Climate

The Clean Energy Bank: Financing the transition to a low-carbon economy

Last week House Energy and Commerce members approved by 51-6 an amendment to the Waxman-Markey bill offered by Rep. John Dingell (D-MI) to create a clean energy bank .  As Greenwire explained, the amendment would “create an autonomous Clean Energy Deployment Administration (CEDA) within the Energy Department” that would “provide a suite of financing options, including direct loans, letters of credit, loan guarantees, insurance products and others” for “energy production, transmission, storage and other areas that could reduce greenhouse gases, diversify energy supplies and save energy.”  CEDA must adopt a “portfolio investment approach” and “ensure no particular technology receives more than 30 percent of the total funding available.”  John Podesta and Karen Kornbluh explain why we need a clean energy bank in a post first published here.  The picture is of a worker makes adjustings before a section of a wind turbine is put into place at Energy Northwest’s Nine Canyon Wind Project near Finley, WA, the kind of clean energy project the bank could help accelerate.

The United States is falling behind in the space race of our generation””building long-term economic prosperity powered by low-carbon energy. China’s stimulus package invests $12.6 million every hour in greening its economy, for a total of $220 billion, twice as much as similar U.S. investments. Meanwhile, during the most recent economic expansion the average American family paid more than $1,100 a year in rising energy bills for U.S. policies that favor fossil fuels.

The choice is clear: continue with more of the same energy policies or transition to a clean-energy economy that creates millions of good jobs here in the United States and moves us off our dependence on foreign oil.

The creation of a new Green Bank could lead to the steady and reliable creation of clean-energy jobs and would be a crucial element of the transition to a clean-energy economy.

Working in partnership with the private sector, a well constructed, public Green Bank would open credit markets and motivate businesses to invest again. It would enable clean-energy technologies””in such areas as wind, solar, geothermal, advanced biomass, and energy efficiency””to be deployed on a large scale and become commercially viable at current electricity costs.

Designed along the lines of the proposals in this memo, a Green Bank is a critical part of an integrated strategy that would begin to build a strong foundation for broad-based economic growth and prosperity while allowing our nation to lead the world in the transformation to a global economy powered by low-carbon energy. An integrated clean prosperity strategy requires several elements that other nations are successfully pursuing, among them: putting a price on carbon, requiring utilities to replace some of their carbon-based energy resources with renewable energy, and jumpstarting investments in clean energy and efficiency.

Currently, both Congress and the American public are focused on proposed caps on carbon emissions and requirements that utilities increase their use of renewable energy and invest in energy efficiency. But far less public attention has been paid to the specific policies that will drive new capital investment into clean-energy technology. A Green Bank would facilitate the flow of private capital into renewable energy and efficiency projects on the drawing boards today. The hurdles a Green Bank would overcome are:

  • The still debilitating credit crunch.
  • The need for large-scale, predictable financing.
  • The lack of a financing track record for new clean energy.
  • The lack of scalable and standardized finance models for existing energy-efficiency technologies.
  • The lack of a fully built-out and tested transmission infrastructure.
  • The risk resulting from fluctuating fossil fuel prices.

Existing federal loan guarantees and tax incentives are critically important, but they are not enough given the scale of the clean-energy transition ahead of us and the financing obstacles in our path. Because loan guarantees and tax incentives are subject to extensions and appropriations by Congress, and have been allowed to lapse in the past, they lack the certainty that medium- to long-term debt financing requires.

Moreover, these guarantees and tax incentives require agency rulemakings that, once established, are difficult to change to meet changes in market conditions. Amid the current economic downturn this lack of flexibility is especially troubling. Companies losing money can no longer fully use the available tax incentives, and developers are struggling to find investors who can capitalize on the tax benefits from their projects. Neither loan guarantees nor tax incentives have the flexibility a Green Bank would enjoy in addressing critical barriers to investments.

Other countries are already deploying policies to create standards and financing to help transform their own economies with clean energy. The European Union launched its Emission Trading System in 2005, thereby encouraging efficiency and clean energy by putting a price on carbon. Germany used “feed-in tariffs,” requiring utilities to pay above market rates for renewable energy, to become a leader in solar energy. The European Investment Fund’s top priority is supporting Europe’s energy objectives. And the World Bank recently issued “green bonds” to raise funds for low-carbon programs in developing nations.

In Asia, China is investing $220 billion of its economic stimulus package in green programs””over 3 percent of its total gross domestic product of $4.4 trillion. South Korea is investing 1.2 percent of its total GDP, or about $30 billion, into new green strategies to drive their own economic recovery. Meanwhile, the United States is investing less than one half of 1 percent of our GDP on clean-energy stimulus programs.

