oversight

Fossil Fuels: Pace and Focus of the Clean Coal Technology Program Need to Be Assessed

Published by the Government Accountability Office on 1990-03-19.

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

1:---                       Ilnil,etl   States   General   Account,ing   Office

;   (-‘&QO
                            Report to the Honorable
I                           Phil.ip 12.Sharp, Chairman,
                            Subcommittee on Energy and Power,
                            Committcse on Energy and Commerce,
                            House of’ Representatives
I   -

                            FOSSIL FUELS
                            Pace and Focus of the
                            Clean Coal Technology
                            Program Need to Be
                            Assessed

                                                                                      i;
                                                                                  I I#-
                                                                                  140907




    --
    (;A(:)/It(:EI)-9o-(i7
    Resources, Community,   and
    Economic Development    Division

    I%230504

(   March 19,199O

    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 discusses the Department of Energy’s (DUE) evaluation and
    selection of project proposals under the second round of the Clean Coal Technology program.
    The preliminary results of our review were presented in our Statement for the Record (GAO/
    T-WED-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.

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

    This work was done under the direction of the former Director of Energy Issues, Keith 0.
    Fultz. Please call Mr. Victor S. Rezendes, the current Director of Energy Issues at (202) 275-
    1441 if you have any questions about this report. Major contributors are listed in appendix
    VII.

    Sincerely yours,




    J. Dexter Peach
    Assistant Comptroller General
                                                                                                    ,
I$cecutive Summary


                   Coal, one of the nation’s most abundant energy resources, provides
*rpose             about 26 percent of the nation’s energy needs. At the same time, how-
                   ever, emissions resulting from the burning of coal are major contributors
                   to air pollution problems, particularly acid rain. The Department of
                   Energy’s (DOE) Clean Coal Technology (CCT) program was established in
                   1984 to provide financial assistance to industry-up    to 60 percent of a
                   project’s cost-in demonstrating the commercial applications of emerg-
                   ing clean coal technologies that would enhance the use of coal, but in
                   both a more efficient and environmentally acceptable manner.

                   The Congress has appropriated $2.75 billion for the CCT program. To
                   date, DOEhas requested project proposals from industry through three
                   separate solicitations (or rounds) and has selected 39 projects. About
                   $1.55 billion has been committed to the first three rounds. Concerned
                   about the implementation of the program, the Chairman, Subcommittee
                   on Energy and Power, House Committee on Energy and Commerce
                   requested GAOto review DOE'Scriteria and process for evaluating and
                   selecting round-two projects.


                   As of December 1989, DOEhad completed cooperative financial assis-
Bbckground         tance agreements with sponsors of 13 of the 26 round-one and -two
                   projects in the CCT program. DOEexpects to complete cooperative agree-
                   ments for the remaining round-one and -two projects by July 1990. DOE
                   selected 13 additional projects for the program in December 1989 under
                   the third round and expects to complete negotiations for their funding
                   by December 1990. Public Law 101-121 directs DOEto solicit project pro-
                   posals for the fourth round by June I,1990 and the fifth round in 1991.

                    The CCT program is especially important in view of the administration’s
                   July 1989 legislative proposal to amend the Clean Air Act, which
                    includes requirements to reduce annual sulfur dioxide emissions from
                    fossil-fueled generators by approximately 10 million tons below 1980
                    levels and annual nitrogen oxide emissions by 2 million tons below pro-
                   jected 2000 levels by December 31,200O.


                   DOEdeveloped an elaborate process for evaluating, ranking, and select-
Results in Brief   ing round-two project proposals. The criteria used to evaluate and select
                   proposals for funding generally conformed to congressional and other
                   program guidance. Also, the evaluation and selection process provided
                   reasonable assurance that proposals were consistently and thoroughly
                   evaluated and that projects were selected using the applicable criteria.


                   Page 2                                    GAO/RcED9067   Clean Coal Technology
                      Executive   Summary




                      GAO’Sanalysis of the evaluation and selection process showed that DOE
                      picked the highest-ranked proposals submitted for the various mix of
                      technologies that it was interested in seeing demonstrated.

                      Of the 16 projects DOEselected in round two, 12 were rated weak in
                      meeting certain of the evaluation criteria. Nine of the projects were
                      rated weak in meeting the criterion that a project’s technology has the
                      potential to reduce nationwide emissions that cause acid rain. Although
                      emphasis was to be focused on coal-burning projects nationwide to
                      reduce emissions that cause acid rain, it still was only one of many crite-
                      ria to be considered in evaluating proposals. If DOEhad picked more
                      projects with greater potential to reduce nationwide emissions from
                      coal-fired facilities, it would have resulted in (1) the selection of lower-
                      ranked projects demonstrating technologies similar to the projects that
                      were selected, and (2) projects selected which may not be successfully
                      demonstrated or commercialized because of weaknesses in other criteria.

                      GAOalso noted that half of the 48 proposals that were evaluated in
                      round-two fared poorly against 3 or more of the evaluation criteria. This
                      could indicate that DOEmay have problems in identifying and funding
                      additional promising clean coal technology projects in future rounds.
                      Furthermore, GAO'Spast work has shown that problems have delayed
                      finalizing project cooperative agreements, delayed completion of various
                      project phases, and extended the estimated completion dates for some
                      projects in round-one. As of December 31, 1989, only three projects were
                      in the demonstration or operation phase and none had been fully demon-
                      strated. Rather than move into rounds four and five of the program as
                      currently scheduled, it may be beneficial to wait until DOEhas more
                      information on actual project demonstration results, This would allow
                      DOEto make more informed decisions regarding the identification, selec-
                      tion, and funding of the more promising technologies in future rounds of
                      the program and would help to ensure that the funds allocated to this
                      program are effectively and efficiently spent.


Principal Findings

Evaluation Criteria   WE appointed a project selection official who formed a Board for devel-
Development      ’    oping proposal evaluation and selection criteria and for evaluating the
                      proposed projects. To evaluate project proposals, the Board developed 6



                      Page 3                                     GAO/RCED-PO-67   Clean Coal Technology
                           Ekecutlve   Summary




                           qualification, 3 preliminary evaluation, and 11 comprehensive evalua-
                           tion criteria. The qualification and preliminary evaluation criteria were
                           intended to ensure that proposals met general program qualification
                           requirements and contained sufficient information for undergoing com-
                           prehensive evaluation. The comprehensive evaluation criteria were used
                           to assess the proposals’ technical, business and management, and cost
                           aspects. In addition, LIOEdeveloped four program policy factors to be
                           considered in selecting projects. GAO'Sreview of DOE'Scriteria, congres-
                           sional legislation and accompanying reports, DOEregulations, and other
                           program guidance showed that the evaluation criteria were developed in
                           accordance with the guidance provided.


Evaluation and Selection   The Board used teams of experts within DOEto assist in evaluating the
P+cess                     65 proposals submitted. Seven were rejected because they did not meet
                           either the qualification or the preliminary evaluation criteria. The
                           remaining 48 proposals were judged against the comprehensive evalua-
                           tion criteria, which included a detailed assessment of each proposal’s
  I                        strengths and weaknesses. Using the teams’ evaluations, in conjunction
                           with its review of the proposals, the Board also evaluated and rated
                           each proposal against the comprehensive criteria and developed an
                           overall ranking of the proposals.

                           GAO’S   review of the evaluation plan and procedures and randomly
                           selected evaluation files disclosed that the Board’s evaluation process
                           provided reasonable assurance that the evaluations were based on the
                           criteria, and that the evaluation teams consistently applied the criteria.

                           Using the Board’s evaluation results and four additional program policy
                           selection factors, DOE'Sselection official picked 16 projects, representing
                           a broad spectrum of technologies, that were consistent with the Board’s
                           overall ranking of the proposals and represented the highest-ranked
                           proposals for the range of technologies included in the round-two
                           selections.


SelectedProjects’          Although the selected projects represented the highest-ranked proposals
Weaknesses                 for the technologies DOEwas interested in seeing demonstrated, the
                           Board’s evaluations disclosed that 12 of the 16 selected projects were
                           rated weak in meeting 1 or more of the comprehensive evaluation crite-
            ”              ria. The technologies to be demonstrated by 9 of these 12 projects were
                           rated weak in their potential to reduce nationwide emissions of sulfur



                           Page 4                                     GAO/RCED-90-67   Clean Coal Technology
                            Executive   Summary




                            dioxide and/or nitrogen oxides when used on existing coal-burning facil-
                            ities, although they are expected to reduce emissions in those applica-
                            tions where they can be used. For example, DOEselected two projects to
                            demonstrate technologies for use in the steel and cement industries.
                            While beneficial in these industries, according to the evaluation results,
                            the application of these technologies on a widespread basis is limited;
                            therefore, their potential to reduce nationwide emissions is limited.

                            Five of the 12 projects, including 2 of the above 9 projects, were also
                            rated weak in other criteria relating to the technical readiness of the
                            technology for demonstration; the adequacy of the technical and man-
                            agement approach to design, construct, and operate the project; the ade-
                            quacy of the project’s financing plan; and/or the adequacy of the
                            project’s commercialization plan. However, these five projects were
                            rated stronger against a number of other comprehensive evaluation cri-
                            teria and were the highest ranked for the mix of technologies that DOE
                            wanted to see demonstrated.


Non$elected Projects With   GAO’S  review of DOE’S evaluation records showed that 14 of the 32 pro-
Stroag Emission Reduction   posals that were not selected were rated to have better potential for
                            reducing nationwide emissions that cause acid rain than the 9 selected
Potehtial                   projects that were rated weak in meeting this criterion. However, 6 of
                            these 14 nonselected proposals were rated weak in meeting 4 or more of
                            the other comprehensive evaluation criteria. Thus, while they were
                            stronger on the emissions reduction criterion, their chances of successful
                            demonstration and commercialization may be weakened by shortfalls in
                            other areas. Picking the other nonselected proposals would have
                            resulted in the selection of lower-ranked projects demonstrating technol-
                            ogies similar to the projects that were selected.


