An analysis of cost effective incentives for initial commercial deployment of advanced clean coal technologies

This analysis evaluates the incentives necessary to introduce commercial scale Advanced Clean Coal Technologies, specifically Integrated Coal Gasification Combined Cycle (ICGCC) and Pressurized Fluidized Bed Combustion (PFBC) powerplants. The incentives required to support the initial introduction of these systems are based on competitive busbar electricity costs with natural gas fired combined cycle powerplants, in baseload service. A federal government price guarantee program for up to 10 Advanced Clean Coal Technology powerplants, 5 each ICGCC and PFBC systems is recommended in order to establish the commercial viability of these systems by 2010. By utilizing a decreasing incentives approach as the technologies mature (plants 1--5 of each type), and considering the additional federal government benefits of these plants versus natural gas fired combined cycle powerplants, federal government net financial exposure is minimized. Annual net incentive outlays of approximately 150 million annually over a 20 year period could be necessary. Based on increased demand for Advanced Clean Coal Technologies beyond 2010, the federal government would be revenue neutral within 10 years of the incentives program completion.