Today, we have the opportunity to make the same choice that we have made throughout our history””to spur investments in critical new technologies and enjoy the broad-based economic growth that has made us the envy of the world. At each key juncture in our history we found a way to move forward and enjoy the resulting benefits that vastly exceeded the short-term costs. Cases in point:

  • Government support for private canals and railroads in the 19th century allowed products to find markets and knit together the new national economy.
  • The Tennessee Valley Authority, a government-owned entity created in the 1930s that developed the infrastructure to deliver electricity to and drive economic development of rural Appalachia.
  • Government spending during World War II created industrial technologies and manufacturing capacity that helped create the postwar economic boom.
  • The space race in the latter half of the 20th century led to new technologies and services that power our economy today, including robotics, new materials, and computer command-and-control systems that led directly to the invention of ARPANET, the precursor of the Internet.

Similarly, the Green Bank would allow the United States to ramp up investment in new renewable and efficient energy, using smart public policy to prime the pump for private investment into the growth of an entirely new industry while increasing U.S. competitiveness and enabling us to lead the transition of the global economy to a low-carbon energy platform.

Congress is already considering a number of proposals for a clean-energy financing mechanism. Senate Energy Committee Chairman Jeff Bingaman (D-NM) and Rep. Jay Inslee (D-WA) introduced the 21st Century Energy Technology Deployment Act, which would create a Clean Energy Deployment Administration, or CEDA, in the Department of Energy. The Senate Energy Committee has added Chairman Bingaman’s amendment creating a CEDA to its energy bill and the House Energy and Commerce Committee has added an amendment offered by Chairman Emeritus John Dingell (D-MI), Rep. Inslee, and Rep. Bart Gordon (D-TN) creating a CEDA to the American Clean Energy and Security Act. Separately, Rep. Chris Van Hollen (D-MD) introduced the Green Energy Bank Act creating an independent bank. It is critical that a financing mechanism for creating sustained private-sector financial support for our nation’s transition to a clean-energy economy be included in the final bill that the president signs. As President Barack Obama stated:

“The choice we face is between prosperity and decline. We can remain the world’s leading importer of oil, or we can become the world’s leading exporter of clean energy. We can allow climate change to wreak unnatural havoc across the landscape, or we can create jobs working to prevent its worst effects… The nation that leads the world in creating new energy sources will be the nation that leads the 21st-century global economy.”

Principles for establishing a Clean Energy Bank

The Green Bank’s mission should be to marshal a variety of well-established financial tools to work flexibly with the private sector. The purpose: To rapidly and affordably develop and deploy clean energy and energy-efficiency technologies that allow Americans to live, work, and produce using less energy and cleaner energy, creating new jobs and spurring economic growth while holding U.S. consumers harmless.

The Green Bank should prioritize projects that provide the fastest, cheapest, cleanest reduction in greenhouse gases and oil use””projects that today face market barriers in accessing debt financing or credit enhancement. Projects should be selected on a competitive basis according to the amount of carbon-emissions reduction or avoidance achieved but also including consideration of long-term market transformation benefits by supporting emerging technology categories.

The bank should support a diverse set of technologies and safeguard taxpayer funds. Concerns that capital-intensive investments in nuclear power could come to dominate the portfolio should be addressed by limiting the Green Bank’s investment in any single technology. The bank’s maximum leverage for an individual project as well as total government exposure should also be capped. In addition, the Green Bank should cover its own operating costs through fees charged for its services, and require that all parties to a transaction share some risk on every single deal. Finally, the Federal Credit Reform Act and Budget Enforcement Act should apply to ensure the bank’s accountability to Congress and provide assurance that the bank will not be taking on excessive credit risk whose potential losses could be borne by American taxpayers.

All projects should meet strong underwriting standards and appropriate risk management metrics. The Green Bank should take a portfolio approach to investing in projects, targeting projects that are riskier than the portfolio average, as well as projects that are less risky, for an overall return that is positive but below that required by the private sector.

The Green Bank should also facilitate private-sector investments, not crowd out private investors. The bank should work closely with private banks to provide loan guarantees, credit enhancement, and other financing tools to stimulate private-sector lending and investment in projects that cannot access commercial financing on economically feasible rates and terms. Additionally, by working with the private sector, the Green Bank should foster the development and consistent application of various financing-related standards and data, such as underwriting standards, measurement and verification standards, performance data for energy efficiency projects, and financing products that will be needed to enable more effective risk management and support primary and secondary investment markets for such projects.

