
                      recover demonstration costs for clean coal technologies, and none has
                      specifically approved a cost recovery policy for commercial applications
                      of the technologies. At least two states (Florida and Ohio) have devised
                      programs to allow for an accelerated recovery of demonstration costs.
                      Indiana has passed a law that allows utilities engaged in clean coal tech-
                      nology demonstration projects to obtain preapproval of the prudency of
                      expenditures and to qualify for accelerated depreciation and recovery of
                      preconstruction costs, among other things. About 27 percent of the utili-
                      ties with coal-fired units in our questionnaire survey indicated that
                      increased flexibility by public utility commissions on cost recovery
                      would be an incentive to invest in clean coal technologies.


Concerns About        Utilities are also concerned about the emission standards that existing
Applicable Emission   generating units will be required to meet if they install clean coal tech-
                      nologies on the units and about whether the new technologies will be
Standards             able to achieve the required standards.

                      EPAregulations require that fossil fuel-fired steam generating units of
                      more than 73 megawatts that began construction after August 17,1971,
                      must meet New Source Performance Standards (NSF'S)for controlling
                      emissions.4 Generating units that began construction before that date
                      are exempt from these standards but may become liable for meeting
                      them if the units are modified. Generally, an exempt unit must meet NSF%

                      4New Source Performance Standards were established by EPA under the Clean Air Act Amendments
                      of 1970, Pub. L. No. 91-604,84 Stat. 1676 (1970). Pursuant to the Clean Air Act Amendments of
                      1977, Pub. L. No. 96-96,91 Stat. 686 (1977), EPA promulgated more stringent regulations for fossil
                      fuel-fired steam generating units of more than 73 megawatts that began construction after September
                      18, 1978.



                      Page 28                             GAO/RCED-96-166     Potential   Use of Clean Coal Technologies
Chapter 3
Clean Coal Technologiee Are Unlikely to
Contribute Significantly to Acid Rain
Reduction in the Next 16 Yeara




if the unit’s physical structure or operation is changed and results in
increased emissions, or if a substantial portion of the unit is replaced at
a cost that exceeds 60 percent of the cost of building a comparable new
unit.

According to utility industry spokesmen, utilities are concerned that EPA
may require previously-exempt generating units to meet NSF%and/or the
emissions limitation requirements of the Prevention of Significant Dete-
rioration (PSD)Program if the units are modified to demonstrate clean
coal technologies.” Although DOEhas reported that emerging clean coal
technologies offer the promise of being environmentally superior to con-
ventional technologies, utilities are concerned that some technologies
may not be able to achieve NSPSand PSD requirements.

This concern over modifying existing units has been heightened by an
October 14, 1988, EPAdetermination that the Wisconsin Electric Power
Company would have to meet NSPSand PSD limitations at several units it
planned to refurbish. Although this case does not involve clean coal
technology, the utility industry views it as a potential precedent for
requiring existing units refurbished with clean coal technologies to meet
NSPSand PSD limitations. According to DOE and utility industry spokes-
men, this concern could discourage some utilities from participating in
the CCT Program or demonstrating clean coal technologies without fed-
eral assistance. DOE advised a congressional subcommittee in August
1989 that several industrial participants in the CCTProgram had indi-
cated that they would abandon their demonstration projects if it
appeared that their efforts would become subject to NSPS and PSD
requirements. According to DOE, uncertainty over the outcome of this
case contributed to a first-round project being withdrawn from the CCT
Program.

The Wisconsin Electric Power Company appealed EPA’Sruling, and on
January 19, 1990, a federal appeals court affirmed EPA’Sdecision that
the company’s power-plant in question was subject to NSF%The court
also held that EPAhad not properly supported its decision to impose PSD
requirements on the units in question, The case was returned to EPAfor
further consideration.




“The PSD Program, which was established pursuant to the 1977 amendments to the Clean Air Act,
can impose more stringent emission limitations on newly constructed or modified generating units
than NSPS to prevent the deterioration of air quality.



Page 29                             GAO/RCED-90-166     Potential   Use of Clean Coal Technologies
                       Chapter 3
                       Clean Coal Technologies  Are Unlikely to
                       Contribute Significantly to Acid Rain
                       Reduction in the Next 16 Years




                       EPAgranted an exemption from NS?Sand PSDrequirements in February
                       1989 for a powerplant unit demonstrating a clean coal technology and
                       has indicated that it will continue to consider such exemptions on a case-
                       by-case basis. However, the utility industry is concerned that generating
                       units that are modified to demonstrate clean coal technologies will be
                       subject to the more stringent emission standards after the demonstra-
                       tions end, even if the technologies are removed. There is also concern
                       that the EPAexemption does not protect a utility from legal action that
                       private citizens might take under the Clean Air Act if emission levels
                       should increase at the generating unit during or after the demonstration.
                       The administration’s proposal to amend the Clean Air Act includes pro-
                       visions that would exempt clean coal technology demonstration projects
                       from meeting NSPSand PSDrequirements as long as emission levels do not
                       increase above the generating unit’s predemonstration emission level.

                       Utility officials are also concerned about whether clean coal technolo-
                       gies used in new plant construction will be able to achieve NSPSor, if
                       applicable, the best available control technology emission requirements
                       of the PSDprogram. In addition, since the new technologies are still being
                       developed, there is uncertainty as to what technologies will be used to
                       establish the best available control technology emission requirements.

                       Officials at a utility that had plans to demonstrate a clean coal technol-
                       ogy on an existing generating unit told us that they experienced difficul-
                       ties in negotiating emission levels that the unit would be required to
                       attain. They said that the state and federal environmental agencies
                       attempted to apply the best available control technology emission
                       requirements of the PSDprogram to this unit, but the utility argued that
                       the technology was experimental and there was no similar technology to
                       use as a basis for establishing more stringent emission levels than those
                       required under NSPS.According to these officials, before this issue was
                       resolved, the utility cancelled its demonstration plans because of finan-
                       cial reasons. This demonstration proposal had been selected as an alter-
                       nate project under round one of DOE'SCCTProgram.


                       We asked the utilities in our questionnaire survey to identify up to three
Utilities’ Views on    incentives from a list of choices that we provided that would most
Incentives for Using   encourage them to invest in a clean coal technology. The incentives that
New Techn+ogies        were indicated most often involved cost considerations, as shown in
                       table 3.1.




