According to a press release from Citigroup, the carbon principles are “…climate change guidelines for advisors and lenders to power companies in the United States. These Principles are the result of a nine-month intensive effort to create an approach to evaluating and addressing carbon risks in the financing of electric power projects.”

The principles were created in consultation with major players in the banking (Morgan Stanley and JP Morgan), energy (AEP, NRG, PSEG and others) and advocacy (Environmental Defense and Natural Resources Defense Council) industries.

These investment banks are signaling the beginning of a new era in energy project finance. The Carbon Principles are an acknowledgment that the future holds considerably higher costs for coal projects. As lenders, these institutions are taking a pro-active stance in defining the financial risks related to coal projects at a time when carbon taxes may be just around the corner.

The issue of financial risks related to coal projects has been addressed before. Last September, New York Attorney General Andrew Cuomo subpoenaed five energy companies to determine the level of disclosure that those companies have made to their investors with respect to the future financial risks of operating coal-fired power plants.

The subpoenaed companies are different from those involved in the carbon principles effort. And I have yet to hear of any action resulting from the subpoenas.

This morning the Washington post reported, “…the Bush administration might drop its support for a $1.5 billion coal-fired power plant designed to store greenhouse gases underground, citing mounting cost estimates and other possible technologies.” Later in the day Platts reported, “The US Department of Energy will likely divide some of its funding for the scrapped FutureGen power plant between a handful of carbon capture and storage projects…”

FutureGen CEO Michael Mudd responded via a press release by stating, “The Alliance remains committed to keeping FutureGen on track. We owe it to the people of Illinois, to the Alliance members who have contributed significant funds and resources to bring the project to this stage and to society which depends on technology to provide clean, affordable and secure energy.”

The reports of the redistribution of funds by the DOE seem to be accurate. In recent days there have been announcements of a variety of new clean energy projects including a partnership with the state of Hawaii, investment in cellulosic bio-refineries and funding for hybrid plug-in development in Michigan.

We’ll keep an eye on the DOE to see if any funds specifically slated for carbon capture and storage are announced in the near future.

In this video (click ‘read the rest’ to view) courtesy of E&E TV Future Gen Alliance CEO Michael Mudd explains the current situation.

According to the CARMA website, “CARMA reveals the carbon emissions of more than 50,000 power plants and 4,000 power companies in every country on Earth.”

I checked out the CARMA website myself today and found it to be pleasant on the eyes and chock full of information on carbon emitting power plants. If nothing else it is worthwhile to check your area and see what power plants are in the region.

The CARMA database contains information on generating plants worldwide and makes good use of color coding to show the different levels of carbon emissions for plants.

Dirty

Clean

There is also information on the companies that own the plants in question. In addition, CARMA is providing access to raw data files containing information from their database via file downloads or an Application Programming Interface (API).

While some may use this data as an opportunity to scream, “Gotcha!” at large power companies, the real value of this data lies in the fact that it can make the industrialists, politicians and the general public much more aware of the situation at hand.

The Technology

According to the Office of Science of the U.S. Department of Energy, “Carbon sequestration refers to the provision of long-term storage of carbon in the terrestrial biosphere, underground, or the oceans so that the buildup of carbon dioxide (the principal greenhouse gas) concentration in the atmosphere will reduce or slow.” In layman’s terms, you pump carbon into the earth instead of releasing it into the atmosphere.

The Possibilities

Carbon sequestration technologies will allow for the capture and disposal of carbon from fossil fuel plants without the release of harmful gases into the atmosphere. Developing nations and those with high demands for energy prefer fossil fuels for power generation because they provide a plentiful source of power at a low cost. The possibility of sequestration of carbon means that it will be possible to generate significant amounts of low-impact energy from plentiful sources of energy like coal.

The Challenges

The technology is as yet an unproven one. A large amount of financial resources are required to continue to study and perfect carbon sequestration as an option for cleaning dirty power sources. In addition, this technology requires that power plants be built from the ground up to support it. Therefore it seems that it won’t be possible to retrofit existing coal-fueled generators.

The Outlook

The United States is sponsoring a ten year pilot project with the goal of developing a zero emissions, coal-fueled power plant. Initiated in 2003, the FutureGen timeline calls for initial operations of this zero emissions plant beginning in 2013. While it seems that significant progress on carbon sequestration is a ways off, six years can pass sooner than we think. And while this technology is not ready for prime time now, it may prove to be a crucial clean energy source in a world where energy efficiency and renewables won’t be enough to meet rising worldwide energy demand.

Research Links

Wikipedia
FutureGen
U.S. Department of Energy
Carbon Sequestration Research Poster