Funding for the Green Bank should be on the order of an initial $10 billion, with additional capital provided of up to $50 billion over five years. This capital could be leveraged at a conservative 10-to-1 ratio to provide loans, guarantees, and credit enhancement to support up to $500 billion in private-sector investment in clean-energy and energy-efficiency projects.

The Green Bank should ideally be structured as an independent, tax-exempt corporation, wholly owned by the U.S. government””similar to the Overseas Private Investment Corporation or the Export-Import Bank””and governed by a board of directors of relevant Cabinet members and additional members with relevant industry and finance experience appointed by the president with staggered terms. This will give it both the flexibility and accountability it needs.

Download this memo (pdf)

25 Responses to The Clean Energy Bank: Financing the transition to a low-carbon economy

  1. James says:

    What is ironic to me is that the global warming movement calls itself “green” when the evil co2 is what is makes the planet green. Think about it, without co2 there would be no green planet and no life. The reality is that the “green” movement is actually anti green. Hmmm.

  2. Terry says:

    The facts are “… looking at the Waxman-Markey Climate Bill that is now being considered by Congress, CO2 emissions from the U.S. in the year 2050 are proposed to be 83% less than they were in 2005 … or a reduction of 4,980mmtCO2 … [the models say,] even if the entire United States reduced its carbon dioxide emissions by 83% below current levels, it would only amount to a reduction of global warming of less than three-thousandths of a ºC per year. A number that is scientifically meaningless.”

    GCM computer models show that this program, in spite of its immense costs, will have virtually no effect on the amount of CO2 in the atmosphere in the future or on projected global warming.

    The question is why would anyone be proposing any type of tax payer supported financing for a bill that will virtually have no effect on the amount of co2 in atmosphere? I wish someone would answer this basic question before going off on a futile and wasteful effort that will not only not reduce co2 but cause great harm to the economy.

  3. Sam says:

    At the core of the Markey-Waxman bill is a set of misplaced priorities and objectives. Rather than embrace the scale of the energy innovation challenge and design policies necessary to spur the transformational innovation needed to overcome it, these green groups (and many who listen to them) have come to believe their own politically-motivated and self-propogated myth that “we have all the technologies we need” to fundamentally and completely transform our massive global energy system to a low-carbon at an urgent pace. They therefore design the policy in front of us: a weak carbon pricing effort coupled with requirements for improved energy efficiency and a clean energy deployment strategy (namely a renewable electricity standard) only capable of driving the deployment of already mature and relatively affordable clean energy sources like wind power and conventional geothermal.

  4. Leland Palmer says:

    Very good and useful initiative, IMO.

    Traditional banks are tied in with the fossil fuel industries, and cannot be expected to treat renewable energy projects fairly.

    ExxonMobil, judging from the output of the Rockefeller dominated Council on Foreign Relations, for example, actively looks forward to the melting of the Arctic icecap so that they can go after the estimated 90 billion barrels of oil under our current polar icecap.

    ExxonMobil, traditionally Rockefeller controlled, has a close historical and financial relationship with JPMorgan/Chase. JPMorgan/Chase helped finance and profited from the development of the oil and fossil fuel industries, and has a financial conflict of interest in financing alternative energy projects.

    Great idea, IMO.

    With regard to some of the comments:

    Continued fossil fuel use and exploding CO2 concentrations may very well kill our biosphere.

    Include that in your profit and loss calculations.

    Second point: It may very well be possible to do solar photovoltaic, solar thermal, or wind energy more cheaply than fossil fuels. Hydropower is already very cheap. Providing all of that energy with essentially zero social or environmental cost should be encouraged, IMO.

    Certainly, it’s starting to look like the environmental costs of burning fossil fuels might be infinite – the destruction of our society at least and possibly the destruction of all life on Earth.

    Waxman/Markey is not perfect. But it is a good first step, and should be supported and nurtured and strengthened, I think.

    What I support is Waxman/Markey (to encourage growth in small to medium scale solutions), plus the socialist nationalization of the coal fired power plants and their conversion to carbon negative power plants (to make a significant impact).

    When you oppose Waxman/Markey consider the alternatives – one of which is socialist nationalization of the coal companies, at least, and possibly the oil companies as well. Another of the alternatives may well be destruction of the biosphere, by business as usual.

  5. Jim Beacon says:

    I guess this must is the right bill, from a political standpoint anyway, because it doesn’t make either side happy. That’s the inevitable result when political philosophies become the primary consideration in making policy, particularly scientific policy.

    As for Terry’s “facts”, since he doesn’t say where they come from, they are worse than useless. Of course reductions in the U.S. alone aren’t going to do the job. We’re passing a law for the United States because that’s what we have direct control over, but all the world is going to have to dramatically reduce CO2 emissions to have any real effect.