                       Page 30                           GAO/RCED-30-166   Potential   Use of Clean Coal Technologies
                                            Chapter 3
                                            Clean Coal Technologies Are Unlikely to
                                            Contribute Signifkantly to Acid Rain
                                            Reduction in the Next 15 Years




Table 3.1: Incentives That Would Most
Encourage Utilities With Coal-Fired Unlta                                                                                 Percent of utilities that
to Invest In Clean Coal Technologies                                                                                      would be motivated by
                                            Incentive                                                                                   incentivea
                                            Lower capital costs than conventional technologies                                                    53
                                            Lower operating and maintenance costs than conventional
                                                technoloaies                                                                                         42
                                            Extended compliance dates, if acid rain control legislation is
                                                enacted, for utilities using clean coal technology                                                   35
                                            Relaxed emission reduction targets, if acid rain control
                                            --- legislation is enacted, for utilities using clean coal technology                                    30
                                            Public utility commission flexibility on cost recovery                                                   27
                                            Additional commercial demonstrations                                                                     21
                                            Tax credits        -                                                                                     17
                                            Less stringent NSPS standards for utilities using clean coal
                                               technology
                                            .~~_.              ___..                                                                                 14
                                            Government cost-sharina                                                                                  15
                                            Government grants    .---.                                                                               10
                                            Other                                                                                                     7

                                            aThe total exceeds 100 percent because utilities were asked to select up to three incentives. The maxi-
                                            mum sampling error is 6 percent.


                                            Next to lower capital, operating, and maintenance costs, utilities indi-
                                            cated that favorable treatment for using clean coal technologies to meet
                                            acid rain control requirements and for recovering costs would enhance
                                            the likelihood that they would invest in a new technology. As previously
                                            mentioned, the administration’s acid rain control proposal provides a 3-
                                            year extension to meet emission requirements for generating units that
                                            will be repowered with a qualifying clean coal technology. The adminis-
                                            tration’s proposal also includes other regulatory incentives to promote
                                            the development and use of clean coal technologies that limit power
                                            plant emissions.

                                            About 21 percent of the utilities would be encouraged to invest by more
                                            commercial-scale demonstrations of the technologies. Only 14 percent
                                            would be encouraged by less stringent NSPS standards. A few utilities
                                            indicated that direct government financial assistance in the form of
                                            grants, cost-sharing, or tax credits would provide added incentive for
                                            them to invest in a clean coal technology.


                                            In commenting on the results of our review, DOE officials said that the
Views of DQE Officials                      emissions trading concept in the proposed legislation to amend the Clean
                                            Air Act would provide an economic incentive for some utilities to reduce
                                            their powerplants’ emissions as much as possible below the limitations


                                            Page 31                               GAO/RCED-!MJ-165     Potential    Use of Clean Coal Technologies
                                                                                                               I
              Chapter 3
              Clean Coal Technologies  Are Unltkely to
              ContrIbute Significsmly to Acid Rain
              Reduction in the Next 16 Years




              by using the cleanest technologies available so that they could accumu-
              late emission credits that could be used to expand their systemwide
              capacity or to sell to other utilities that may not be able to meet emission
              limitations. The officials indicated that the emissions trading concept
              could provide an additional incentive for utilities to adopt clean coal
              technologies and that if the utilities had known about this concept
              before completing our questionnaire, some may have responded differ-
              ently to the options they would consider for reducing their emissions.


               Emerging clean coal technologies have not been proven successful on a
Conclusions    commercial scale. As a result, their technical feasibility, cost effective-
               ness, and emission control capability relative to conventional options
               have not been established. Although industry estimates indicate that
               many of the new technologies should be proven and available for com-
               mercial order by the mid- to late-1990s, this time frame could be some-
              what optimistic based on the problems and delays experienced under
               DOE’sCCTProgram in formalizing cooperative financial assistance agree-
               ments with project sponsors and completing funded demonstration pro-
              ject phases. Five projects under the CCTProgram were withdrawn during
              the cooperative agreement formalization process, and two of the funded
              demonstration projects were dropped from the program because of
               financing and other problems.

              Utilities’ decisions to invest in emerging clean coal technologies will
              depend in large part on their confidence in how the new technologies
              will compare to conventional technologies and other options, whether
              they will be able to recover their investment costs, and the emission
              standards they will be required to meet.

              Because of the time needed for demonstration and deployment, emerg-
              ing clean coal technologies may play only a limited role in reducing acid
              rain-causing emissions from coal-burning power plants in the next 15
              years. However, once the new technologies are successfully demon-
              strated and widely deployed, they could play a major role in addressing
              the acid rain problem.




              Page 32                           GAO/RCED-99-165   Potential   Use of Clean Coal Technologies
Page 33   GAO/RCED-90-166   Potential   Use of Clean Coal Technologies
Appendix I

Description of Clean Coal Technologies


                    This appendix provides a brief description of emerging clean coal
                    technologies.


                    Coal-preparation and-cleaning processes upgrade the fuel by removing
Coal Cleaning and   sulfur from coal before the coal reaches the boiler. Physical and chemi-
Upgrading           cal cleaning are the two most common means of coal upgrading. Physical
                    cleaning removes a portion of the ash and sulfur, and chemical cleaning
                    is needed to remove organically bound sulfur and inorganically com-
                    bined sulfur. The extent to which the ash and sulfur can be reduced
                    depends on the characteristics of the coal and the way it is processed.

                    The benefits of coal cleaning and upgrading go beyond emission reduc-
                    tions. In some cases, the lowered sulfur and ash reduces scrubbing and
                    waste disposal costs and mitigates the accumulation of ash in the boiler.
                    The enhanced heating value and improved consistency benefit boiler
                    operation and performance.


                    Advanced flue gas desulfurization technologies are designed to remedy
Advanced Flue Gas   many of the problems associated with conventional scrubbers. With con-
Desulfurization     ventional scrubbers, sulfur oxides are removed from flue gas by “scrub-
(Scrubbing)         bing” the gas with an alkaline slurry. The advanced technologies include
                    a process that has the potential to produce a salable byproduct rather
                    than waste sludge and another process that, in addition to SO, reduc-
                    tions, achieves NO, reductions.


                    Sorbent injection includes a variety of proposed technologies for inject-
Sorbent Injection   ing dry sorbentsl into the furnace or into flue gas ducts to remove sulfur
                    dioxide. Dry sorbent processes are expected to be less costly than
                    scrubbers.

                    The limestone injection multistage burner is expected to reduce sulfur
                    dioxide by injecting dry limestone sorbent into the boiler above the
                    burners. The calcium sulfate that forms travels through the boiler and is
                    removed along with the fly ash in the existing particulate removal
                    equipment. NO, formation is controlled by staged combustion.



                    ‘Sorbents are chemical compounds which are used to react with pollutants to form a solid which is
                    then removed from the system.



                    Page 34                             GAO/RCED-90-166     Potential   Use of Clean Coal Technologies
                      Appendix I
                      Description of Clean Coal Technologies




                      In-duct sorbent injection avoids the corrosion problems associated with
                      furnace sorbent injection because it bypasses the furnace. A dry sorbent
                      is injected into the flue gas where it combines with sulfur dioxide to be
                      captured in the removal equipment.


                      Low-NO, combustion involves redesigning burners or rearranging air
Low-NO, Combustion    flow through the furnace to reduce flame temperature, which reduces
                      the formation of nitrogen oxides.