                            Given the current status of projects in the CCT program and in view of
Matters for                 the nation’s current budget constraints, the Congress may want to con-
Consideration by the        sider amending the clean coal technology provision of Public Law lOl-
Congress                    121 to direct DOEto delay requesting proposals and selecting projects for
                            rounds four and five of the program until it obtains additional demon-
                            stration results from projects already in the program.


                            GAOobtained and incorporated the views of DOEofficials on the factual
Agency Cotients             information presented. However, as requested by the Chairman’s office,
                            GAO  did not obtain official agency comments on a draft of this report.


                            Page 6                                    GAO/RCED-90437   Clean Coal Technology
C&dents


Executive Summary                                                                                           2


                         Coal, Energy, and the Environment                                               8
                         The Clean Coal Technology Program                                               8
                         Objectives, Scope, and Methodology                                             10

Chbpter 2                                                                                               12
DOE’s Criteria and       Round-Two CCT Program Objective
                         Selection Official and Board
                                                                                                        12
                                                                                                        12
Prdcessfor Evaluating    Evaluation and Selection Criteria                                              13
am/iSelecting Projects   Evaluation Process and Results                                                 14
                         Selection Official Process for Choosing Projects                               18
                         Conclusions                                                                    19

Chkpter 3                                                                                               20
Be& Projects Were        Evaluation Criteria in Which Projects Were Rated Weak
                         Many Round-Two Proposals Were Rated Weak in Meeting
                                                                                                        20
                                                                                                        25
Selkted but Many             Several Criteria
Habe Limitations in      Funding of Future Rounds                                                       25
Mekting DOE’s            Conclusions                                                                    26
                         Matters for Consideration by the Congress                                      27
Evhluation Criteria
Appendixes               Appendix I: List of Projects Selected Under the Clean Coal                     28
                             Technology Program’s Second Round
                         Appendix II: Description of Clean Coal Technologies                            29
                         Appendix III: Chronology of Major Events Related to the                        30
                             CCT Program’s Second Round
                         Appendix IV: Criteria Used to Evaluate and Select                              31
                             Projects
                         Appendix V: Summary of Guidance Used in Developing                             33
                             Evaluation and Selection Criteria
                         Appendix VI: Comparison of Guidance Used in                                    36
                             Developing Qualification, Preliminary, and
                             Comprehensive Evaluation and Selection Criteria
                         Appendix VII: Major Contributors to This Report                                38

Tables                   Table 2.1: Evaluation Phases Used in Selecting Round-                          13
                             Two Projects


                         Page 0                                    GAO/RCED-90-67   Clean Coal Technology
         Contents




         Table 3.1: Nationwide Emission Reduction Potential for                           21
             the 16 Selected Projects’ Proposed Technologies
         Table 3.2: Project Proposals Rated Weak in Meeting                               25
             Certain Evaluation Criteria

Figjre   Figure 2.1: Comprehensive Evaluation Organization Chart                          16




         Abbreviations

         CCT        Clean Coal Technology
         DOE        Department of Energy
         GAO        General Accounting Office
         NO,        nitrogen oxides
         f%         sulfur dioxide


         Page 7                                  GAO/RCED-90-67   Clean Coal Technology
  Chapter 1

,i I&roduction


     I
     I
                         Coal is one of our most abundant energy resources. It represents about
  Co/A,Energy, and the   80 percent of our fossil fuel resources and provides about 26 percent of
  Erj-vironment          the nation’s energy needs. Coal-fired power plants produce more than 65
     I                   percent of the electricity in the United States. Although coal is consid-
                         ered an important resource in meeting present and future energy needs,
                         coal combustion produces emissions that contribute to acid rain, Acid
                         rain-which    has been linked to a number of environmental problems,
                         including forest damage in the United States and Canada-is formed
                         when sulfur dioxide (so,) and nitrogen oxides (NO,) emitted into the
                         atmosphere return to earth as acid components in rain or snow. Coal-
                         burning power plants are the principle source of so, emissions and a
                         major source of NO, emissions.

                         Because of coal’s importance in meeting the nation’s future energy
                         needs, several initiatives have been undertaken in recent years by both
                         industry and the government to seek new technologies that will allow
                         coal to be burned in an environmentally acceptable and efficient man-
                         ner. About 20 million tons of SO,and 20 million tons of NO, are emitted
                         annually in the United States. Electric utilities and industrial plants
                         account for about 95 percent of so, emissions and about 50 percent of
                         NO, emissions. On July 27, 1989, the administration proposed amend-
                         ments to the Clean Air Act, including requirements to reduce annual so,
                         emissions from fossil-fueled generators by approximately 10 million
                         tons below 1980 levels and annual NO, emissions by 2 million tons below
                         projected 2000 levels by December 31,200O. This proposal underscores
                         the importance-and       urgency-of industry and government efforts to
                         develop new coal-burning technologies that will allow coal to continue to
                         be used as a major energy source in future years.


                         In 1984, under Public Law 98-473, the Congress set aside $750 million in
  The Clean Coal         the Energy Security Reserve Fund to establish the Department of
  Technology Program     Energy’s (DOE) Clean Coal Technology (CCT) program. The purpose of
                         this government-industry, co-funded program is to assist industry in
                         accelerating the commercialization of new coal technologies by demon-
                         strating that they burn coal more cleanly, efficiently, and cost-effec-
                         tively than current technologies. In December 1985, the Congress passed
                         Public Law 99-190 authorizing DOEto use $400 million of the $750 mil-
                         lion from the Energy Security Reserve Fund for the first solicitation, or
                         round-one, of the CCT program.

                         Under the program, DOEcan fund up to 60 percent of each project’s cost.
                         Industry and other nonfederal sources are expected to fund the balance.


                         Page 8                                   GAO/RCED-90-67   Clean Coal Technology
Chapter 1
Introduction




M)E issued the program’s first solicitation for project proposals in Febru-
ary 1986. As of December 1989, DOE had cooperative financial assistance
agreements with seven round-one project sponsors and was in the pro-
cess of negotiating agreements with the sponsors of the remaining four
round-one projects. DOE expects these negotiations to be completed by
July 1990. Of the 7 funded round-one projects, 4 are in the design or
construction phases and 3 are in the demonstration (operation) phase.
We have issued two reports1 and testified twice2 on DOE’S first
solicitation.

In March 1987, the administration announced plans for expanding the
CCT program. This expansion was based on a January 1986 report by
U.S. and Canadian envoys that made several recommendations to reduce
environmental problems associated with acid rain3 Among other things,
the report recommended that the United States implement a 5-year pro-
gram to demonstrate clean coal technologies that would be needed for a
future acid rain control program and that the U.S. government and
industry each provide $2.5 billion for the program. The administration
accepted the recommendation of the special envoys and requested $2.5
billion over a 5-year period to demonstrate new clean coal technologies
capable of being used in existing coal-burning plants. The administration
also announced that future clean coal technology demonstration projects
would be selected, where possible, to reduce emissions that cause acid
rain.

In December 1987, the Congress provided $575 million for the program’s
second-round solicitation for project proposals. In February 1988, DOE
solicited round-two proposals, and in September 1988, selected 16
projects from the 55 proposals received. As of December 31, 1989, one
of the 16 selected round-two projects, which are listed in appendix I,
had been withdrawn from the program and cooperative financial assis-
tance agreements had been completed for 6 of these projects. DOE
expects to complete the cooperative agreements for the remaining
round-two projects by July 1990.



‘Fossil Fuels: Commercializing Clean Coal Technologies (GAO/RCED-89-80, Mar. 29, 1989) and Fossil
Fuels: Status of DOEFunded Clean Coal Technology Projects as of March 16, 1989 (GAO/RCEDT
166FS, June 29,1989).
2Views on DOE’s Clean Coal Technology Program (GAO/T-RCED-88-47, June 22, 1988) and Status of
 90/T-RCED-89-26,
DOE                                                          Apr. 13, 1989).

3Joint Report of the Special Envoys on Acid Rain (Jan. 1986).



Page 9                                                   GAO/RCED90-67   Clean Coal Technology
                        Chapter 1
                        Introduction




                        In September 1988, the Congress provided an additional $575 million for
                        a third round of the CCT program. In May 1989, DOEsolicited round-
                        three proposals and in December 1989, DOEselected 13 projects from 48
                        proposals submitted. M)E expects to complete the negotiations for the
                        round-three projects by December 1990.

                        As of December 31,1989,39 projects were in the CCT program. DOEwas
                        in the process of negotiating agreements with the sponsors of 26 of
                        these projects, and of the 13 projects that had been funded, 3 were in
                        the demonstration (operation) phase and none had been fully
                        demonstrated.

                        In October 1989, under Public Law 101-121, the Congress appropriated
                        $1.2 billion for funding rounds four and five of the CCT program, of
                        which $600 million is to be made available for round-four and $600 mil-
                        lion for round-five. Thus, the Congress has appropriated a total of $2.75
                        billion for the program ($1.55 billion for the first three rounds and $1.2
                        billion for rounds four and five). Of the total $2.75 billion, $2.5 billion is
                        for funding the program over a 5-year period from fiscal year 1988
                        through 1992. DOEplans to solicit project proposals for the fourth round
                        in June 1990 and the fifth round in 1991.


                        On March 9,1988, the Chairman, Subcommittee on Energy and Power,
Objectives, Scope,and   House Committee on Energy and Commerce, asked us to review DOE'S
Methodology             implementation of the CCT Program. Specifically, the Chairman
                        requested information on the criteria and process used by DOEto select
                        the program’s second round of projects. To respond to the Chairman’s
                        request, we reviewed DOE'Sevaluation and selection criteria and the pro-
                        cess DOEused to (1) develop the criteria, (2) evaluate proposals, and (3)
                        select projects to determine if the selection of round-two projects was
                        accomplished in accordance with the program’s objective and guidance.