    We can’t do anything about the CO2 we’ve already put in the atmosphere over the past 140 years since the industrial revolution began and so, yes, what has happened so far as a result of our past actions will continue to happen even if we stopped all CO2 emissions today. That horse is already out of the barn. But just because you accidentally spilled gasoline on your house and it has caught on fire does not mean you continue to pour gasoline onto it.

    At this point, no one knows what dramatic worldwide CO2 reduction will achive, or how quickly, because we’re still understanding the effects that 140 years of people increasing CO2 in the atmosphere has had. But since it is now obvious that increasing the parts per million of CO2 in the atmosphere from 320 ppm in 1960 to 385 ppm today has resulted in significant accelerated warming, it doesn’t take a rocket scientist or a computer model to understand that reducing CO2 in the future will slow that process (and perhaps even start to reverse it over another 50 or 100 years, if we reduce emissions enough). C’mon, Terry, use some common sense — and think about the future of your children and grand children.

  6. Mike D says:

    I’m going to give James the benefit of the doubt and assume he’s joking. Surely nobody that simple-minded could survive this long on their own. Here’s an experiment to try by that logic: go stand in a room filled with 100% oxygen for an hour and see what happens. You need oxygen to live, right? So you’ll probably be fine.

  7. Leland Palmer says:

    Hi Mike D-

    And water is essential to life, too.

    So surely drowning in it MUST be beneficial.

  8. K L Reddington says:

    PaCO2 35-45 mm Hg are standard values for arterial blood gases.

    “Mike D Says:

    May 23rd, 2009 at 3:59 pm
    I’m going to give James the benefit of the doubt and assume he’s joking. Surely nobody that simple-minded could survive this long on their own. Here’s an experiment to try by that logic: go stand in a room filled with 100% oxygen for an hour and see what happens. You need oxygen to live, right? So you’ll probably be fine.”

    The Ohio anaesthesia machine carry a CO2 gas cylinder. CO2 is
    NOT a toxin. CO isn’t exactly a toxin but is is absorbed much more readily than O2 so it results in hypoxia.

    Drowning in water is not due to water as a toxin but due to hypoxia or a shortage of O2.

    Yes we all now plants would grow faster if CO2 levels increase. actually adding CO2 to water,(soda water) reduces water consumption by plants.

    James spoke well.

  9. no name says:

    I hope this doesn’t turn into another Fannie or Freddie or that people just don’t use this to line their own pockets.

  10. K L Reddington says:

    Leland Palmer Says:

    May 23rd, 2009 at 2:09 pm
    Very good and useful initiative, IMO.

    Traditional banks are tied in with the fossil fuel industries, and cannot be expected to treat renewable energy projects fairly.

    ExxonMobil, judging from the output of the Rockefeller dominated Council on Foreign Relations, for example, actively looks forward to the melting of the Arctic icecap so that they can go after the estimated 90 billion barrels of oil under our current polar icecap.

    Traditional lending is not related to industries but collateral and cash flow.

    I see many banks that do not due energy lending. The very few that do use independent reservior engenering firms to evaluate proven reserves or in other words, collateral and cash flow.

    I am a proponent of wind power and also know that wind farms can’t produce years of cash flow statments and audited financials to comply with good lending practices. They are incredibly huge loan risks.

    some of the top reasons to deny loans for wind farms include low performance estimates. Many are not in a position to produce at 90% and above.

    Many farms produce at around 20% of name plate capacity. As the farms age, may fro forma financials don’t lay out maintenance costs. Maintenence can be extremely expensive.

    The next reason banks to stay in compliance with lending regualtions shy away from wind farms is because the pro forma cash flow is loaded with tax incentives, grants and inducements which can be changed by legislation. GE Capital is aggresive because they make a lot of money on the turbines and blades. They bought Enron my guess 10 years ago.

    Leland your argument is emotional. The 2 banks my group started in the southwest answer to a lot of banking regulatory groups and we have a lot of neighboring banks that have no ag or energy in their portfolios.

    By far the largest risk of lending to a wind farm is input costs. The electricity coming out of my wall socket is very steady and I have tested it. I can’t tell if it was generated by nuclear or coal/steam turbine. I do know a nearby windfarm is up and producing electricity asking for a price that is very high. They will have their seasonal low production in august when demand is highest. Why should an energy user pay a premium for wind powered generation? It is a commodity.

  11. Leland Palmer says:

    Hi K.L. Reddington

    Why should an energy user pay a premium for wind powered generation? It is a commodity.