                      Two low-NO, combustion techniques, low-NO, burners and over-fire air,
                      can be used independently or in combination. Low-NO, burners reduce
                      NO, emissions by promoting a more gradual mixing of fuel and air to
                      reduce flame temperature, and they use a richer fuel-air mixture to
                      reduce oxidation of nitrogen in the fuel. Over-fire air reduces NO, for-
                      mation by removing some of the excess air from the burner flame zone
                      and reintroduces it later in the combustion area, away from the high
                      temperature flames.

                      Other low NO, combustion techniques include fuel reburning and fuel
                      biasing (readjusting the fuel mixture to different sections of the furnace
                      to control NO, formation).


                      Post-combustion NO, control may potentially achieve greater NOXemis-
Post-Combustion NO,   sion reductions than low-NO, combustion. The two primary approaches
Control               in this category are selective noncatalytic reduction and selective cata-
                      lytic reduction.

                      Selective noncatalytic reduction involves injection of nitrogen com-
                      pounds into the flue gas, which causes NO, to be reduced to water and
                      nitrogen. The selective catalytic reduction process is similar except that
                      reactions take place in the presence of a catalyst. Selective catalytic
                      reduction promises greater NO, reductions than selective noncatalytic
                      reduction but at greater cost.


                      Gas cofiring and reburning refer to processes that inject natural gas into
Gas Cofiring/         the furnace to reduce SO, or NO, emissions.
Reburning 1
                      In cofiring applications, natural gas is injected into the furnace along
                      with pulverized coal, permitting a reduction in SO, emissions to the
                      extent that less coal is being burned. Application of the technology is


                      Page 35                            GAO/RCED-90-165   Potential   Use of Clean Coal Technologies
                                                                                                                           ,
                         Appendix I
                         Description of Clean Coal Technologies




                         dependent upon the type of boiler in place and requires additional con-
                         trols and maintenance.

                         In gas reburning, fuel is bypassed around the main combustion zone and
                         injected above the main burners to form a reducing zone in which NO, is
                         converted to reduced nitrogen compounds. About 15 to 20 percent of the
                         fuel is injected into this reburning zone.


Combined SO,/NO,         proposed. One approach would combine SO, and NO, removal by inject-
Control                  ing a sorbent into the flue gas to reduce SO, and injecting ammonia into
                         the boiler to control NO, formation.

                         In another approach, heated flue gas and a small amount of ammonia
                         would be combined in a reactor, converting the NO, to nitrogen and
                         water vapor. The gas would then pass through additional processes in
                         which SO, is ultimately converted into a saleable sulfuric acid by-prod-
                         uct. Because no sorbents are used, no waste by-products would be
                         formed.


Atmospheric              with a sorbent in a heated bed. The bed is fluidized-or  held in suspen-
Fluidized-Bed            sion-by injecting air, causing the mixture to agitate much like a boiling
Combustion               fluid. During combustion, the coal reacts with the sorbent to reduce SO,
                         emissions, and the low operating temperature reduces NO, formation.


                         Another approach to fluidized-bed combustion technology is pressuriza-
Pressurized Fluidized-   tion of the furnace. Performing much like a pressure cooker, pressurized
Bed Combustion           fluidized-bed combustion produces steam more efficiently than an
                         atmospheric fluidized-bed combustion unit. The pressurized system
                         operates at higher pressures and therefore can be much more compact
                         than the atmospheric system. Pressurized fluidized-bed combustion,
                         which operates in a combined cycle configuration-using      both a steam
                         turbine and a combustion turbine-offers    the potential for greater fuel
                         efficiency.


                         Slagging combustion technology uses cylindrical cyclone combustors
Slagging Coltnbustion    that are mounted on the furnace, replacing conventional burners. The
                         combustor mixes coal, sorbent (limestone), and air; provides ignition;


                         Page 36                             GAO/RCED96-166   Potential   Use of Clean Coal Technologies
                 Appendix I
                 Description of Clean Cd   Technologies




                 and removes ash before discharging the combustion products to the
                 boiler. Sulfur oxides are controlled by limestone injection into the com-
                 bustor, and NO, is controlled by staged combustion.

                                                                                                              -
                 The integrated gasification, combined cycle process centers around two
Integrated       elements. First is a gasification plant which converts coal into combusti-
Gasification,    ble gas; other equipment purifies the gas. Second is a combined-cycle
Combined Cycle   power plant in which the gas fuels a combustion turbine whose hot
                 exhaust gases are used to generate steam which drives a steam turbine.




                 Page 37                            GAO/RCED-90-166   Potential   Use of Clean Coal Technologies
Appendix II

Sampling Methodology


              For our questionnaire survey, we collected information on utilities’ cur-
              rent plans to use clean coal technologies on specific fossil fuel-fired gen-
              erating units and the options they would consider for these units to meet
              the SO, and NOXemission reduction requirements of our four acid rain
              control scenarios. Our sampling approach enabled us to apply the results
              of our questionnaire responses to the universe of generating units and
              associated utilities from which the sample was drawn, This appendix
              describes how we selected our sample of utilities and generating units to
              include in our questionnaire survey.

              Working with the Energy Information Administration’s computer-gener-
              ated 1987 Annual Electric Generator Report, we identified 1,503 fossil-
              fueled (coal-, gas-, and oil-fired) generating units in the United States
              that have a name plate capacity of at least 75 megawatts. The 1,503
              units were operated by 190 utilities. We limited our questionnaire sur-
              vey to generating units with at least 75-megawatt capacity because the
              larger units would be more likely to use clean coal technologies.

              To select our sample generating units, we first identified three groups,
              or universes, of utilities-those   with coal-fired units, those with gas-
              fired units, and those with oil-fired units. Utilities that used more than
              one of these types of fuel were included in more than one universe. We
              then used a stratified two-stage cluster sampling methodology to select
              138 of the 190 utilities and 480 of the 1,503 fossil-fueled generating
              units to include in our questionnaire survey. The 480 units included 307
              coal-fired units, 99 gas-fired units, and 74 oil-fired units.

              For example, to sample 307 of the 876 coal-fired generating units in our
              universe, we first identified 150 utilities that had one or more coal-fired
              units. We then divided this universe into two groups, or strata. The first
              stratum consisted of utilities that had many (nine or more) coal-fired
              units, and the second stratum consisted of utilities that had fewer (eight
              or less) coal-fired units. We selected all of the utilities in the first stra-
              tum (41 out of 41) and then randomly selected two to five generating
              units for each of these utilities. We confined our sample to no more than
              five units per utility to limit the utility’s work in responding to our ques-
              tionnaire. We randomly selected utilities in the second stratum (65 out
              of 109) and then randomly selected one to four generating units for each
              of the 65 selected utilities. We followed a similar procedure in selecting
              utilities with gas- and oil-fired generating units and in selecting units
              operated by those utilities to include in our questionnaire survey.




              Page 38                     GAO/RCED-90-166   Potential   Use of Clean Coal Technologies
                                           Appendix    II
                                           sanlpling   Mt3thodology




                                           A comparison of the total number of utilities and generating units in
                                           each stratum and the number included in our sample from each stratum
                                           are shown in table II. 1.