                        To determine the CCT program objective and related guidance, we
                        reviewed the program’s legislation, applicable DOEregulations, and con-
                        gressional reports pertaining to the program. We also reviewed the Joint
                        Report of the Special Envoys on Acid Rain, the Innovative Control Tech-
                        nology Advisory Panel Report that provided guidance for DOEto con-
                        sider in developing evaluation and selection criteria, and the Vice
                        President’s Task Force on Regulatory Relief recommendation that DOE
                        consider selecting projects in states providing incentives to encourage
                        the use of clean coal technologies. In addition, we reviewed public com-
                        ments on the solicitation and DOEstudies or analyses prepared for the


                        Page 10                                     GAO/RCED-90-67   Clean Coal Technology
    Chapter 1
    Introduction




I
    program. We reviewed DOE'Scriteria to ascertain if they were developed
    generally in agreement with the program’s objective and guidance.

    To review DOE'Sprocess for developing its project evaluation and selec-
    tion criteria, we interviewed three of the program’s Source Evaluation
    Board’s seven voting members, including its Chairman. We also inter-
    viewed its executive secretary and legal advisors assisting in the round-
    two process. In addition, we reviewed minutes of the Board’s meetings,
    other documents, and applicable DOEregulations.

     To review the process the Board used for evaluating proposals, we inter-
     viewed its Chairman and two of its members. We also reviewed the
     Board’s evaluation plan, written instructions provided to its evaluation
     teams, and the Board’s evaluation report. We randomly selected and
     reviewed ll(20 percent) of the 55 proposals received in response to the
     round-two solicitation to determine (1) if the evaluation teams’ and
     Board’s evaluations were done in accordance with the Board’s plan and
     procedures, and (2) whether the Board and evaluation teams consist-
     ently applied and evaluated the proposals in accordance with the pro-
    ject evaluation criteria.

    To determine how the final projects were selected for funding, we inter-
    viewed DOE'sproject selection official and reviewed his selection report
    to see how he applied the program’s selection criteria in choosing
    projects. We also compared the projects selected with the Board’s over-
    all ranking of the proposals.

    We also reviewed DOE'SFinancial Integrity Act reports to determine
    whether DOEhad identified any management control weaknesses regard-
    ing the process for developing the solicitation and evaluating the pro-
    posals We conducted our review from June 1988 through September
    1989 in accordance with generally accepted governmental auditing stan-
    dards. In accordance with the Subcommittee Chairman’s request, we did
    not obtain official agency comments on a draft of this report. However,
    we did discuss the information in this report with DOEprogram officials
    and have included their comments in the report where appropriate.




    Page 11                                   GAO/RCED-90-W   Clean Coal Technology
DOE’s Criteria and Processfor Evaluating and
!!3&xthg Projects

                         DOEdeveloped an elaborate process for evaluating and selecting round-
                         two clean coal technology projects. The criteria used to evaluate project
                         proposals generally conformed to legislative and regulatory require-
                         ments and other program guidance. Also, the criteria appeared to be
                         consistently applied during the evaluation process.

   1
                         The objective of the round-two CCT program was to select and cost-
Ro$md-TwoCCT             share projects that would demonstrate innovative clean coal technolo-
Prdgram Objective        gies that are (1) capable of being commercialized in the 199Os, (2) more
                         cost-effective than current technologies, and (3) capable of achieving
                         significant reductions of SO, and NO, emissions from existing coal-burn-
                         ing facilities, particularly those that contribute to transboundary (cross-
                         ing the border to Canada) and interstate pollution. The emphasis on a
                         technology’s emissions reduction potential was linked to the recommen-
                         dations contained in the special envoys’ report on acid rain, as discussed
                         in chapter 1, and represents a major shift in program focus from the
                         round-one project solicitation. The first solicitation was directed at dem-
                         onstrating a broad slate of technologies to enhance the use of coal for all
                         market applications and did not focus on the technologies’ potential for
                         controlling emissions from coal combustion. (App. II provides a descrip-
                         tion of the types of clean coal technologies.)


                         DOE'Sregulations establish uniform policies and procedures for all DOE
Selkction Official and   financial assistance awards. For awards with expected values of over
Board                    $10 million, the regulations require that a Source Evaluation Board be
                         established to solicit and evaluate proposals and a Source Selection Offi-
                         cial be appointed to select projects. On December 7, 1987, the Under Sec-
                         retary of Energy appointed the Principal Deputy Assistant Secretary,
                         Office of Fossil Energy, as the selection official. He was responsible for
                         (1) appointing the Board, (2) reviewing the Board’s project evaluation
                         and selection criteria, and (3) selecting projects.

                         The selection official appointed the Board on December 8, 1987, to pre-
                         pare evaluation and selection criteria and to evaluate proposals, The
                         Board consisted of seven voting members, including the Chairman, two
                         legal advisors, and an executive secretary. Eight of the 10 members
                         were from DOEheadquarters, and 2 were from DOE'Stechnology centers.
                         (App. III provides a chronology of events leading to the selection of the
                         program’s second-round projects.)




                         Page 12                                   GAO/RCED-90-67   Clean Coal Technology
     ,




                                       Chapter2
                                       DOE’s Criteria   and Process for Evaluating
                                       and Selecting Projects




         /
         I
                                       DOEemployed a four-phase evaluation process for evaluating and select-
Evz#luationand                         ing projects from the 66 proposals submitted in response to the round-
Sel&tion Criteria                      two solicitation. As shown in table 2.1, a total of 24 criteria were used
                                       during the four phases to evaluate and select projects.

Table 4.1: Evaluation Phases Used in
Select(ng Round-Two Projects           Phases                              Purpose
                                       Qualification (6 criteria)   Prescribe basic program qualifications that proposed
         ,                                                          projects must meet to be considered for preliminary
                                                                    evaluation, e. projects must use U.S. coal and be located
                                                                    in the United F tates.
                                       Preliminary evaluation (3    Prescribe standards by which proposals will be evaluated to
                                       criteria)                    assure that they address program objectives and contain
                                                                    sufficient technical, cost, and other information to undergo
                                                                    comprehensive evaluation.
                                       Comprehensive evaluation (11 Prescribe specific technical, business and management,
                                       criteria)                    and cost criteria on which proposals will be evaluated.
                                       Selection (4 criteria)       Prescribe four program policy factors to consider in
                                                                    selecting projectsa
                                       aDOE’s round-two solicitation identified three program policy factors and one other factor to consider in
                                       selecting projects. We refer to these four factors as program policy factors.


                                       (App. IV provides more detailed information on the criteria used in eval-
                                       uating and selecting projects.)

                                       According to members of the Board that we interviewed, the process
                                       used to develop its evaluation and selection criteria was an informal
                                       process within DOE.The process was also systematic, according to DOE
                                       officials. Our analysis of the 24 criteria used to evaluate and select
                                       projects showed that, although developed in an informal manner, the
                                       criteria generally conformed to DOE'Sregulations and specific legislative
                                       and program guidance. For example, congressional legislation concern-
                                       ing the CCT program requires that at least 50 percent of a project’s cost
                                       be provided from nonfederal sources. Other congressional guidance pro-
                                       vided that the projects be located in the United States and use US. coal.
                                       These requirements were included in the qualification criteria.

                                       Also, the Congress, the special envoys’ report, and the Innovative Con-
                                       trol Technology Advisory Panel report recommended that the potential
                                       for reducing nationwide emissions and the cost-effectiveness of control-
                                       ling emissions be used as program criteria. These elements were
                                       included as two of the comprehensive evaluation criteria. Furthermore,
                                       all three of the preliminary evaluation criteria were developed in




                                       Page 13                                                    GAO/RCED-90-67      Clean Coal Technology
                          Chapter 2
                          DOE’8 Criteria and Process for Evaluating
                          and Selecting Projecta




                          accordance with program regulations, and all four program policy fac-
                          tors that were to be considered in selecting projects followed guidance
                          provided by the Congress, the special envoys’ report, the advisory
                          panel, and the Vice President’s Task Force on Regulatory Relief. (App. V
                          provides additional information on the guidance that DOEused in devel-
                          oping its proposal evaluation criteria. App. VI lists each of the evalua-
                          tion and selection criteria and identifies the sources used in developing
                          the criteria.)

   1

                          The Board developed an evaluation plan and established teams of
Edduation Process         experts to assist it in evaluating project proposals. The evaluation plan
and Results               described the procedures for the qualification and preliminary reviews
                          as well as for the comprehensive evaluations.


Qudlification Review      The plan required each proposal to be reviewed initially to ensure that it
                          met the six qualification criteria. To satisfy this requirement, the
Phqse                     Board’s procurement member and at least two other Board members
                          reviewed the proposals to determine if they met all six criteria. Propos-
                          als found deficient were reviewed by the Board, who then voted
                          whether to recommend to the selection official that the proposal be dis-
                          qualified. This process resulted in 6 of the 66 project proposals being
                          disqualified from further consideration. For example, five of the propos-
                          als did not meet the qualification criterion which required that the spon-
                          sor agree to provide at least 50 percent of the project’s cost for each
                          phase of the demonstration. Also, five proposals did not contain a plan
                          to repay the government’s investment in the project should the project’s
                          technology be commercialized.

                          As mentioned in chapter 1, we tested 11 proposals to determine whether
                          the evaluations were done in accordance with the Board’s plans and pro-
                          cedures and whether the evaluation criteria were consistently applied to
                          the proposals. Our review disclosed that 9 of the 11 proposals met the
                          qualification criteria, while 2 did not. These two proposals were
                          included in the six proposals that the selection official disqualified.