    Uh….wait for it….because…well…combustion of fossil fuels and CO2 concentrations increasing thousands of times faster than they ever have before appear to be destabilizing the climate and might kill all life on earth within a century or so?

    http://www.killerinourmidst.com

    Those methane catastrophes, let me tell ya, can be real profitable.

    You’ve seen my pet methane catastrophe? I call him Harry. I keep him around lest I have a spare biosphere I want to destroy.

    The economic arguments against clean energy seem to have a touch of insanity in them. Destroying the huge number of free services we receive from the biosphere in the name of economics is simply insane.

    What I favor is actually nationalization of the coal fired power plants and forcing their conversion to biocarbon fuel, oxyfuel combustion, a HiPPS topping cycle, and carbon storage by deep injection. The combination of the higher temperatures of oxyfuel combustion and a HiPPS topping cycle should make these plants as thermally efficient as existing coal fired power plants. The combination of biocarbon fuel and deep injection of CO2 make these plants carbon negative: they put CO2 back into the ground at the same time that they generate useful electricity.

    Both clean energy and carbon negative conversion of the fossil fuel power plants can be accomplished now. If implemented now the combination of large amounts of carbon neutral energy from the clean power plants, combined with the synergistic effect of the carbon negative power plants which actually sequester CO2 at the same time they generate useful electricity, might be able to turn the corner on this problem, and bring our formerly self regulating climate system back into control.

    Perhaps not, though. It may already be too late. We may already be past the tipping point.

    Billions of tons of methane, a greenhouse 25 times more potent than CO2 when its effects are averaged over a century, are ready to begin evolving from decaying organic matter in the northern latitudes, due to melting permafrost. The last estimate of carbon in the organic matter in the Arctic that I saw was 1.6 trillion tons. If any significant fraction of this is released quickly into the atmosphere (this process appears to be already occurring), we are toast, it appears.

    James Lovelock, possibly the formost expert in the world on the climate as a self-regulating system, realized that the system was “in failure mode” in 2004, and wrote a book called “The Revenge of Gaia” soon after that. He predicts 6 billion dead by 2100. Chances are, he is underestimating the threat, our of scientific conservatism.

    If you believe such arguments as you have presented, you need to change your mind. We need huge numbers of wind farms, huge numbers of solar plants, and we need to massively convert every coal fired power plant on the planet to a carbon negative power plant or close each one down, regardless of economic consequences.

    We’re in a race for survival, and you’re pinching pennies.

  12. Neil Howes says:

    Leland,
    While I agree with your sentiments that we need to stop burning coal and other Fossil Fuels, converting all coal plants to biofuels and using CCS has three problems;
    1) not enough bio-mass that can sustainably replace coal fired electricity
    2) limited CCS methods, limited places to store CO2 and problems of transporting
    3) an excuse to keep coal fired plants alive until “more research” can be completed, just as CCS is being used today to justify coal’s future.

    Better to stop all new coal fired electricity and replace existing coal fired plants one for one with nuclear or other renewable energy. Use bio-char conversion of agricultural bio-wastes on site, and store in soil profile. A proven technology, safe, decentralized and sustainable.

  13. russ says:

    It is empty headed to suggest that all coal fired plants can be converted to biofuels in the near future (probably distant future as well).

    The volumes to be produced and handled are extreme!

    I believe 99% plus of the writers on this topic know nothing about energy, energy density, materials handling or the technologies involved – they are just writing.

    Much like the ethanol bunch – common sense and realities are of no importance.

  14. Mike D says:

    “The Ohio anaesthesia machine carry a CO2 gas cylinder. CO2 is
    NOT a toxin. CO isn’t exactly a toxin but is is absorbed much more readily than O2 so it results in hypoxia.

    Drowning in water is not due to water as a toxin but due to hypoxia or a shortage of O2.

    Yes we all now plants would grow faster if CO2 levels increase. actually adding CO2 to water,(soda water) reduces water consumption by plants.

    James spoke well.”

    Are you serious? You think people are concerned about CO2 because they think it’s toxic?

  15. Leland Palmer says:

    Hi Neil Howes-

    While I agree with your sentiments that we need to stop burning coal and other Fossil Fuels, converting all coal plants to biofuels and using CCS has three problems;
    1) not enough bio-mass that can sustainably replace coal fired electricity
    2) limited CCS methods, limited places to store CO2 and problems of transporting
    3) an excuse to keep coal fired plants alive until “more research” can be completed, just as CCS is being used today to justify coal’s future.

    Better to stop all new coal fired electricity and replace existing coal fired plants one for one with nuclear or other renewable energy. Use bio-char conversion of agricultural bio-wastes on site, and store in soil profile. A proven technology, safe, decentralized and sustainable.