Table 11.1:Total Number of Utilities and
Oeneratlng Units in Each Stratum of                                                                                    Number of generating
GAO’s Sample and the Number Sampled                                               Number of utilities                            units
                                           Stratum                                in stratum   sampled                  in stratum     sampled
                                           coal (9 or more units)                           41        41                         532         158
                                           Coal (1 to 8 units)                            109             65                     344         149
                                           Oil (5 or more units)                           14             14                     112          43
                                           Oil (1 to 4 units)                              34             20                      70          31
                                           Gas (8 or more units)                           21             21                     320          64
                                           Gas (1 to 7 units)                              45             20                     125          35
                                           Total                                              a              a                1.503         480
                                           aThese numbers total more than 190 and 138 because utilities that used more than one type of fuel
                                           were included in more than one stratum.


                                           We received responses from 130 (93 percent) of the 138 utilities that
                                           were mailed a questionnaire. The responses included information on 450
                                           (94 percent) of the 480 generating units in our sample.

                                           Although oil- or gas-fired generating units can benefit from some clean
                                           coal technologies, our questionnaire survey indicated that utilities would
                                           be primarily interested in the technologies for their coal-fired units. We
                                           have therefore focused the discussion of our questionnaire survey in
                                           this report on utilities’ responses for coal-fired units. We received infor-
                                           mation from 99 utilities on 291 (94 percent) of the 307 coal-fired units in
                                           our sample. The responses were analyzed to develop estimates for the
                                           universe of 75megawatt-and-larger coal-fired generating units and asso-
                                           ciated utilities from which the sample was drawn.

                                           Because we reviewed a statistical sample of coal-fired generating units,
                                           each estimate developed from the sample has a measurable precision, or
                                           sampling error. The sampling error is the maximum amount by which
                                           the estimate obtained from a statistical sample can be expected to differ
                                           from the true value we are estimating. Statistical estimates were devel-
                                           oped at the 95- percent confidence level and are shown with the lower
                                           and upper confidence limits (see app. IV and V). This means that 19 out
                                           of 20 times the sampling procedure we used would produce a confidence
                                           interval containing the true value of the characteristic we are
                                           estimating.




                                           Page 39                              GAO/RCED-96-166      Potential   Use of Clean Coal Technologies
Appendix III

Copy of GAO’s Questionnaire Sent to Utilities



                                         UaltedShtuGeaed AecoaatlagOfftcs
                                         Survey of Utilities’ Views of Clean Coal
                                         Technologies



               Ih’TRODUCf’f ON

               The U.S. Ckneml Accounting Office (GAO). an agency        Fart 1 of this questiomtairespecifically addressesthe unit
               which conductsstudiesfor the Congmss.is surveying         identified on the label below: patts2 and3 require
               utilities to obtain their views aboutclean coai           naponaa for your entire system.
               technologies.The Subcommitteeon Energy andPower,
               HouseCommitteeon Sncrgy and Commerce.a&cd us to           All answersfrom individual utilities wilt be kept
               detcmtincthe extent to which utilities would consider     confidential. Your responseswilt be combii with
               usingckan coat technologieswith andwithout acid rain      thoseof other utilities and mportcdin summaryform. No
               control legislation. We are also intcmstedin obtaining    individual utility’s rcsponscswill hc idcmificd.
               utilities’ perspectiveson demandgmwth andincentives
               for commercialking clean coat technologies.               Please.tctum the completedquestiomtaitein the enclosed
                                                                         self-addressed.postage-paidenvelope. Mailing your
               We am collecting information from utilities on possible   mply within 2 weeksof receipt will help us avoid costly
               plansfor using clean coat technologieson selectedcoal-.   follow-up mailings. lf the envelopehasbeenmisplaced.
               gas-.and oil-burning units. The unit we have selectedat   plcaacmail the completedquestiomraircto:
               your utility is:
                                                                             Carole Buncher
                                                                             U. S. GeneralAcc&uuningOffice
                                                                             10 west JacksonBoulevard
                            t-PLACEUNlTLABEL HERE)                           Fifth floor
                                                                             Chicago,Illinois 606tM

                                                                         If you have questionsaboutthe survey,pleasecall Ms.
                                                                         Buncheror Daniel Feehanat (312) 353-0514.Thank YOU
                                                                         for your cooperation.




                1




                           Page 40                                 GAO/RCED-96-166       Potential   Use of Clean Coal Technologies
             Appendix Ill
             Copy of GAO’e QueetIonnaire        Sent to UtWiea




CLEAN COAL TRCHNOLOGIRS


For the purposesof this questionnaire,we are defting clean coal technologiesasemergingtechnologiesdesignedto
reduceemissionsof sulfur dioxide (SO2) and/ornitrogenoxides (NOx) from fossil-fuel-firedunits. As you complete
the questionnaire.considerthe following as clean coal technologies.

l   Coal cleaningand upgrading(e.g., ultratine and advancedflotation, physical, andchemical)
l   AdvancedFGD (e.g.. “dry” scrubbersand scrubbers with regenerablesorbent)
9Sorbentinjection
l   Low-NOx combustion
l   Post-combustionNOx control
l   Gascoiiting/n9nuning
l   CombinedSOuNOx contml
l   Atmosphericfluidixed bed combustion
l   Pmssurizedfluidixed bed combustion
l   Slagging combustion
l   Integratedgasification,combinedcycle




             Page 41                                 GAO/RCED-90-106       Potential   Use of Clean Coal Technologies
                                                                                                                I



            Appendix Ill
            copy of GAO’s Questionmire         Sent to UtWtit%




PART 1.1: Backgmundinformation for the unit httifid      on page 1

1. N~epl~cepadtyOnMw)
               w

2. Year of Mdal operation

     19-                                                                                            (,%I.,

3. Type of Puelprincipally used(Check one)
                                                                                                      IW
     1.0    Bhminouswai
     2. cl subbituminml5 coal
     3. Cl Lignite wai
     4.0    Amhracitewsl
     5.0    NtUUralg8S
     6. 0  Oil -distillate
     7.0   Oil-&dual
     8. cl Dual-AIed
     9. Cl Other (Pfew spec@)




4. Average sulfur contentof principal fuel

               lbs so2/MMBttt                                                                       ww

5.   IS the unit equippedwith   a SO2 and/orNOx emissioncontml device?(Check one)
                                                                                                      m
     1. Cl SO2 control only
     2.0 NOx contml only
     3.0 SO2 ad NOx controls
     4. q Neither SO2nor NOx controls




3




              Page 42                                GAO/RCED-90-166 Potential Use of Clean Coal Technologies
                Appendix III
                Copy of GAO’s Questionnaire            Sent to Utilities




    Part 13: Your utility’s cumnt plans on cleancoal tednology usefor this unit

    6. Is your utility cwmtly planning to usea cleancd technologybcfon the year 2010 for the unit identifiedon page
       l? (Check one)
                                                                                                                             (all
        l.n    Yea
        2.0    No __3        Skip to Page 6
        3.cl   lJnwttahl -         Skip to Page 6