Prelimi nary Evaluation   The Board used evaluation teams to assist it in the preliminary evalua-
                          tion phase of its review of the remaining proposals. For this phase, the
Phase         J           teams reviewed each proposal to determine if it contained sufficient
                          information to undergo a comprehensive evaluation. When a team found
                          that a proposal lacked sufficient information for further evaluation, two


                          Page 14                                     GAO/RCED-90-W   Clean Coal Technology
                            Chapter 2
                            DOE% Criteria and Process for Evaluating
                            and Selecting Projects




                            Board members reviewed the team’s findings. If the members confirmed
                            the team’s findings, the Board reviewed the proposal and voted on
                            whether they should recommend to the selection official that the propo-
                            sal be disqualified from further consideration. This process resulted in
                            one additional proposal being disqualified.


Co ‘prehensive Evaluation   The 48 proposals that met the qualification and preliminary evaluation
Pha,                        criteria underwent comprehensive evaluation. This phase of the evalua-
  7 e                       tion process was the most detailed because it addressed the technical
                            merits of each proposal, the business and management structure and
    I                       plan for conducting the demonstration and commercializing the technol-
                            ogy, and the reasonableness of the estimated project costs.

                            As shown in figure 2.1, the Board established seven teams of experts
                            consisting of about 100 DOEstaff in technical, environmental, procure-
                            ment, and other areas to evaluate the proposals. This approach was
                            used in this phase because of the degree of expertise needed to review
                            each proposal. Also, through legislation appropriating funding for the
                            CCT program, the Congress mandated that DOEcomplete its evaluation
                            and selection of projects within 160 days after the solicitation’s closing
                            date.

                            The teams were instructed to describe each proposal’s strengths and
                            weaknesses and to rate the proposal for each criterion assigned to the
                            team. The instructions contained work sheets that included a section for
                            describing the proposal’s strengths and weaknesses, a summary state-
                            ment of the strengths and weaknesses, and a rating. The instructions
                            also described what justifies certain ratings. For example, an excellent
                            rating was justified when the proposal’s strengths were substantially
                            greater than its weaknesses, which were of minor or little importance.
                            Our review of the nine randomly selected proposals that were compre-
                            hensively evaluated showed that the team evaluations were done in
                            accordance with the Board’s written procedures for evaluating propos-
                            als. The results of the team evaluations were submitted to the Board for
                            its evaluation.


Board’s Evaluation and      Using the team evaluations in conjunction with its own review of the
Rabking      u              proposal, the Board also evaluated and rated each proposal against the
                            comprehensive criteria. These evaluations were first done individually




                            Page 16                                    GAO/RCED-90-W   Clean Coal Technology
                                                  Chapter 2
                                                  DOE’s Criteria and Process for Evaluating
                                                  and Selecting Projects




Figur/t 2.1: Comprehensive     Evaluation Organkation Chart




                                                          t                         t
                                                                                                L
                                                                                                                                  t
   Demonstration
     ~Team                                                                      Business and          Business and
    @members)             Commercialization                                     Management            Management
                                Team                 Environment                   Team 1                                        cost
                                                        Team                                             Team 2
       ethnical             (10 members)                                        (4 members)           (4 members)             Evaluation
                                                     (8 members)
     4 oadiness                                                                                                                 Team
                              Nationwide                                        Financial           Commercialization        (2 members)
                                                      Nationwide             Condition, Plan,
    Adequacy,                  Emission                                                                  Plan
 Appropriateness,                                      Emission              and Capability                                     Projects
                              Reduction               Reduction
 and belevance of              Potential                                                                Sponsor’s              Estimated
  Demonstration                                        Potential              Sponsor’s                                           cost
                                                                                                       Credentials,
                                 Cost-                                      Commitment to            Experience, and
   Tephnical and             Effectiveness               EHSS=
                                                                             Project and               Resources
                                                                           Commercialization




                                              .
                               Technical
                               Evaluation
                                 Team
                             (65 members)
                              Technical
                              Readiness
                             Adequacy,
                          Appropriateness,
                           and Relevance
                          of Demonstration
                             Technical and
                             Management
                               Approach


aEnvironmental, health, safety, socioeconomic, and other site-related aspects

                                                  by each Board member. The Board then discussed the individual evalua-
                                                  tions and reached a consensus on each proposal’s strengths and weak-
                                                  nesses for each of the criterion. The identified strengths and weaknesses




                                                  Page 16                                                GAO/RCED-90-67   Clean Coal Technology
Chapter 2
DOE’s Criteria and Prows   for   Evaluating
and Selecting Projects




found by the Board members were consistent with the evaluation teams’
assessments for the nine randomly selected proposals we reviewed.

The Board used a quantitative scale to rate the technical merits of each
proposal and a qualitative scale to rate the business and management
criteria. The six technical criteria were rated on a scale of 0 to 100, in
accordance with the evaluation plan. Scores of 39 or less meant that the
proposal was considered to be weak in meeting the particular criterion.
After discussing the proposal’s strengths and weaknesses for each of the
applicable technical criterion, the Board developed a consensus of the
proposal’s strengths and weaknesses and developed a final score by cri-
terion Next, the weights contained in the plan for each of the six crite-
ria were applied to the final scores to arrive at a weighted technical
score for each proposal.

The Board used a rating scale ranging from unsatisfactory to excellent
to rate each of the four business and management criteria. (The scale
consisted of eight categories: unsatisfactory, poor, fair, good minus,
good, good plus, excellent minus, and excellent.) The Board considered a
proposal to be weak in meeting a criterion if it was rated unsatisfactory
or poor. When the Board developed its consensus strengths and weak-
nesses, it also developed a consensus rating for each proposal for each
of the four criteria. Finally, the Board applied the weights contained in
its plan to the criteria rating to arrive at an overall consensus business
and management rating for each proposal.

The Board also considered the reasonableness, allocability, and allowa-
bility of each project’s proposed cost but did not assign either a numeri-
cal or qualitative rating to this criterion as it did with the technical and
business and management criteria. DOE’S financial assistance regulations
provide that project costs are not to be rated.

After completing its evaluations, the Board developed a consensus rank-
ing of the proposals. In developing this overall ranking, the Board used
its numerical technical scores, the adjective business and management
rating, and the relative importance of the technical, business and man-
agement, and cost criteria, as stated in the solicitation. According to the
solicitation, the technical criteria are of somewhat greater importance
than the business and management criteria. Cost was viewed to be of
minimal importance relative to the other criteria except when every-
thing else was equal, in which case cost became a deciding factor.




Page 17                                       GAO/RCED-90437   Clean Coal Technology
                          Chapter 2
                          DOE’s Criteria and Process for Evaluating
                          and Selecting Projects




                          These results were presented in a report to the selection official. Among
                          other things, the report contains the Board’s ranking of the proposals
                          and information on each proposal, including its strengths, weaknesses,
                          and rating for each criterion except cost.


                          After the 48 round-two project proposals were evaluated, DOE’sselection
Sel/xtion Official        official chose 16 projects for funding under the CCT program. In choos-
Processfor Choosing       ing the projects, the selection official first considered the Board’s techni-
Prqjects                  cal criteria evaluations since they were of somewhat greater importance
                          than the other criteria, and then the Board’s business and management
   ,                      and cost criteria evaluations. He also considered other information, such
                          as the potential environmental impact of the proposed projects, and
                          applied the selection criteria to select projects from the submitted pro-
                          posals that would best satisfy the program’s goals and objectives.

                          The criteria     used to select projects consisted of four program policy fac-
                          tors. Three     of the factors were to ensure that the selected projects, taken
                          collectively,    complied with the program’s objectives, and included the
                          desirability    of selecting projects

                      l for retrofitting and/or repowering existing coal-fired facilities that col-
                        lectively represent a diversity of methods, technical approaches, and
                        applications (including both industrial and utility);
                      l that collectively produce some near-term reduction of transboundary
                        transport of emitted so, and NOx; and
                      . that collectively represent an economic approach applicable to a combi-
                        nation of existing facilities that contribute significantly to trans-
                        boundary and interstate transport of so, and NO, emissions in terms of
                        facility types, sizes, and coal types.

                          In addition to these three factors, the selecting official was to consider
                          giving preference to projects in states where the state’s rate-making
                          bodies treat clean coal technologies the same as pollution-control
                          projects or technologies.

                          In applying the above criteria, the selection official told us that he
                          attempted to pick projects that represented a number of different tech-
                          nical approaches and methods. In each case, he picked the proposal that,
                          in his judgment, represented the best overall project within the technol-
                          ogy option, according to his review of the proposals and his knowledge
                          of proposed technologies.



                          Page 18                                       GAO/RCED-SO-67   Clean Coal Technology
              Chapter2
              DOE% Critmla and Procere for Evaluating
              and Selecting Projecta




              In addition, the selection official concluded that in no case was a non-
              selected project considered to be a better alternative to a selected project
              within the same technological grouping. Our review of the evaluation
              and selection results disclosed that the selecting official picked the high-
              est-ranked project for each technology selected for funding. No non-
              selected project with the same technical approach or method received a
              higher ranking than a selected project.

              We also found the selecting official’s selections to be consistent with the
              Board’s overall rankings. Nine of the 16 projects that were selected were
              the top 9 projects in the overall ranking by the Board. However, seven
              lower-ranked projects were selected to satisfy the program policy goal
              that projects representing a mix of technologies be included in the pro-
              gram. These seven projects represented different technologies and were
              the highest ranked within their technologies, although five of the seven
              were ranked below the 16th highest-ranked proposal.

   I

              The criteria that DOEdeveloped for evaluating round-two project propos-
Co$clusions
  I           als adequately considered congressional and other program guidance,
              and the comprehensive evaluation process that DOEestablished resulted
              in project proposals being consistently and thoroughly evaluated. DOE
              used the evaluation results, together with several broad program policy
              project selection considerations, to pick the highest-ranked projects for a
              variety of different technologies that it wanted to see demonstrated.




