Answer: The conversion of coal to other energy sources has only been popular in regions and countries where alternatives such as crude oil and natural gas have not been viable. As such, China has been one of the countries using and developing gasification and coal conversion technologies to meet their energy requirements. The dramatic increase in non-coal fossil fuel demand from developing countries, coinciding with rapid economic growth in China, have led to sharp price increases in those energy sources, making coal gasification financially competitive. Add to that a rising political and regulatory focus on emissions, and the desire for gasification increases even further.

 

 

Answer: It would appear the economics of scale and availability trump the alternatives. Because coal is critical for the production of steel – and without another economically viable method to manufacture steel for the transportation and construction industries – coal is virtually assured a prominent role worldwide for the next several decades. Those parties interested in substituting coal with another form of energy must develop many more breakthroughs in energy density, reliability, and scale on a far more rapid timetable if they want to displace coal.

 

 

Answer: All energy sources are experiencing improvement in nearly every aspect. From a cost perspective, the technology curve for solar looks most promising as efficiency increases and production costs follow the technology industry’s rate of change. Wind looks like a relative economic disaster because transmission logistics and the ability to manage turbines conspire with horrendous land management issues. Conversely, next generation coal technologies being commercialized today will have for many years, economic superiority over wind and solar. From a cost perspective, the real challenge is natural gas as the primary competitive alternative to coal.

 

Emissions for coal gasification versus wind and solar is an exercise in different societal tradeoffs in costs. The sizes of modern wind turbines require enormous amounts of steel made from coal furnaces. Solar panels use very toxic manufacturing processes and coal must still be mined.

 

In the area of subsidies, all energy forms tend to have some governmental programs. On a relative comparison, wind enjoys some of the best support in several large countries. But all future forms of energy should be encouraged and supported at the governmental level because it’s necessary to endure the unproductive and uneconomic portion of the development cycle in order to have any chance of eventual success. The private sector is not in a position to take on the risk of development alone.

 

If you want to go by the numbers, then we have to define the requirements a bit further. Next generation coal technologies create electricity at about twice the cost of old fashioned combustion. In the United States, that would make its primary economic rival – natural gas – at approximately eight cents per kilowatt without carbon dioxide sequestration. Of course, the natural gas industry must provide new storage sites that can be created to meet the size of the market and create a stable inventory for long-term reliability. Wind and solar can only compete with heavy subsidies, but both of those should have a better emissions profile over time. Gasified coal is likely to have superior emissions to natural gas.

 

So what will the global market choose in the end? Most likely it will be a mix of all-of-the above, plus nuclear.

 

Answer: It’s counter-intuitive because prior to five or 10 years ago, very little political attention was paid to emissions in China. The transformation we are witnessing now comes from China emerging as the second largest economy in the world. The wealth creation has pushed the Chinese government to address the desires of the most productive people in their country. That’s because they want higher standards of living, which includes air quality and other health-related matters.

 

The economic success also emboldens the Chinese companies to seek positions of global leadership to sustain their economic trajectory. In our industry, billions of dollars and dozens of utilities have been acquired by the Chinese in countries all over the world in an unprecedented move reminiscent of classic American global business exploits. Remaining the manufacturing center of the world is less desirable to leading an industry and commanding the prestige and financial rewards for innovation. Overall, it’s very similar to what the United States went through in the 1970s.

 

Answer: In the United States, these issues are very real. But International markets have striking differences. For example, construction costs are a fraction of the U.S. in almost all parts of the world except Western Europe. The urgency to address CO2 and climate change is greater in many markets outside the U.S., which translates into stronger political will.

 

What’s more, the history of paying higher prices for energy in many parts of the world fosters a greater level of acceptance for spending a larger percentage of the economy on cleaner power. When it comes to inexpensive alternatives, the greatest hurdle is the one presented by the incumbent use of burning coal. Combusting coal is such a protected and inexpensive practice in the world’s two largest economies (U.S. and China) that it naturally curtails how quickly the next generation of coal powered energy or almost any other energy source would be embraced.

 

 

Answer: Many large industries faced transitions from decades of low rates of change, followed by periods of rapid development. Telecommunications and the video industry are good examples of what may be in store for energy. One of the prime starting points to successfully navigate the coming changes is education in the marketplace about what roles will be required in the future and which types of companies are best able to serve.

 

We see a world coming to grips with the reality of massive population growth and urbanization, forcing new technologies to deliver greater energy density in far larger quantities. At the same time, they face increased environmental sensitivities. The role of fossil fuels and renewables will begin to meld into an acceptable state of necessary coexistence and development simply because the economics and math dictate such an outcome. But the inability to excise coal from the equation will drive the innovation cycle to make it better.

 

Overall though, it’s less daunting than previous innovation cycles, such as the need to treat sewage and address water quality for a growing world when the population was a fraction of what it is today. Humans have proven to be very good at adapting and sustaining.

 

 

Answer: Huaneng is the world’s largest power company and also the world’s largest generator of greenhouse gases. It’s a simple mathematical certainty that a 10 percent improvement in their emissions will impact the world more than a similar move from any other party. Better yet, they have the resources and have made the necessary investments to obtain global leadership in many aspects of clean power.

 

The magic is to take that technical leadership and combine it with some Yankee business ingenuity and skill to create a solution where any utility, government, or commercial buyer can purchase, deploy, and run these technologies with confidence that it will work in their country as well as it does in China. Large scale clean-tech solutions require long-term investments and very few companies are in a position to make the hundreds of millions of dollars and decades of commitment like Huaneng Power has done. They did it out of necessity for the sole benefit of China, but now the world has the opportunity to benefit from their investment as well.

 

 

Answer: The Chinese possess the technological leadership, as well as holding the front-runner position in commercialization. Several large plants using the latest gasification and ultra, super-critical technologies have been under construction for the last two years and will commercialize in 2011. It is reasonable to expect the high level of buzz already generated by these massive projects to intensify when they begin commercial operations.

 

Eastern Europe’s need for electricity and natural gas independence from the Ukraine and Russia is also providing a unique backdrop for that region to begin construction of such plants in the next 12 to 18 months. The toxic petroleum coke deposits from the crude oil refineries in South America and India also presents a timely market where mixing coal with the pet coke in a gasifier can generate power while eliminating an environmental biohazard. The United States, however, is lagging behind mostly due to a complete lack of regulatory clarity.

 

As prices for crude continues to rise, there are some opportunities to convert coal into chemicals and fuels in the United States. But the U.S.’s commercialization efforts are currently in the range of about 10 percent of China’s construction.

 

EmberClear’s Good Spring IGCC power plant in Pennsylvania has received all its permits and may begin construction this year. However, that would require the state and federal governments to make some decisions that have been debated and somewhat ignored for the last several years. If we get the right mix of support at the state level, we could go ahead and build the plant. However, for Good Spring to be duplicated many times in other parts of the country, the federal regulations and programs must have clarity. The U.S.’s political situation is beyond our ability to influence, so in the meantime, we will continue to stay busy with our many international projects.