    7. Which of the following clean coal technology(ies)is your utility planning to useon this unit? For the
       technology(ies)your utility is planning for this unit pleaseenter the year your utility plansto bring it into service.
       (Check “no” or “‘y&for each technology; for each technology you check *>es”. enter year)                            a-1

                                                        Use technology




        11. Integratedgasifk-don. combii       cycle
        12. Other (Please specb)



    8. Doesyour utility have officially approvedplansto use(any of) the clean coal teclmology(ies)checkfd in question
        7 above? (Check one)
                                                                                                                             Qm
        1.0    Yes
        2.0    No




    4
Y




                Page 43                                     GAO/RCED-f@165         Potential   Use of Clean Coal Technologies
                    Appendix III
                    Copy of GAO’s Questionnaire       Sent to Utilities




    9. How muchof a role, if any. have eachof the following factoff played in your utility’s plans to usethe cleancoal
       technology(ies)?(C&k onefor each factor)                                                                      rcw

                                                                                                                       Littleor no
                                                                    Great role       Moderaterole       Somerole           role
                          FACTORS                                      (2)               (3)              (4)              (5)
        1. Additional capacity needed
        2. Cbmtt federalenvironmental
            RgUltUiOlt5
       3. Anticipated federalacid rain
          eonttol legislation
       4. Stateenvironmentalngulations         1               I-                I                  I              I
       5. Lalxt
             andspace
                  charactetistics
       6. Age or condition Of CUmN boiler
          requite replacement                                  I                 I                  I
       7. Size of boiler                                                         I                  I              I
        8. Fuelcosts                           I
       9. Re$~re~~~nstallation

        10. Low operating andmaintenance
            COStS
        11. Lowcapitalcosts



        13. Wastemanagement
        14. High level of confidprce in
            technology
        15. Capital availability
        16. Other (Pleare specifvJ




Y




                    Page 44                                GAO/RCED-90-166 Potential Use of Clean Coal Technologies
                                                                                                 -
                 Appendix III
                 Copy of GAO’s Questionnaire        Eknt to UtiBtiea




PART 13: Effect of acid r&t control legislation on the marketpenetratkmpotuttial of clean coal technologies

A numberof bills wetc intmducedin the 100thCongressthat would have mquiredudlities to ttduce SO2 andNOx
emissions.Someof t&e bills ptovided for phased-incompliancedates,bubbling, etc. GAO hasdesignedfour
hypotheticalacid rain cotttml scenariosbasedon thosebills. However,our scenariosdo not provide for phasingin or
bubbling becausethey have beensimplified for purposesof analysis. Someof the questionsin this sectionate based
on thesescenarios,which are as follows.

l Scenada 1: Utilities am requiredto reducesystemwideSO2emissionsby 35 percentandNOx emissionsby 25
percentfrom 1980levels or to a floor of 1.0lb/Mh4Btu for SO2and0.6 lb/MMBtu for NOx-whichever approachis
lessstringent-by the year 1997.

l   Scenario 2:Utilities am requited to reducesysmmwideSO2emissionsby 75 percentandNOx emissionsby 50
percent from 1980levels or to a Boor of 0.8 lb/MIvlBtu for SO2and0.4 lb/MMBtu for NOx-whichever approachis
lessstringent-by the year 1997.

- Scenado 3:   Utilities am requited to reducesystemwideSO2emissionsby 35 percentandNOx emissionsby 25
percentfmm 1980levels or to a floor of 1.0WMMBN for SO2 and 0.6 lb/MMBN for NOx-whichever appmachis
lessstringent-by the year 2004.

l Scenario 4: Utilhies am requited to nducc systemwideSO2emissionsby 75 percentandNOx emissionsby 50
percentfrom 1980levels or to a floor of 0.8 1bMMBtu for SO2and 0.4 lbIMh4B~ for NOx-whichever approachis
lessstringent--bythe year 2004.
For eachquestionthat nfers to the.somarios,the soenarioswill be duplicatedin table form as follows for easy
nference:


Utilities mquiredto makethe following systemwidenductions from 1980levels
        sccMr&              so2                          NOx                 Deadline

          :. ’ 75%
               3S%orto
                   or to 0.8
                         l.Olb/MMBN
                             lb/hlh4BN         25%
                                               50% or to 0.6
                                                         0.4 WMMBN
                                                             ib/hfhfBN         1997
          3    35% or to 1.01bMMBN             25% or to 0.6 WMMBN
          4    75% or to 0.8 WMMBN             50% or to 0.4 lb/MtvfBN



The responsesyou provide to the questionsin Part 1.3shouldapply only to the unit identified on page 1 of this survey.
However,in respondingto the questions,you may needto consideryour systemwideplans.


    10. Hasyour utility explored emissioncontrol options,that may affect this unit, for meeting the requirementsof acid
        rain control legislation, shouldit be enacted?(Check one)
                                                                                                                          QB
         1. 0 Yes
         2.0     No d       Skip to page I I




    6




                 Page 46                                GAO/RCED-90-166 Potential Use of Clean Coal Technologies
                                                                                                                       .
               Appendix III
               Copy of GAO’s Questionnaire    Sent to Utilities




11. For e8ch8cc.twio.what option@),if any, would your utilhy most twiously coruidef employing on this unit to meet
     the SO2 and NOx ttxydmnentsl (Check ot lea one option fir achlevlngSO2reductionsand at least oneopt&n
    jiw achlevlng NO% reductlotu u&r each scetrdo)                                                             *b-l
                                                                                                               w-l



Udlider requiredto makethe following systemwidereductionsfrom 1980levels
    scenario             so2                       NOx                  Deadline

       :   35% or
           75% or to 0.8
                     1.0lb/MMBtu
                         1bMtvlBh1      50% or
                                        25% or tu
                                               to 0.6
                                                  0.4 WMh4Btu
                                                      lb/MMBtu            1997
      3    35% or to 1.01MklMBtu        25% or to 0.6 lb/MhIBtu
      4    7S% or to 0.8 1WMMBtu        50% or to 0.4 lbMME3tu



                                         Scanart   1     Scanarlo 2




NOTE: If your utility is nut seriously considering using P clean coal technology on this unit (in, did not check
option 6 in any columnr), SKIP TO QUESTION 15




7




               Page 46                              GAO/RCED-90-165       Potential   Use of Clean Coal Technologies
            Appendix III
            Copy of GAO’s Questionnaire         Sent to Utffltier




12. UyarindicatedInthsprrcsdingquestionthetyourutilitywouldrrioudyconriderwinprtlurr~~~
    technology, pleoa imiicate below w/&h cleancoal mgy(ies)      that ia. (For each scemrb@r whfch you
     checked opdon 6 ln the preceding question, check that technology(les) which your udllty would most serlouriy
     consfder usfng)                                                                                              6lm
                                                                                                                  w1m