              Page 19                                    GAO/RCED-90-67   Clean Coal Technology
Best Projects Were Selectedbut Many Have
Limitations in Meeting DOE’S
Ekhation Criteria
                             As discussed in chapter 2, the major emphasis of round two of the CCT
                             program was to demonstrate technologies that can significantly reduce
                             nationwide emissions contributing to acid rain, Our review of DOE'S doc-
                             umented evaluation and selection results showed that the selecting offi-
                             cial picked the highest-ranked projects for the mix of technologies that
                             DOE wanted to see demonstrated. However, many of the technologies
                             may have limited potential to significantly reduce nationwide acid rain-
                             causing emissions from coal-burning facilities. Also, some of the selected
                             projects were rated weak in meeting other evaluation criteria. In fact,
                             half of the 48 project proposals fared poorly against 3 or more of the
                             evaluation criteria.

   I
                             Of the 16 proposals that were selected for cost-sharing assistance, DOE
Ev$luation Criteria in       determined that 12 were weak in meeting 1 or more of its comprehen-
Which Projects Were          sive evaluation criteria. The technologies to be demonstrated by nine of
Rat/cdWeak                   the selected projects were determined to have limited potential for
                             reducing nationwide emissions from coal-burning facilities, three
   1,
    /                        projects were rated weak in meeting the commercialization criterion,
    /                        and two in meeting the technical readiness for demonstration criterion.
    I                        Also, two projects were rated weak concerning their technical and man-
                             agement approach, and one concerning its financing plan.


SomeSelected Projects’       In assessing the emission reduction potential of a proposed project’s
Technologies Have Limi ted   technology, DOE considered the extent to which the technology, when
                             used at existing coal-fired facilities, could (1) reduce nationwide emis-
Nationwide Emission          sions of so, and NON and (2) reduce transboundary and interstate air
Reduction Potential          pollution.

                             DOE  determined that the particular applications (design concepts and
                             features) of the technologies to be demonstrated at 9 of the 16 selected
                             projects had limited potential for reducing emissions on a nationwide
                             basis. These nine projects are to receive about $281.4 million in federal
                             funds. As shown in table 3.1, the technologies’ nationwide emission
                             reduction potential for the nine projects with limited potential ranged
                             from 0.2 million tons per year to 2.2 million tons per year. In compari-
                             son, the technologies’ nationwide emission reduction potential for the
                             seven projects with greater potential ranged from 6.5 million tons per
                             year to 16.8 million tons per year.




                             Page 20                                    GAO/RCED-W-67   Clean Coal Technology
                                         Chapter 9
                                         Rest Pro.jecta Were Selectedbut Many Have
                                         Limitationa in Meeting DOE’s
                                         Evaluation  Criteria




Table $1: Nationwide Emission
Reduc on Potential for the 16 Selected   Million tons per year
                                         --
Projec 9”8’ Proposed Technologies                                                                        Sulfur          Nitro en
                                                                                                       dioxide               oxs de            Total
                                         Projecta                                                    emissions          emissions         emissions
                                         Stronger reduction potential
                                         A                                                                    12.6               4.2               16.8
                                         ii--                                                                 12.1               0.0               12.1
      l                                  C                 ---                                                12.1               0.0               12.1
                                         D
                                         -____---                                                              9.4               0.0                9.4
      I
                                         E                                                                     7.2               1.9                9.1
                                         F
                                         -.--~                                                                 5.4               3.7                9.1
                                         G                                                                     4.7               1.8                6.5
                                          Limited reduction potential
                                         -----
                                          H
                                          -.                                                                   0.0               2.2                2.2
                                          I
                                         --.~-_-                                                               1.2               0.3                1.5
                                         J..-- .-_I_--                                                         0.0               0.9                0.9
                                          K                                                                    0.0               0.9                0.9
                                          L            ______I.                                                0.5               0.2                0.7
                                          M
                                         ..--- ---                                                             0.4               0.0                0.4
                                          N
                                         .__-.--            - .____-                                           0.0               0.3                0.3
                                         0___.-__.-                                                            0.2               0.0                0.2
                                         P                                                                     0.2               0.0                0.2
                                         aWe did not identify the selected projects in this table by their title or sponsor because DOE is still in the
                                         process of negotiating cooperative financial assistance agreements with the project sponsors. We have
                                         therefore used an alphabetic letter.


                                         As previously mentioned, the administration’s July 1989 legislative pro-
                                         posal to amend the Clean Air Act calls for an annual nationwide reduc-
                                         tion of approximately 10 million tons in so, emissions below 1980 levels
                                         and 2 million tons in NO, emissions below projected 2000 levels by
                                         December 3 1,200O.

DOE’s Basis for Selecting Projects       In both rounds-one and -two, DOE'Spolicy has been to select projects rep-
With Limited Nationwide                  resenting as many different clean coal technologies as possible. Accord-
Emission Reduction Potential             ing to DOEofficials, the nine projects with technologies having limited
                                         potential for nationwide emission reduction were selected to provide
                                         technological diversity within the program. As discussed in chapter 2,
                                         our analysis of DOE'Sevaluation records showed that each of the nine
                                         projects was the highest-ranked proposal submitted for the particular
                    Y
                                         technology. The nine projects are to demonstrate various applications of
                                         the following technologies or processes: flue gas cleanup to control NO,




                                         Page 21                                                       GAO/RCED-90-67       Clean Cod Technology
                            Chapter 3
                            Rest Projecte Were Selected but Many Have
                            Llmltblona   lu Meetiug DOE’s
                            Evaluation   Criterla




                            emissions; coal preparation to reduce sulfur; atmospheric and pres-
                            surized fluidized-bed combustion to reduce so, and NO, emissions; and
                            industrial processes for reducing SO,emissions.

                            Several of the nine projects were selected to demonstrate technologies
                            that could be used to reduce NO, emissions on different types of boilers
                            in the utility industry-or   to demonstrate technologies for use in other
                            markets, such as steel and cement industries. While these technologies
                            have the potential to reduce emissions in the specific areas where they
                            can be used, their application is limited in significantly reducing nation-
                            wide emissions that cause acid rain. For example, according to the
                            Board Chairman, so, emissions account for about 80 percent of the total
                            acid rain-causing emissions from coal-fired power generating plants, and
                            NO, emissions account for about 20 percent. Therefore, technologies that
                            would only reduce NO, emissions were rated lower on the emission
                            reduction criterion than technologies that would reduce SO,emissions or
                            both so, and NO, emissions.

                            According to the Board Chairman, the atmospheric and pressurized flu-
                            idized-bed combustion technologies are expected to reduce emissions
                            and result in dollar savings per ton of emissions removed (compared to
                            scrubbers), should they be used at existing coal-fired facilities to meet
                            an increase in the demand for electricity. However, if increased generat-
                            ing capacity is not needed, these technologies would probably not be
                            used, and their application would be limited in reducing nationwide
                            emissions.

                            The other seven projects whose technologies were rated stronger in
                            meeting the nationwide emission reduction criterion are to demonstrate
                            various applications of the following technologies: advanced slagging
                            combustion; flue gas cleanup to reduce both SO,and NO, emissions, or
                            only so, emissions; and integrated gasification combined-cycle
                            technology.


Nonselected Projects With   Our review of DOE'sevaluation records showed that 14 of the 32 project
Strbnger Nationwide         proposals that were not selected for funding were rated to have better
                            potential for reducing nationwide acid rain-causing emissions than the 9
Err&ion Reduction           selected projects that were rated weak in meeting this criterion. How-
Pot;ential                  ever, 6 of these 14 nonselected proposals were rated weak in meeting
             *              four or more of the other comprehensive evaluation criteria. Thus, while
                            they were stronger on the emissions reduction criterion, their chances of



                            Page 22                                     GAO/RCED-90-67   Clean Coal Technology
                      Chapter 3
                      Rest Projects Were Selected but Many Have
                      Limitations  in Meeting DOE’s
                      Evaluation   Criteria




                      successful demonstration and commercialization were apparently weak-
                      ened by shortfalls in other areas.

    I                 Of the other eight nonselected proposals:

                    . Two were to demonstrate a technology for flue gas cleanup to reduce
                       so,. Our analysis showed that DOEselected another flue gas cleanup pro-
                      ject for funding that was ranked higher and had greater nationwide
                       emission reduction potential than these two nonselected proposals.
                   . Two were to demonstrate the integrated gasification combined-cycle
                      technology. These two proposals were also lower ranked and had less
                      potential for reducing nationwide emissions than the project DOE
                      selected to demonstrate this technology.
                   . One was to demonstrate an atmospheric fluidized-bed combustion tech-
                      nology and another was to demonstrate a pressurized fluidized-bed com-
                      bustion technology. Although these two nonselected proposals had
                      greater nationwide emission reduction potential than the two projects
                      that were selected to demonstrate these technologies, the selected
                      projects were among the four highest-ranked project proposals and were
                      rated stronger in meeting the other comprehensive evaluation criteria.
                   . One was to demonstrate a particular technology application for NO,
                      emission reduction, This proposal was ranked lower than the project
                      that was selected to demonstrate a similar technology application, and it
                      also was rated weak in meeting three of the evaluation criteria. The
                      selected project was one of the nine highest-ranked proposals and was
                      rated stronger in meeting the other evaluation criteria.
                   . One proposal was to demonstrate coal-cleaning processes combined with
                      post-combustion emissions control. This proposal was rated weak in
                      meeting three of the evaluation criteria. DOEdid not select any proposal
                      to demonstrate this technology.

                     As indicated above, if DOEhad picked more projects with greater poten-
                     tial to reduce nationwide emissions from coal-fired facilities, it would
                     have resulted in the selection of lower-ranked projects to demonstrate
                     technologies similar to those that were selected.