    Thanks for the input.

    Well, it’s either one or the other – close fossil fuel plants down or convert them. I siill prefer the conversion route. Answering your points:

    1) not enough bio-mass that can sustainably replace coal fired electricity

    I don’t think this is true. There is enough biomass, it’s just not conveniently located. To solve the transportation problem I suggest conversion of biomass to biocarbon by carbonization, which is decentralized. Biomass could be converted into biocarbon by small plants, perhaps transportable by truck, and the hydrogen in the biomass could provide the energy needed to dry it and carbonize it. Some combustible gases would be evolved at this point, and could be burned to generate small amounts of electricity.

    Conversion of biomass to biocarbon makes biomass as transportable as coal.

    Oak Ridge National Labs has located 1.2 billion tons per year of “waste” biomass in their “Billion Ton Vision” project available in the U.S. They used mostly agricultural waste and some forest waste.

    I suggest doubling or tripling that amount by cutting firebreaks through forests, harvesting charred trees after forest fires, clearing the forests of combustible undergrowth, carbonizing dead and insect killed trees, carbonizing manure from cows, planting biomass plantations, and importing biocarbon from Canada and shiploads of biocarbon from Central and South America.

    Chris Field says that burning forests from wildfires due to global warming may evolve as much as 500 billion tons of carbon by 2100. I suggest harvesting some of that biomass to fire protect those forests, and making them harder targets for wildfires. The biocarbon from that biomass would then be burned in carbon negative power plants, and sequestered underground.

    Very large quantities of biocarbon could be transported by ship or by biocarbon log pipelines, using coal log pipeline technology. Because biocarbon is cleaner than coal, though, it might actually purify the water used in the biocarbon log pipelines rather than contaminating it. Another possible transport system: transportation as carbon monoxide by pipeline, using a technology known as COSORB.

    2) limited CCS methods, limited places to store CO2 and problems of transporting

    I disagree here as well. Nobody likes CCS, and I don’t either. Having said that, there appears to be no other alternative if we want to put large quantities of carbon back underground, to compensate for our carbon sinks transforming themselves into carbon sources, and to put the approximately half a trillion tons of carbon we have poisoned the biosphere with during the industrial revolution back underground.

    If you listen to the fossil fuel industries, everything except the status quo has severe problems, and CCS is no exception. The status quo is profitable, and they don’t want to change.

    But one type of CCS, oxyfuel combustion, is capable of generating much higher combustion temperatures than combustion in air. Boilers can be smaller than with air combustion because heat transfer is better than with air combustion, and the higher temperatures offer the potential for increased Carnot efficiencies if that potential can be tapped.

    To tap the high temperature potential of oxyfuel, I suggest using HiPPS, a concept developed by our National Energy Technology Lab, as was oxyfuel combustion. Both of these technologies have been tried out on laboratory scale tests, work theoretically, and oxyfuel has been retrofitted to an existing small coal fired power plant, where it increased fuel efficiency by 6.7 percent. HiPPS was a major part of the Clinton era Combustion 2000 program, abandoned by the Bush administration.

    Between the two of them, oxyfuel and HiPPS should provide enough extra efficiency to pay for the CCS and for the cryogenic separation of oxygen from air. Oxyfuel combustion produces an almost pure stream of CO2, no post combustion carbon capture is necessary.

    Both oxyfuel and HiPPS can be retrofitted to existing coal fired power plants without much trouble.

    In one Clinton era Combustion 2000 proposal, the conversion of a coal plant to HiPPS increased the output of the plant from 40 MW to 72 MW, from increased efficiency.

    Transporting CO2 is no problem, by the way. This is done routinely, on large industrial scales, and is a mature technology, with few problems.

    Estimates of available storage volume in deep saline aquifers are in the trillions of tons of CO2, so lack of storage sites is not a significant problem, IMO. Longterm, we need to develop economical CCS as a carbonate, by mineral carbonation. Right now, though, we need to massively implement CCS by deep injection, to head off what appears to be a developing methane catastrophe.

    3) an excuse to keep coal fired plants alive until “more research” can be completed, just as CCS is being used today to justify coal’s future.

    Carbon negative energy schemes can be hugely synergistic in their effects. This is because such schemes simultaneously displace fossil fuels, generate useful electricity, put carbon back underground, fire protect forests, decrease methane production by decaying organic material such as urban waste and manure, and so on.

    If we were able to triple the ORNL 1.2 billion tons estimate, and convert 3.6 billion tons of biomass and carbonaceous waste into about a billion tons of biocarbon, we could completely replace coal in the coal fired power plants. This one measure could bring us very close to carbon neutrality as a society.