Udlitica tcquircd tu makethe following systemwidereductionsfrom 1980levels
    Scenorfo          so2                          NOx                   Deadline
           35% or to 1.Olb/?vMBtu        25% or to 0.6 lb&lMBtu            1997
      :    75% or to 0.8 lbMh4Bt-u       50% or to 0.4 lb/MMBtu
      3     35% or to 1.0lb/MMBtu        25% or to 0.6 lb/MMBtu            ;E
      4    75% or to 0.8 lb/MhIBtu       50% or to 0.4 Ib/MMBtu            mo4




            TECHNOLOGIES
1.  Coal clcardngand upgrading
2.  AdvanwdFGD
3.  Sorbentinjection
4.  Low-NOx combustion
5.  Post-combustionNOx czmttol
6.  Gascotidnglrcbuming
7.  CombinedSOuNOx comrol
8.  Abnosphcricfluidized bed
    cqbustion
9. Pmswuiwi fluidized bed
    combustion
10. Slaggingcombustion
11. Integrated gasification,combined
    cycle
12. Other (P&ate spec@)


13. N/A; would not USCa clean coal
    technologyunderthis scenario




8




            Page 47                                  GAO/RCED-90-165 Potential Use of Clean Coal Technologkm



                                                                                  ._ .   .- . .-- .._---_.--.-_. _--.-------   --.-._ ..-.
            Appendix     IU
            Copy of GAO’6 Questionnaire Sent to Utilities




13. Pleaseindicate the primary reason(s)that your utility would sedouslyconsiderusingrk technology(ies)you
    indicated in the precedhg question. (Check no more than three in eachcolumn)                           wn.l
                                                                                                           Wlnl



Utilities tquimd tu make the following systemwidereductionsfrom 1980levels
 Scenorfo              so2                       NOx                 Deadline

     :     35% or to 0.8
           75%       1.01wMMBN
                         1bfMMBN      50% or to 0.6
                                      25%       0.4 WMMBN
                                                    lb/Mh%Btu          1997
     3     35% or to 1.0lb/MMBm       25% or to 0.6 lb/IWvlBtu         2004
     4     75% or to 0.8 lb/MMBtu     50% or to 0.4 lb/hMBm            2004



                                        Scenario 1      Scenario 2    Scenario 3




 16. Other(Please specify)




             Page 48                                 GAO/RCED-90-106 Potential Use of Clean Coal Technologies
             Copy of GAO% Que~tionnalre          Sent ti Utilities




14. Will using a clean coal tcchtmlogy require your utility to make opemtiorul changed (e.g.. switch lb1 type)? If so.
    brielly explain.                                                                                                 WI




                                           (SKIP TO NEXT PAGE)

15. Briefly explain why your utility would not seriously consider using a clean coal technology under any of the
    scauios.                                                                                                         WI




10




              Page 49                                  GAO/RCED-DO-165         Potential   Use of Clean Coal Terhnolcq$i-
              Appendix III
              Copy of GAO’s Questionnaire Sent to Utilities




PART 2: Systemwideperspectiveon demandgrowth

16. Will your utility, as a whole. likely experiencedemandgrowth by the year 2ooo1(Checkotu)
     l.cl Yes
     2. q No-Skip              w nertpagc
     3. Cl Don’t know -            Skip to next page

17. How much of an incnase in peak.base,andcycling demandwill your utility requireby the year 2OOO7(Ifyou
    eaprct no increase in a category(ies), enter 0)

     Mwpek
     -W                     base
                       MW cycling                                                                                  W-32)

18. How likely or unlikely is it that your utility would usethe following methodsto meetdemandgrowthin your
     system? (Check one for each method)                                                                           IIW

                                               1 Very likely I Fairly likely I Faidyunlikely 1 VBN unlikely 1
                     METHODS                        -w             iz, _           - (3)         - (4)
     1.   Build a new coal-fired unit using
          clean coal technology
     2.   Build a new coal-furd unit without
          clean coal technology
     3.   Build a new oil- or gas-firedunit
     4.   Build a new non-fossil-find unit
     5.   use clean wal technologyto
          lncnasc capacity at an cxiating
          tit(S)
     6.   Increasecapacity at an existing
          unit(s) by meansother than clean
          coaltechnology                       !              I              I                 I            I
     7. PurchasePowerfrom a domestic
        provider
     8. Furchascimuomd oower
     9. Rely on demand-side
         management/consenation             I                 I              I                 I             I
     10. Increaseoutput at existing unit(s)
     11. Other (Pleasespecify)




11




              Page 50                                   GAO/RCED-90-106          Potential   Use of Clean Coal Technologies
                  Appendix III
                  Copy of GAO’@Questionnaire            Sent to Utilities




    PART 3: Syaremwideperspectiveon commercMixing                   20. What doesyour utility considers8the bestways to
    cleancoal technologies                                             commercialixecleancoal technologies?(C/reckno
                                                                        more than three)
    19. Which of the following incendvts. if any, would                                                                   warn)
        mostenbanwIhcUkellhood that your utility would                  1. c] Contin~ DOE’s Clean Coal Technology
        invest in a clean coal rechnology?(Check no more                      Program(CCfP) ascmremly implemenred
        than fhree)                                                     2.0 RedirectDOE’s CCfP to emphasii multiple
                                                               0              demonstrationsof technologiesthat seemmost
          1. c] Extendedcompliancedate,assumingacid                           pmmisiig
                rain legislation is enacted,for utilities willing
                to usecleancoal technology                              3. [7 RedirecrDOE’s CCTP to emphasii retrofit
                                                                              technologies
         2. 0 Relaxedemissionreductiontargets,assuming
                acid rain legislation is enacted,for utilities          4. q RedirectDOB’s CClT to emphasii
                willing to useclean coal technology                           qowering techWlogieS
          3.0 Tax credits                                               5. [7 RedirectDOE’s CCTP to emphasii
                                                                              NOx-conuol technologies
         4.0 Federally establishedprice andloan
                gu--                                                    6.0 Legislateemissionreductiontarget levels and
                                                                              compliancedatesthat are compatiblewith the
          5. 0 Governmentgrants                                               availability andcapability of clean coal
         6. 0 Cost sharing with govemment                                     technology
         7.0    Less stringent acw sauce performance                    7.0 Chargeemittersfor exceedingesrablishedSO2
                stmdardsfor udlhies willing to useclean coal                  andNOX emissionlevels
                tdlIlology                                              8. Cl Other(Pleasespec#I
         8. 0   Increasedflexibiity by public utility
                commissionson COStrecovery andprudency              21. If acid rain wntml legislation is enacted,which
         9.0    Additional commercialdemonstrations                     approachwould your utility considerto be mom
                                                                        conduciveto wmmercialixing clean coal
        10. 0   Lower capital cosrsthan rhatof conventional             technologies?(Check one)
                tcchnologia                                                                                                 m
        11.0    LoweropemtingandmahWnanweoststhan                       I. 0 Requiring emissionreductionsto be
                that of conventionaltechnologies                             acwmplished fn phases
        12.0    Demonstratedshortconstructionlead times                 2. 0 Requiring emissionreductionsto be.
                                                                             accomplishedby a single deadline
        13. 0   Other (Please spec@)
                                                                        3.0 Both approachesequally conducive