Other Weaknesses     Three of the 16 selected projects were rated weak in meeting DOE'Scom-
                     mercialization criterion. (Two of these three projects were also rated
                     weak regarding the emission reduction criterion.) The commercialization
            *        criterion was used to evaluate the adequacy of the sponsor’s plan for




                     Page 23                                      GAO/RCED-90-67   Clean Coal Technology
       Chapter 3
       Best Projects Were Selected but Many Have
       LJmitations in Meeting DOE’s
       Evaluation   Criteria




       bringing the technology from the demonstration to widespread commer-
       cial application in the 1990s. Part of the round-two CCT program objec-
       tive was to demonstrate technologies that were capable of being
       commercialized in the 1990s. The quality of the commercialization plan,
       along with other factors, such as demonstration results, affect the tech-
       nologies’ potential for commercialization.

       In evaluating projects’ commercialization plans, DOE considered the
       strategy proposed by sponsors for financing, licensing, manufacturing,
       and marketing the technology. DOE also considered the market potential
       for the technology, the role of project participants in the commercializa-
       tion process, and other factors affecting commercialization.

        Three of the 16 selected projects were also rated weak in meeting one or
        more of the following evaluation criteria: (1) the technical readiness of
        the technology for demonstration; (2) the adequacy and reasonableness
        of the technical and management approach to design, construct, and
        operate the project; and (3) the adequacy and completeness of the pro-
       ject’s financing plan. These criteria, along with others, relate to the pro-
       ject’s potential for a successful demonstration.

       Project financing, one of the criterion in which a project was rated weak,
       has been a problem in the CCT program, as we reported in March 1989.’
       Our report discussed DOE’S delays in completing the round-one project
       cooperative agreements, which occurred primarily because of the time it
       took to resolve sponsors’ problems with project financing and other bus-
       iness arrangements.

       Delays have also occurred in completing cooperative agreements under
       round-two and GAO’S past work has also shown that the funded round-
       one projects were experiencing coordination, equipment, and financing
       problems that have caused delays in completing project phases, cost
       overruns, and proposed project modifications.2




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

       “Views on DOE’s Clean Coal Technology Program (GAO/T-RCED88-47, June 22, 1988) and Status of
       DOE-Funded Clean Coal Technology Projects (GAO/T-RCED-89-26, Apr. 13,1989).



       Page 24                                               GAO/RCED-90-67     Clean Coal Technology



.--.                                                1’

                                                     ’   1
      .


                                           Chapter 8
          ,                                Rest Projects Were Selected but Many Have
                                           Llmltatlons  in Meeting WE’s
                                           Evaluation   Crit.erh




                                          Not only did many of the 16 selected projects have limited potential to
M ‘y Round-Two                            reduce nationwide emissions, but more than half of the 48 proposals
Pro
  7 osals Were Rated                      evaluated did not fair well in meeting this criterion. A large percentage
We ‘k in Meeting                          of the 48 proposals were also weak in more than one area. For example,
                                          60 percent of the proposals were rated weak in meeting two or more of
Sev1 ral Criteria                         the evaluation criteria, and 50 percent were rated weak in meeting three
                                          or more criteria. As shown in table 3.2, both the selected projects and
                                          the overall universe of project proposals were rated weak by DOEin
                                          meeting the same comprehensive evaluation criteria.

Table 3.2: Project Proposals Rated Weak
in Mee ,Ing Certain Evaluation Criteria                                                           Number of proposals rated
                                                                                                             weak
                                                                                                                          46
      /                                                                                            16 Projects    proposals
      ,                                   Criteria                                                   selected     evaluated
                                          Nationwide emission reduction potential                             9                  27
      i                                   Commercialization plan                                              3                  27
                                          Technical readiness                                                 2                 77
                                          Technical and management approach                                   2                  16
                                          Financial plan                                                      1                  14


                                          Although not a problem in the selected projects, one other criterion in
                                          which 17 of the 48 proposals were rated weak was in the adequacy,
                                          appropriateness, and relevance of the demonstration project to enhance
                                          technologies, techniques, or processes, and to provide new information
                                          that would enable the private sector to make rational commercialization
                                          decisions.


                                          As noted in chapter 1, in December 1989, WE selected 13 projects under
Funding of Future                         the round-three solicitation and expects to complete the negotiations for
Rounds                                    their funding by December 1990. This brings to 39 the total number of
                                          projects in the CCT program. Our past work has shown that problems
                                          have delayed finalizing project cooperative agreements, delayed comple-
                                          tion of various project phases, and extended the estimated completion
                                          dates for some projects. According to DOE,as of December 31, 1989,
                                          cooperative agreements had been signed with project sponsors for 13
                                          projects (7 of the 11 round-one projects and 6 of the 15 round-two
                                          projects) and 3 of the 13 projects were in the demonstration phase-no
                                          projects had been fully demonstrated.




                                          Page 25                                      GAO/RCED-90-67   Clean Coal Technology
              Chapter 3
              Rest Projects Were Selected but Many Have
              Limitations  in Meeting DOE’s
              Evaluation   Criteria




              In October 1989, under Public Law 101-l 21, the Congress appropriated
              $1.2 billion for funding rounds four and five of the CCT program, of
              which $600 million is to be made available beginning October 1, 1990
              and $600 million beginning October 1, 1991. This legislation also stipu-
              lated specific dates by which requests for project proposals are to be
              issued and projects are to be selected. The request for round-four pro-
              posals are to be issued by June 1, 1990, and the projects selected by
              February 1, 1991; the request for round-five proposals are to be issued
              by September 1, 1991, and the projects selected by May 1, 1992.

              Consistent with the legislation, DOEplans to request round-four project
              proposals in June 1990. However, based on the current status of the 39
              projects in the CCT program, it may be prudent to delay the planned
              solicitation and selection of additional projects until DOEobtains demon-
              stration results from some of the projects already in the program. This
              information could then be used to focus the remaining funds on the more
              promising technologies. The major drawback to delaying rounds four
              and five is that there could be some excellent project proposals that
              would not be considered for funding until a later date. However, if one
              assumes that the better projects would have been submitted during the
              first three rounds of the program, the chances of postponing the selec-
              tion of quality projects may not be that high-especially    when one con-
              siders the shortcomings DOEidentified with the projects proposals that
              were not selected in round two.


              Although most of the selected round-two projects fell short of meeting
Conclusions   all of DOE'Sproposal evaluation criteria, they were the best projects sub-
              mitted for the mix of technologies that DOEwas interested in seeing
              demonstrated. However, many of the technologies selected for demon-
              stration may have limited potential for achieving nationwide emission
              reductions when used at existing coal-burning facilities. Also, some of
              the selected projects may have difficulties in successfully demonstrat-
              ing, and ultimately commercializing, their technologies.

              With the emission reduction emphasis placed on the round-two solicita-
              tion, DOEcould have selected more projects with greater potential to
              meet the emission reduction criterion. However, if DOEhad picked more
              projects with greater potential to reduce nationwide emissions from
              coal-fired facilities, it would have resulted in (1) the selection of lower-
              ranked projects demonstrating technologies similar to the projects that
              were selected, and (2) projects selected which may not be successfully
              demonstrated or commercialized because of weaknesses in other criteria.


              Page 26                                     GAO/RCED-90-67   Clean Coal Technology
    \,

f
                        chnpter3
                        Beet ProjecU Were Selectad but Many Have
                        Limitadona  in Meeting DOE’s
                        JZvaluation Criteria




                        This could indicate that WE may have problems in identifying and fund-
                        ing additional promising clean coal technology projects in future rounds.

                        DOEplans to request round-four project proposals in June 1990 and the
                        fifth and final round in 1991. However, in view of the current status of
                        the projects already in the program, and the problems experienced to
                        date, we believe that the Congress needs to evaluate the pace and focus
                        of rounds four and five of the program. It seems that an evaluation of
                        the results of some of the current demonstration projects is needed
                        before DOEsolicits and selects additional projects under rounds four and
                        five of the program. This would allow DOEto make more informed deci-
                        sions regarding the identification, selection, and funding of the more
                        promising technologies in future rounds of the program and help ensure
                        that the funds allocated to this program are effectively and efficiently
                        spent.

    I

                        Given the current status of projects in the CCT program and in view of
Ma&em for               the nation’s current budget constraints, the Congress may want to con-
Cotisideration by the   sider amending the clean coal technology provision of Public Law lOl-
Congress                121 to direct DOEto delay requesting proposals and selecting projects for
                        rounds four and five until DOEobtains demonstration results from some
                        of the projects already under the program.