    Read and Lermit: BECS

    http://www.etsap.org/worksh_6_2003/2003P_read.pdf

    To bring the system back into control, we need to put carbon back underground. Otherwise, we are faced with a diminishing future, because CO2 stays in the atmosphere with a halflife of something like 100,000 years.

    Nothing else on earth can move carbon like the coal fired power plants.

    Let’s seize them, convert them, and use them to move carbon back underground.

  16. Dorothy says:

    James – Unless you really are joking, you should do a little more research on the effect of CO2 on plants. Start with “Climate myths: Higher CO2 levels will boost plant growth and food production” from New Scientist Magazine, May 16 2007
    http://www.newscientist.com/article/dn11655-climate-myths-higher-cosub2sub-levels-will-boost-plant-growth-and-food-production.html

    Here’s a clip: “However, while experiments on natural ecosystems have also found initial elevations in the rate of plant growth, these have tended to level off within a few years. In most cases this has been found to be the result of some other limiting factor, such as the availability of nitrogen or water.”

    Then, James, look at the findings of Duke University ecologist Robert Jackson and USDA Agricultural Research Service researchers, “End of ‘free ride’ on ecosystem CO2 absorption,” May 15, 2002
    http://www.eurekalert.org/pub_releases/2002-05/du-eo051502.php

    A quote: “We found that many of the plants’ physiological processes responded fairly linearly to increases in carbon dioxide, and plant production went up,” said Jackson. “However, production and soil carbon storage basically saturated above 400 parts per million, a CO2 concentration very close to the current one.

    “For me, this was the most interesting part of the study, because it indicates that we are now right at a threshold where the benefits of extra CO2 may not be all that great.” Particularly important, said Jackson, were the measures of soil nitrogen availability. Soil bacteria metabolize organic matter, mobilizing nitrogen as ammonia and nitrate, which serves as the plants’ nitrogen nutrient source

    “Our measurements showed that soil nitrogen decreased about threefold in a nonlinear way, such that as CO2 went up, available nitrogen went down,” said Jackson. “So that’s where the fundamental nutrient limitation of the system occurred. The decrease in nitrogen availability apparently constrains the ability of the plants to use extra CO2. ”

    And, James, stop and think about what the elevated level of atmospheric CO2 is doing to increase the acidity of our oceans. This science is disputed by no one, not even the most strident climate change deniers.

  17. Francis says:

    Simply, “progress”, so-called, is destroying the earth(land, air, water, vegetation, creatures) and perverting that which is Spirit(Light, Life, Truth, Love, Peace, Hope, Grace, Miracles, Faith, etc.) ;-(

    Postings have been made at TheDestructionOfTheEarth.Wordpress.com concerning such destruction and perversion and also concerning The Creator’s(GOD, Father) promise that HE will “destroy those who destroy the earth(HIS Creation)!” (Rev11:18c)

    Yet there is a Living, Lively Hope!

    However, such Hope is not for that which is of the earth, earthly and fleshly, but there is a Living, Lively Hope for that which is Spirit, Heavenly and Spiritual.

    Hope for that which is Spirit is Alive because “progress”, which is the product of mankind’s “imag”ination, can pervert, yet not destroy that which is Spirit! For that which is Spirit is Real, and that which is Real is Forever!

    So no matter how perverse this world’s systems of religion become, that which is Spirit can only be abused and perverted, not destroyed!

    That which is Spirit is Eternal…….

    As for that which is called “religion”.

    “Pure religion and undefiled before GOD The Father(Creator) is this, to visit the fatherless and widows in their affliction and to keep oneself uncontaminated by the world.” (James 1:27)

    Simply, every other religion is impure and defiled!

    As stated previously, “that which is called “”progress” is of mankind’s “imag”ination and can pervert, yet not destroy, that which is Spirit”, and so it is that this world, and it’s systems of religion, have their version of “Light”, which can be turned on and off;

    Their version of “Truth”, which is of the “imag”ination;

    Their version of “Love”, which should be called lust;

    Their version of “Peace”, which needs be enforced;

    Their version of “Hope”, which is but a desire for temporal “things”;

    Their version of “Faith”, which is powerless;

    Their version of “Grace”, which is the liberty to “do your own thing”;

    And sadly, the favorite color of this world’s religion is gray ;-(

    So come out of the shadows! And as is said by many, “Get Real”!

    Once again, “only that which is Spirit is Real, and only that which is Real is Forever”!