        14. 0 None of the above




Y




                   Page 61                                    GAO/RCED-90-165 Potential Use of Clean Coal Technologies
            Appendix III
            Copy of GAO’s Questionnaire         Sent to Utilities




22. Thank you for your wopemdon.    lf ynr have additional comment8 the topics coveml please feel fme to write them
    tKm.                                                                                                          f-m




II you would w   to elhmte   on the topics covered in this questionnaire, please provide your name and tclc~hc
number:

Name:




13




           Page 62                                   GAO/RCED-99-166        Potential   Use of Clean Coal Technologies
  .
Ppe

*&~~&s That Would Be Considered at Coal-
F’ired Units to Achieve SO2Reductions Under
GAO’s Scenarios
                                                              Scenario    la
                                                                                 Percent of units for which option
                                                                                        would be considered
                                                                                       95% confidence limits
               Option                                                          Estimate          Lower          Upper
               Use clean coal technologiesb                                            24             17            31
               Sorbent iniection                                                       18            IO            25
               Coal cleaning and upgrading                                              9              3            14
               Advanced flue gas desulfurization                                        7              2            11
               Gas cofirina/reburnina                                                   5              1              9
               Use conventional technologies
               Switch to low-sulfur coal                                                   46                39                  53
               Install a conventional scrubber                                             18                12                  24
               Switch type of fuel                                                          5                 1                   8
               Other options
               Take no action at this unit but reduce emissions
                  elsewhere                                                                34                27                  41
               Take no action at this unit as system already
                  meets scenario                                                           21                15                  28
               Retire the unit                                                             11                  5                 17
               Note: Based on questionnaire responses, we estimate that utilities have explored emission control
               options for 699 of their coal-fired units. The percentages in this appendix relate to these units.
               aUnder this near-term, moderate scenario, utilities would be required to reduce their systemwide SO,
               emissions by 35 percent below 1980 levels or to 1 .O Ibs./MMStus-whichever        would be less stringent-
               by a 1997 compliance date.

               bWe are unable to provide meaningful estimates for combined SO,/NO, control and atmospheric fluid-
               ized-bed combustion technologies because only a few utilities selected them as options.




               Page 53                                 GAO/RCED-90-165         Potential        Use of Clean Coal Technologies
Appendix IV
Optiona That Would Be Considered at Coal-
Fired Units to Achieve SO, Reductions Under
GAO’s Scenarios




                                               Scenario    2a
                                                               Percent of units for which option
                                                                      would be considered
                                                                     95% confidence limits
Option                                                       Estimate          Lower          User
Use clean coal technologiesb                                         25            18            32
Sorbent injection                                                    17            10            24
Advanced flue aas desulfurization                                    11              6           16
Coal cleaning and upgrading                                           9              4           15
Combined SO,/NO, control                                              8              3           13
Gas cofirina/reburnina                                                5              1             9
Use conventional      technoloQies
Switch to low-sulfur coal                                                39                31                  47
Install a conventional scrubber                                          35                28                  42
Switch type of fuel                                                       7                 2                  12
Other optlons
Take no action at this unit but reduce emissions
   elsewhere                                                             19                13                  26
Take no action at this unit as system already
   meets scenario                                                        16                IO                  22
Retire the unit                                                          16                 9                  22
aUnder this near-term, stringent scenario, utilities would be required to reduce their systemwide SO,
emissions by 75 percent below 1980 levels or to 0.8 Ibs./MMBtus -whichever       would be less stringent-
by a 1997 compliance date.
bWe are unable to provide meaningful estimates for atmospheric Ruidized-bed combustion and pres-
sunzed fluictized-bed combustion technologies because only a few utilities selected them as options
they would consider.




Page 64                                GAO/RCEDBO-166        Potential        Use of Clean Coal Technologies
    Appendix Iv
    Option6 That Would Be Considered at Coal-
    Nred Unite to Achieve SO, Reductions Under
    GAO’s Scenarios




                                                  Scenario    3”
                                                                     Percent of units for which option
                                                                            would be considered
                                                                           95% confidence limits
    Option                                                         Estimate          Lower          Upper
    Use clean coal technoiogiesb                                          41             33             48
    Sorbent iniection                                                      34            25             42
    Advanced flue gas desulfurization                                      21             12            29
    Coal cleaning and upgrading                                            13              6            19
    Combined SO,/NO, control                                               IO              4            16
    Atmospheric fluidized-bed combustion                                    6              1            11
    Slagging combustion                                                     6              1            11
    Gas cofiring/reburning    ____                                          5              1              9
    Pressurized fluidized-bed combustion                                    5              1              9
    Use conventional technologies
    Switch to low-sulfur coal                                                  46                39                  53
    install a conventional scrubber                                            15                 9                  21
    Switch type of fuel                                                         5                 1                   9
    Other options
    Take no action at this unit but reduce emissions
      elsewhere                                                                37                30                  44
    Take no action    at this unit as system   already
      meets scenario                                                           21                 15                 28
    Retire the unit                                                            13                  7                 20
    ‘Under this long-term, moderate scenario, utilities would be required to reduce their systemwide SO,
    emissions by 35 percent below 1980 levels or to 1 .O Ibs./MMBtus-whichever     would be less stringent-
    by a 2004 compliance date.

    bWe are unable to provide a meaningful estimate for integrated gasification,          combined cycle technology
    because only a few utilities selected it as an option they would consider.




Y




    Page 56                                GAO/RCED-90-166         Potential        Use of Clean Coal Technologies
Appendix TV
Optlona That Would Be Considered at Coel-
FIred Units to Achieve SO, Reductione Under
GAO’s Somarios




                                              Scenario    4’
                                                                 Percent of unit8 for which option
                                                                        would be considered
                                                                       95% confidence limits
Option                                                         Estimate          Lower          Upper
Use clean coal technologiesb                                           51            43             59
Advanced flue aas desulfurization                                      32            24             41
Sorbent iniection                                                      32            23            41
Combined SOJNO, control                                                14              7            20
Coal cleanina and uoaradina                                            14              7            20
Pressurized fluidized-bed combustion                                    9              4            15
Atmospheric fluidized-bed combustion                                    8              3            13
Slagging combustion                                                     6              1            12
lntearated aasification, combined cvcle                                 5              0              9
Use conventional technologies
Switch to low-sulfur coal                                                  39                32                  47
Install a conventional scrubber                                            30                24                  36
Switch tvoe of fuel                                                         7                 2                  11
Other options
Take no action at this unit but reduce emissions
  elsewhere                                                                22                16                  29
Retire the unit                                                            16                10                  23
Take no action at this unit as system already
  meets scenario                                                           16                10                  22
Qnder this longsterm, stringent scenario, utilities would be required to reduce their systemwide SO,
emissions by 75 percent below 1980 levels or to 0.8 Ibs./MMBtus-whichever       would be less stringent-
by a 2004 compliance date.
bWe are unable to provide a meaningful estimate for gas cofiring/reburning           technology because only a
few utilities selected it as an option they would consider.




