Evaluating options for US coal fired power plants in the face of uncertainties and greenhouse gas caps: the economics of refurbishing, retrofitting, and repowering

Facing a cost for emitting carbon dioxide, U.S. entities that own coal-fired power plants have a number of options to pursue as alternatives to retiring the plant and investing in a new one with lower carbon emissions. These include: (1) continuing to operate business as usual and obtaining emission allowances as needed, (2) switching to or cofiring low carbon fuels, (3) retrofitting with carbon capture and sequestration (CCS), (4) repowering with an advanced coal technology incorporating CCS, and (5) refurbishing to improve plant efficiency in combination with any of the previous options. Markets for refurbishing, retrofitting, and repowering were assessed using data bases of existing coal fired power plants along with the Energy Information Administration's (EIA) National Energy Modeling System (NEMS) code, which was modified to undertake an integrated analysis of how retrofit and repowering options would compete with other options for managing the fleet of coal fired power plants. Sensitivities with respect to key uncertainties are presented, including carbon values, natural gas prices, CCS incentives, and system-wide cost effectiveness of refurbishing in conjunction with retrofitting or repowering. The indicated market for coal fired power plants that could be retrofitted with near commercial CCS technology under carbon cost scenarios ranging from 45 - 60 $/MTCO2e (metric ton CO2 equivalent) is on the order of 100 GW. A similar market is apparent for repowering, but with technologies that are as yet not commercialized. Below 30 $/MTCO2e, CCS technologies would not deploy without incentives. While refurbishing can extend the market for either retrofitting or repowering, its impact will depend on the extent to which efficiency as well as other cost related factors can be collectively upgraded. (C) 2008 Elsevier Ltd. All rights reserved.