                        Page 27                                    GAO/R~SO87   Clean Coal Technology
Apghdix I

I&t of Projects SelectedUnder the Clean Coal
Technology Program’s SecondRound

               Sponsor                        Project                         Project location
               American Electric Power        Pressurized Fluidized-Bed       New Haven, West Virginia
               Service Corporation,           ;;;%stion   Repowering
               Columbus, Ohio
               The Babcock & Wilcox             Coal Reburning for Cyclone     Cassville, Wisconsin
               Companv, Alliance, Ohio          Boiler Nitroaen Oxide Control
               The Babcock &Wilcox              Demonstration of the SOX-      Dilles Bottom, Ohio
               Company, Alliance, Ohio          NOX-ROX BOX Post-
                                                Combustion Flue Gas
                                                Cleanup Process
               Bethlehem Steel Corporation,     Innovative Coke Oven Gas       Sparrows Point, Maryland
               Bethlehem. Pennsvlvania          Cleanina
               Combustion Engineering,          Innovative Clean Coal          Springfield, Illinois
               Inc., Windsor, Connecticut       Gasification Repowering
                                                Project
               Combustion Engineering,          Post-Combustion Dry            Yorktown, Virginia
               Inc., Windsor, Connecticut       Sorbent Injection Technology
                                                Demonstrationa
               Combustion Engineering,          WSA-SNOX Technology for        Niles, Ohio
               Inc., Windsor, Connecticut       Catalytically Reducing Sulfur
               and Snamprogetti, USA Inc.,      Dioxide and Nitrogen Oxides
               New York, New York               from Flue Gas
               Otisca Industries, Ltd.,         Production of Compliance       Oneida, New York; Syracuse,
               Syracuse, New York               OTISCA FUEL Coal Water         New York; Jamesville, New
                                                Slurry) and its L ombustion in York
                                                Retrofitted Industrial Boilers
               Passamaquoddy Tribe,             Innovative Sulfur Dioxide      Thomaston, Maine
               Thomaston, Maine                 Scrubbing System for Coal
                                                Burninq Cement Kilns
               Pure Air, Allentown,             Advanced On-Site Flue Gas      Gary, Indiana
               Pennsylvania
               ~-                               Desulfurization Process
               Southern Company Services,       Advanced Tangentially-Fired    Lynn Haven, Florida
               Inc., Birmingham, Alabama        Combustion Techniques for
                                               Reduction of Nitrogen Oxides
               Southern Company Services,      Advanced Wall-Fired             Rome, Georgia
               Inc., Birmingham, Alabama        Combustion Techniques for
                                              --Reduction of Nitrogen Oxides
               Southern Company Services,      Demonstration of the            Newman, Georgia
               Inc., Birmingham, Alabama       Chiyoda Thoroughbred-121
                                               Flue Gas Desulfurization
                                               Process
               Southern Company Services,      Selective Catalytic Reduction Pensacola, Florida
               Inc., Birmingham, Alabama       Technolo y for Control of
                                               Nitroaen 8 xides
               Southwestern Public Service     Circulating Fluidized-Bed       Amarillo, Texas
               Company, Amarillo, Texas        Repowering Project
               TransAlta Resources             Low Nitroaen Oxide/Sulfur       Marion. Illinois
               Investment Corporation,         Dioxide BGrner Retrofit for
               Alberta, Canada                 Utility Cyclone Boilers
               aProject withdrew




               Page 28                                             GAO/RCED90437     Clean Coal Technology
Appendix II

Description of Clean Coal Technologies


                           DOEdefines clean coal technologies as any advanced coal-based system
                           that offers significant potential for improved environmental and eco-
                           nomic performance in utility and industrial applications. These technol-
                           ogies remove harmful emissions from coal prior to the coal combustion
                           process, during combustion, after combustion or by converting coal to a
                           cleaner burning liquid or gaseous fuel.


Pre-CIombustion            Pre-combustion technologies pertain to coal preparation or coal-cleaning
                           techniques that remove sulfur from coal before the coal reaches the
Technologies               boiler. Coal cleaning includes coal preparation and fuel upgrade.

      I

Comt)ustion Technologies   Combustion technologies include advanced combustion processes that
      //                   remove so, and/or NO, emissions while burning coal inside the combustor
       I                   or boiler. so, emissions are controlled by using an agent, such as lime-
                           stone, to chemically react with and neutralize the so, while NO, emissions
                           are reduced by controlled or multi-stage burning. Combustion technolo-
                           gies may include retrofit technologies, which are added to existing
                           power plants to reduce emissions, or repowering technologies, which
                           replace or repower an existing plant’s boiler. Repowering technologies
                           reduce emissions and have the potential to increase plant efficiencies.
                           Examples of repowering technologies include atmospheric and pres-
                           surized fluidized-bed combustion. Retrofit combustion technologies
                           include limestone injection multi-stage burning, in-duct sorbent injection,
                           gas reburning, and advanced slagging combustors.


Post-Combustion            Post-combustion technologies consist of advanced devices for cleaning
Technologies               the flue gases released from coal boilers. These technologies include
                           advanced flue gas cleanup devices (which include combined SO,/NO, con-
                           trol, NO, control, so, control-injection, and so, control-tailgas), in-duct
                           sorbent injection, and advanced scrubbers.


Coal Conversion            The coal conversion process converts coal into a cleaner burning liquid
                           or gaseous fuel. Coal conversion includes the following generic technolo-
Technologies               gies: coal liquefaction, surface coal gasification, underground coal gasifi-
                           cation, and integrated gasification combined-cycle, a repowering
                           technology.
               *




                           Page 29                                    GAO/RCED-90-67   Clean Coal Technology
Appendix III                                  L
Chronology of Major Events Related to the CCT’
Program’s SecondRound

               Date                              Major event
               December 7,1987                   Selection official designated
               December 8,1987                   Source Evaluation Board established
               December 22,1987                  Public Law 100-202 sianed bv the Presidenta
               January 28,1988                   Draft solicitation issued
               February 5, 1988                  Public comments due on draft solicitation
               February 22, 1988                 Final solicitation issuedb
               March 15, 1988                    Pre-oroposal conference held
               May 23,1988                       Closing date for receipt of proposalsb
               May 31,1988                       Proposal evaluations started
               July 8, 1988                      Sponsors of proposals failing qualification or preliminary
                                                 evaluation notified
               July 29, 1988                     Evaluations completed
               September 8, 1988                 Board report issued to selection official
               September 27, 1988                Selection statement sianed bv selection officialb
               September 28, 1988                Selections announced
               BPublic Law loo-202 provided funding and other program guidance for round-two of the CCT program.
               bThe timing of these events was in accordance with Public Law 100-202,which established maximum
               time frames between the events.




               Page 30                                                GAO/RCED-9087      Clean Coal Technology
      \
Appenklix IV

Crhria Used to Evaluate and SelectProjects


          I

                                 The project must be located in the United States.
Quaiification Phase
Evaluation Criteria              The project must use U.S. coal(s).

                                 The sponsor must agree to provide at least 50 percent of total project
                                 cost with at least 50 percent in each project phase.

                                 The sponsor must have access to, and use of, the proposed site for the
                                 duration of the project.

                                 The sponsor project team must be identified and committed to fulfilling
                                 its role in the project.

                                 The sponsor agrees that, if selected, it will submit a plan to repay the
                                 federal government’s investment.


                                 The proposal must be consistent with the solicitation objectives.
Preliminary
Eva(uation Phase                 The proposal must contain sufficient technical, cost, and other informa-
Crit$ria                         tion, as described in the solicitation, to enable comprehensive
                                 evaluation,

                                 The proposal must be signed by a responsible official of the sponsor.

Comprehensive Evaluation Phase
Criteria ~                       ---.
                                 Technical
                                 -.l-__l-- Criteria
                                 National emission reduction   The extent to which the technology, when used at existing
                                 potential                     coal-fired facilities, can reduce national emissions of sulfur
                                                               dioxide and/or nitrogen oxide and reduce transboundary and
                                                               interstate air pollution.
                                 Cost effectiveness            The extent to which the technology, when used at existing
                                                               coal-fired facilities, is likely to improve the cost-effectiveness
                                 -.                            of controlling sulfur dioxide and nitrogen oxide emissions.
                                 Technical
                                 .---       readiness ---.     Technical readiness of the technology for demonstration. ---
                                 Adequacy,                     Adequacy, appropriateness, and relevance of the project to
                                 appropriateness, and          contribute to the enhancement of technologies, techniques, or
                                 relevance of demonstration    processes, and provide new information to enable the private
                                                               sector to make rational commercialization decisions.
                                 Environmental, health,        Adequacy and appropriateness of proposed approaches to
                                 safety, socioeconomic, and    meet and exceed all environmental, health, safety, and
                                 other site-related asoects    socioeconomic reauirements durina the oroiect.
                                 Technical and management      Reasonableness and adequacy of the technical approach to
                                 approach                      design, construct, operate, and if applicable, dismantle the
                                                               oroiect.
                                                                                                                          (continued)




                                 Page 31                                                GAO/RCED-90-67      Clean Coal Technology
                         Appendix IV
                         Crltmla Used to Evaluate     and Select Projects




                         Business and management criteria
                         Financial condition, plan,        Adequacy and completeness of the plan to finance the
                         and capability                    project.
                         Sponsor’s commitment to           Degree of priority placed by the team’s management on the
                         project and                       project and subsequent commercialization.
                         commercialization
                         Commercialization plan           Adequacy of the sponsor’s plan to commercialize the
                                                          technology in the 1990s.
                         Sponsor’s credentials,           Credentials, experience, and commitment of the sponsor, key
                         experience, and resources        personnel, and other resources needed to support the project.
                         Cost Criteria
                         Project’s estimated cost         Reasonableness,   allocability, and allowability.




Seiection Phase
Criteria
  1

Pragram Policy Factors   The desirability of selecting projects for retrofitting and/or repowering
                         existing coal-fired facilities that collectively represent a diversity of
                         methods, technical approaches, and applications (including both indus-
                         trial and utility).

                         The desirability of selecting projects that collectively produce some
                         near-term reduction of transported transboundary sulfur and nitrogen
                         emissions.

                         The desirability of selecting projects that collectively represent an eco-
                         nomic approach applicable to a combination of existing facilities that
                         significantly contribute to the transboundary transport of sulfur and
                         nitrogen emissions in terms of facility types, sizes, and coal types.

                         The desirability of encouraging the adoption of the technologies and
                         considering giving preference to projects in states where the state’s rate-
                         making bodies treat clean coal technologies the same as pollution-control
                         projects.




                         Page 32                                                GAO/RCED-90-W        Clean Coal Technology
Summary of Guidance Used in Developing
Evtiuation and Selection Criteria

                  DOE used the following guidance in developing its criteria for evaluating
                  and selecting project proposals under round-two of the CCT program.


