Expected economic and CO_2 emission performance of two fossil-based technologies for providingnew electric generating capacity in the State of California in the time frame 2010-2030 arecompared. The two technologies are state of art natural gas combined cycle (NGCC) and coalbasedintegrated gasification combined cycle (IGCC). In the case of IGCC, it is assumed thatnominal 90% of the CO_2 emissions are captured, pressurized, and sold for use in conductingenhanced oil recovery (EOR) in the State. This version of IGCC that includes CO_2 sequestration isdubbed IGCC+S. The specific carbon emissions to the atmosphere (kg Cet kWh) of IGCC+Sare only about 1/5 those of NGCC.Previous analysis has shown that NGCC and IGCC+S are both more economic than a thirdapproach, capturing CO_2 from NGCC power plants. The present paper uses improved datadescribing process performance and cost of IGCC+S technology. It also describes two bases onwhich income tax credits might be established that would further improve the economics ofIGCC+S operation. One tax credit would support the extra capital and operating costs ofperforming CO_2 capture while generating electricity. The other tax credit would encouragemanagement of CO_2 EOR in oil fields so as to maximize the net storage of CO_2 in undergroundformations at the termination of oil recovery operations. The two income tax credits together wouldbe worth about 0.42 cents/kWh as described.Predicted costs of coal and natural gas and selling prices of electricity and CO_2 are used to estimateeconomic return of NGCC and IGCC+S plants installed in 2010 and operating 20 years. Bothtypes of plant are predicted to cover their expected returns on invested capital. Depending on theplant capacity factor (65% and 80% modeled), selling price of CO_2 ($0.65, $1.00, and $2.00/Mcfmodeled), the predicted price of natural gas in California in any given year, and whether thesuggested income tax credits are included, the economic return of one or the other technology ishigher. In summary, NGCC and IGCC+S appear to be very competitive for new generatingcapacity in California.
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