    Hope is there would be those who “see” that The Life is in and of The Spirit. Those who “see” will no longer have their portion with the multitudes who are destroying the earth(and, air, water, creatures, vegetation) and perverting that which is Spirit(Light, Life, Truth, Love, Peace, Hope, Faith, Grace, etc.) ;-(

    Simply, each breath(Spirit) you take is a revelation of The Source of Life.

    And “A Simple and Spiritual Life is the only Life that will survive!”

    Forever…….

    So “set your affections on Heavenly things” and be not of those “whose god is their bellies because they mind earthly things”. Be not of those who “love this world and it’s things” and who are “progress”ively destroying the earth(land, air, water, vegetation, creatures) and perverting that which is Spirit(Light, Life, Truth, Love, Peace, Hope, Faith, Grace, etc.)…….

    Peace, in spite of the dis-ease(no-peace) that is of this world and it’s systems of religion, for “The WHOLE world is under the control of the evil one” (1John5:19) indeed and Truth…….

    Truth is never ending……. TheDestructionOfTheEarth.Wordpress.Com

  18. Mike D says:

    Whoa.

  19. Leland Palmer says:

    I love a good technological solution.

    Pray while we roast.

    This seems like a truly original, creative real world solution!

    Thanks Francis!

  20. paulm says:

    I am convinced that coal plants will be taken over by governments and either closed or more likely converted as Leland states. It is really the only practical solution to the current crisis. Events are just happening too quickly.

    It will be only a matter of time (18 months or so) that the reality that is has to happen will be apparent here in North America and Europe.

    Look at Australia (and to some extent China) where Hell and High Water has arrived!

  21. Jim Beacon says:

    There is a very good interim conversion option for coal-fired power plants — one that is very quick, easy and relatively cheap. And it doesn’t require the near-impossible task of creating huge amounts of new biomass/biofuel overnight:

    Burning natural gas releases only half as much CO2 as burning coal does. We could rapidly convert our 600 coal power plants to burn natural gas instead. The technology for this already exists and several coal plants around the country have already been converted to burn natural gas. The U.S. has huge reserves of natural gas and already has an extensive pipeline distribution system in place. Some claim the existing system couldn’t handle the extra load, but it will take some time to covert all the plants. There is enough capacity in the system right now to get started converting some of them and we could expand the supply and pipeline system rapidly while we were building more conversion kits for the remaining plants.

    Burning coal in power plants accounts for roughly 24% of total U.S. emissions of CO2. By converting the plants to natural gas we could cut that down to 12% in just a few years, using existing technology, expertise, infrastructure and *jobs* already in place (and also create more jobs, of course). This would get us almost 3/4 of the way to the 17% Waxman-Markey target for 2020 and do it quickly with no pain — with nothing but economic gain for everyone (except for the coal industry, of course). By the time the natural gas started running low in 10 to 12 years, we would have bought ourselves the time to ramp up solar, wind, biomass, biofuel and yes, if it turns out to be absolutely necessary, maybe even a few carefully-considered and sited nuclear power plants. This plan is a win-win for everyone except the coal industry.

    I have been advocating this transitional solution for some time now, but no one seems very interested in the idea. It feels like the clean power movement has its own political agenda and pet solutions and that something this simple, quick, relatively cheap and generally politically acceptable to the “other side” doesn’t fit in with the plan.

  22. David B. Benson says:

    Jim Beacon — Looks good to me.

    Convince Drs. Chu & Obama.

  23. David B. Benson says:

    Jim Beacon — Take it one step further. One of the best uses for biomass is to produce biomethane of high enough quality to go into the natural gas pipelines. Some of this is alreaddy being done in the U.S. so it just needs scaling up. In the meantime, burn natural gas.

    That way you’ll make everybody except King Coal and the railroads happy.

  24. Neil Howes says:

    Jim,
    The problem with converting coal to NG is that the boilers cannot respond quickly to changes in demand. Many of these power plants are old, low efficiency will need replacing and its more sensible to replace with NG peak or NG combined cycle high efficiency. The CO2 released is only 35% of coal if you include the higher efficiency.

    With an expansion or nuclear or wind we will need more peak capacity. We need all the NG peak power possible, fortunately most new power is wind or NG.

  25. James Newberry says:

    The statement that we have plenty of “cheap” natural gas to repower coal plants has no basis in fact. Further, the idea that we should invest in a fossil solution that would lock in infrastucture for decades is foolish. Lastly, ignorance and fraud have no shortage in America as demonstrated by statements for “low carbon” energy such as fossil fuel or clean, green renewable atomic fission. These are what are called “dirty,” as in contaminating. The nuclear industry has not received new investment for decades in America and there are numerous reasons why, starting with economic infeasibility. Even Wall Street doesn’t want it. By definition, it is not “clean” or “renewable.”