Page 56                                GAO/~90-105             Potential        Use of Clean Coal Technologies
Options That Would Be Considered at Coal-
Fired Units to Achieve NO, Reductions Under
GAO’s Scenarios
                                                                     Scenario        1”
                                                                                            Percent of units for which option
                                                                                                   would be considered
                                                                                                  95% confidence limits
               Ootion                                                                     Estimate          Lower          UDIG
               Use clean coal technoioaiesb                                                       53            43            63
               Low-NO,     combustion                                                             44            36            52
               Post-combustion        NO, control                                                 12              4            19
               Gas cofirina/reburnina                                                              6              2            IO
               Other options
               Take no action      at this unit but reduce        emissions
                 elsewhere                                                                            22                16                  29
               Take no action at this unit as system              already
                 meets scenario                                                                       18                12                  24
               Retire the unit                                                                         6                  1             -lo

               Note: Based on questionnaire responses, we estimate that utilities have explored emission control
               options for 699 of their coal-fired units. The percentages in this appendix relate to these units.
               aUnder this near-term, moderate scenario, utilities would be required to reduce their systemwide NO,
               emissions by 25 percent below 1980 levels or to 0.6 Ibs./MMBtus-whichever         would be less otringent-
               by a 1997 compliance date.

               bWe are unable to provide meaningful estimates for combined SOJNO, control, slagging combustion,
               atmospheric fluidized-bed combustion, and sorbent injection technologies because only a few utilities
               selected them as options they would consider.



                                                                     Scenario        2”
                                                                                            Percent of units for which option
                                                                                                   would be considered
                                                                                                  95% confidence limits
               Option                                        .-                           Estimate          Lower          Upper
               Use clean coal technoioaiesb                                                       72            65             78
               Low-NO,     combustion                                                             61            54             67
               Post-combustion
               -.-                      NO, control                                               21            13            30
               Gas     cofiring/reburning
               ~--------~.                                                                        12              6            17
               Combined      SO,/NO,      control
                                                                                --
                                                                                                   8              3            12
               Other options
               -____--
               Retire the unit                                                                        11                  5                 17
               Take no action      at this unit but reduce        emissions
                 elsewhere                                                                            10                  6                 13
               Take no action at this unit as system              already
                 meets scenario                                                                        6                  2                 11

               aUnder this near-term, stringent scenario, utilities would be required to reduce their systemwide NO,
               emissions by 50 percent below 1980 levels or to 0.4 Ibs./MMBtus-whichever        would be less stringent-
       Y

               by a 1997 compliance date.

               bWe are unable to provide meaningful estimates for slagging combustion, atmospheric fluidized-bed
               combustion, and sorbent injection technologies because only a few utilities selected them as options
               they would consider.




               Page 57                                 GAO/RCED-90-165                    Potential        Use of Clean Coal Technologies
Appendix V
Options That Would Be Considered at Coal.
Pired Unita to Achieve NOx Reductions Under
GAO’s Scenarios




                                               Scenario   3O
                                                             Percent of units for which option
                                                                    would be considered
                                                                   95% confidence limits
Option                       ~__..-_---                    Estimate          Lower          Upper
Use clean coal technologiesb                                           57                     48
                                                                                      -~_____---.
                                                                                                             67
Low-NO,    combustion                                                  47                     39             56
                                                                                    ____.-
Post-combustion      NOpntrol                                          17                       a            25
Combined     SO,/NO,     control                                      -
                                                                        a                       2            14
Gas cofiring/reburning                                              6                           2            10
                                   --                          ___-_____.
Other options
Take no action    at this unit but reduce   emissions
  elsewhere                                                            23                     16             30
Take no action at this unit as system       already
   meets scenario                                                      ia     ---
                                                                                              12
                                                                                            _________~
                                                                                                             24
                                                                                                         ...-.-
Retire the unit                                                         7                      2             12

Vnder this long-term, moderate scenario, utilities would be required to reduce their systemwide NO,
emissions by 25 percent below 1980 levels or to 0.6 Ibs./MMBtus-whichever     would be less stringent-
by a 2004 compliance date.
bWe are unable to provide meaningful esttmates for slagging combustion, atmospheric fluidized-bed
combustion, pressurized fluidized-bed combustion, and integrated gasification, combined cycle technol-
ogies because only a few utilities selected them as options they would consider.




Page 68                                 GAO/RCED-90-166    Potential        Use of Clean Coal Technologies
Appendix V
Optlone That Would Be Considered at Coal-
Fired UnIta to Achieve NO, Reductions Under
GAO’s Scenarios




                                               Scenario    48
                                                               Percent of unlta for which option
                                                                       would be conclidered
                                                                      95% confidence limits
Option                                                       Ertimate           Lower         UDDW
Use clean coal technologiesb                                         77             71           a3
Low-NO, combustion                                                   62             56           69
Post-combustion NO.. control                                         30             21           38
Combined SOJNO- control                                              14               a          21
Gas cofiring/reburning                                               11               6          17
Pressurized fluidized-bed combustion                                   5              1           9
Other options
Take no action at this unit but reduce emissions
  elsewhere                                                              12                 7                 16
Retire the unit                                                          11                 5                 16
Take no action at this unit as system already
  meets scenario                                                          6                 2                 11
YJnder this long-term, stringent scenario, utilities would be required to reduce their systemwide NO,
emissions by 50 percent below 1980 levels or to 0.4 Ibs./MMBtus-whichever        would be less stringsnt-
by a 2004 compliance date.
bWe are unable to provide meaningful estimates for slagging combustion, atmospheric fluidized-bed
combustion, and integrated gasification, combined cycle technologies because only a few utilities
selected them as options they would consider.




Page 89                                GAO/RCED-90-165       Potential        Use of Clean Coal Technologks
Appendix VI

Major Contributors to This Report


Resources,              James A, Fowler, Assistant Director
Community, and          Marcus R. Clark, Jr., Assignment Manager
                        Jonathan T. Bachman, Senior Social Science Analyst
Economic
Development Division,   Brian T. McLaughlin, Evaluator

Washington, D.C.
                        John R. Richter, Regional Management Representative
Chicago Regional        Donald J. Kittler, Evaluator-In-Charge
Office                  Carole S. Buncher, former Evaluator-In-Charge
                        Francis M. Zbylski, Senior Operations Research Analyst
                        John Zarem, Computer Programmer Analyst
                        Daniel J. Feehan, Evaluator




(aoe7ee)                Page 60                   GAO/RCED-90-106   Potential   Use of Clean Coal Technologies
1   j.._.   --..^---l------.--_   -..-   _----.-..-.-_...-..   __