                  DOE’S  Assistance Regulations (10 CFR Subchapter H) prescribed the
                  solicitation’s format and required that it contain the evaluation criteria,
                  including the relative importance assigned to each criteria, to provide
                  the basis for ascertaining significant distinctions among proposals. The
                  regulations also required that if other factors were to be used in select-
                  ing projects, they be specified in the solicitation. In addition, the regula-
                  tions contained criteria, such as the overall technical feasibility of the
                  project and the sponsor’s qualifications, that, to the extent applicable,
                  were to be considered in evaluating proposals. Since the regulations
                  were applicable to all assistance programs, the Board was permitted to
                  develop additional criteria applicable to the program’s goals in addition
                  to the criteria in the regulations.

   1


                  The regulations required the Board to use, to the extent practicable,
DOE Procurement   DOE’S procurement guidelines in developing the so1icitation.l The Board,
Guidelines        the selection official, and others who participated in the preparation of
                  solicitations and evaluation and selection of proposals are also to use
                  these guidelines. The guidelines required the solicitation to contain the
                  program’s evaluation and selection criteria, including its relative
                  weights or importance. The guidance also stated that the criteria con-
                  tained in the solicitation must be used to evaluate proposals and may
                  not be changed without the approval of the selecting official and an
                  amendment to the solicitation.


                  Congressional requirements for the program were contained in Public
Congressional     Laws 99-190 and 100-202. The Conference, Senate Committee on Appro-
Guidance          priations, and House Committee on Appropriations reports accompany-
                  ing these laws also provided guidance for the program. Public Law lOO-
                  202 incorporated the requirements of Public Law 99-190. This law
                  authorized DOE to fund up to 50 percent of the project’s cost.

                  The congressional reports contained guidance that was primarily techni-
                  cal in nature and involved the technology’s emission reduction, cost-
                  effectiveness potential, and applicability to existing facilities. The

                  ‘Acquisition Regulations Handbook, Source Evaluation Board, U.S. Department of Energy, (May
                  1984).



                  Page 33                                               GAO/RCED-SO-07     Clean Cod Technology
                          Appendix V
                          Summary of Guidance Used in Developing
                          Evaluation and Selection Criteria




                          reports also included general guidance, such as demonstrating a diver-
                          sity of technologies, requiring the project to be located in the United
                          States, and having the sponsor repay the government its investment if
                          the technology is commercialized.


                          In March 1985, President Reagan and the Prime Minister of Canada
Spkcial Envoys on         appointed special envoys to assess the problems associated with acid
A&d Rain                  rain and to recommend solutions. In January 1986, the envoys recom-
                          mended the following four project selection criteria.2

  I                   . The US. government should co-fund projects with the greatest potential
                        for emission reduction measured as a percentage of sulfur dioxide or
                        nitrogen oxide emissions removed.
  I                   . Among projects with similar potential, funding should go to those that
                        reduce emissions at the lowest cost per ton.
                      . More consideration should be given to projects that demonstrate retrofit
                        technologies applicable to the largest number of existing sources, espe-
                        cially those that, because of their size and location, contribute to air pol-
                        lution across the U.S.-Canadian border.
                      . Special consideration should be given to technologies that can be used at
                        facilities currently using high-sulfur coal.

                          In March 1987, the President directed DOE to select projects consistent,
                          as fully as practicable, with the envoys’ recommendations.


                          In response to a March 1987 presidential directive, DOE established the
Innovative Control        Innovative Control Technology Advisory Panel on April 27,1987, with
Technology Advisory       the Under Secretary of Energy as Chairman. This Panel, which advises
Panel                     DOE on funding and selecting projects for the CCT program, consisted of
                          39 members representing federal and state agencies, coal mining and
                          utility companies, environmental and citizen groups, unions, the
                          research community, and Canada.

                          At its first meeting on September 30, 1987, the Panel was briefed on the
                          program’s first solicitation, the draft appropriations bills, congressional
                          and envoys’ reports, and comments from the four public meetings. Using
                          this information, the Panel developed guidance for DOE to consider in
                          developing the program’s project evaluation and selection criteria. This


                          2,Joint Report of the Special Envoys on Acid Rain (Jan. 1986).



                          Page 34                                                   GAO/RCED-90-67   Clean Coal Technology
                        Appendix V
                        Summary of Guidance Used in Developing
                        Evaluation and Selection Criteria




                         guidance was presented to DOEin December 1987 and covered the pro-
                        ject’s technical and business and management aspects.”

                                                                                                                    --
                        In March 1987, President Reagan asked the Vice President’s Task Force
Vice President’s Task   on Regulatory Relief to examine incentives and disincentives to the dem-
For& on Regulatory      onstration and deployment of new technologies. The Task Force recom-
Reli&f                  mended that DOEconsider giving preference to projects in states that
                        offer regulatory incentives to encourage such technologies. On January
    ,                   23, 1988, the President accepted this recommendation.

    1

    I
                        To obtain the public’s views and comments on the program, DOE hosted a
Public Meetings         public meeting in each of the following cities in August and September
                        1987: Albuquerque, New Mexico; St. Louis, Missouri; Pittsburgh, Penn-
                        sylvania; and Washington, D.C. The results of these meetings were sum-
                        marized and furnished to the Board and the Advisory Panel for their
                        consideration.




                        “Report to the Secretary of Energy Concerning Factors to be Considered
                                                                                           ~---in the First Innovative Clean
                        Coal Technologies Program Solicitation (DOE/EH 0069, Dec. 1987).



                        Page 35                                                  GAO/RCED-90-67     Clean Coal Technology
Applendix VI
                                                                                                                            I
@mparison of Guidance Used in Developing
QUalification, Preliminary, and Comprehensive
Evaluation and SelectionCriteria
                                                                       Source of Criteria
                                                                           DOE Congressional                      Advisory
                                                  P.L. 99-190      regulations          reports                      panel
               Zualification    Criteria
               The project must be located
               in the US.                                                                             X                      X
               ~~~,Ps;oject must use U.S.
                                                                                                      X
               The sponsor must agree to
               provide at least 50 percent
               of total project cost with at
               least 50 percent in each
               project phase        ---_                      X                           -~-
               The sponsor must have
               access to, and use of, the
               proposed and alternate site
               for the duration of the
               proiect                                                       X                                               X
               The sponsor’s project team
               must be identified and
               committed to fulfilling its role
               in the project_-----                                          X                                               X
               The sponsor agrees that, if
               selected, it will submit a plan
               to repay the federal
               aovernment’s investment                                                                X
               Prelimlnary evaluation criteria                                                         ---.--_--
               The proposal must be
               consistent with the
               solicitation objectives
               -__---l_            _..-- ~                                   X
               The proposal must contain
               sufficient technical, cost,
               and other information, as
               described in the solicitation,
               to enable comprehensive
               evaluation
               --.-                                                          X       ____-                  -.-      .---    -
               The proposal must be
               signed by a responsible
               official
               -----_____of the sponsor ___-                                 X
                                                                     Source of Criteria
                                                 DOE              Congressional         Envoys’                   Advisory
               -.__-  --                 regulations                     reports   -___ report                       panel
               Comprehensive
                        -_.- evaluation criteria                              _______                      ___._~..___..-
               Technical
               --___           __--                                                  .-                   .--. __.      --~-..
               National emission
               reduction potential
               -_________-.___------.~                                           X - _____~~~.         X                  X
               Cost                                                                                                      X
               -.-- effectiveness
                      . ..--.-___  ..--                                          X                     X
               Technical readiness                        X                                                              X
                                                                                                              (continued)




               Page 36                                                 GAO/RCED-90-67           Clean Coal Technology
Appendix VI
Comparbon     of Guidance Used in Developing
Qulification,    Prelimimuy,  and
Comprehensive      Evaluation and
Selection Criteria




                                                        Source of Criteria
                                           DOE       Congressional         Envoys’            Ad::3
                                   reaulations              reports         retbort
Adequacy,
appropriateness, and
relevance of demonstration                                           X                X                   X
Environmental, health,
safety, socioeconomic and
other site related asoects                                           X                                    X
Technical and
management approach                            X                                      X
Business and manaaement
Financial condition, plan,
and capability                                 X
Sponsor’s commitment to
project and
commercialization                              X                                                           X
-__________
Commercialization plan                         X                     X                                    -X
Sponsor’s credentials,
experience, and resources                      X                                                          X
cost
Reasonableness,allocability
and allowability                               X
                                                                       Source of Criteria
                                                              Congressional   Envoys’ Advitix
                                                                     reports     report
Selection criteria
                -
Program policy factor@                                                                                -
The desirability of selecting projects for retrofitting
and/or repowering existing coal-fired facilities that
collectively represent a diversity of methods,
technical approaches, and applications (including
both industrial and utility)                                                 X            X               X
The desirability of selecting projects that collectively
produce some near-term reduction of transboundary
transport of emitted sulfur dioxide and nitrogen oxide                       X            X               X
ihe desirability of selecting projects that collectively
represent an economic approach applicable to a
combination of existing facilities that significantly
contribute to transboundary and interstate transport
of sulfur dioxide and nitrogen oxide in terms of facility
tvoes and sizes and coal tvoes                                               X            X               X
aOne other consideration in selecting projects was to consider giving preference to projects in states
where the state’s rate-making bodies treat clean coal technologies the same as pollution control
projects. This consideration is based on the Task Force on Regulatory Relief recommendation to give
such consideration and the Advisory Panel’s recommendation not to give any geographic preferences.




Page 37                                                     GAO/RCED-90-67    Clean Coal Technology
Apdndix   VII
    I
MBjor Contributors to This Report


            j
Resources,                     Marcus R, Clark, Jr., Advisor
Cokununity , and               Francis J. Kovalak, Assignment Manager
Ecbnomic
Debelopment Division,
Wbhington, DC.

      lade@hia       Re@ona1   Frank W. Imbrogno , Evaluator
Office




                 Y




                                                                        GAO/RCED-9087   Clean Cod Technology
www                            Page 38
i
Offit*ia.l   hsintw