BURGIN — A pilot project to capture carbon dioxide from emissions at a coal-fired power plant in Mercer County could play a role in the future of coal, not just in Kentucky but elsewhere, officials said Monday.
It's a key issue for Kentucky because the state gets more than 90 percent of its electricity by burning coal, which faces increasing challenges from federal efforts to protect air quality and tackle climate change.
Those rules have influenced decisions by utilities around the country to mothball older coal plants in favor of cleaner-burning natural gas plants or other alternatives, and that has contributed to a steep slide in coal jobs in Eastern Kentucky since early 2012.
The technology that will be tested at Kentucky Utilities' E.W. Brown Generating Station is designed to upgrade coal-fired power plants to cut their carbon dioxide emissions, said Rodney Andrews, director of the Center for Applied Energy Research at the University of Kentucky.
If the project shows it is economically feasible to capture carbon on a large scale, it could help keep some coal plants in operation.
"We've still got a big challenge in front of us, but this is the start," said state Rep. Rocky Adkins, D-Sandy Hook, the House majority floor leader. "It could mean everything for Kentucky coal and coal throughout the nation."
Kentucky coal faces challenges aside from tougher environmental rules, including the low price of natural gas and, in the state's eastern coalfield, relatively high production costs.
The U.S. Environmental Protection Agency has announced limits on carbon emissions from new power plants and is developing rules to require cuts in such emissions from existing plants.
Carbon dioxide is a greenhouse gas that most scientists agree contributes to climate changes such as an increase in heat waves, droughts and severe storms.
Removing carbon from power-plant emissions has been a dream of utilities, the coal industry and regulators.
The technology exists to siphon off carbon before it goes out the smokestack, but there is no commercially viable system to do it on the large scale that would be required at a power plant. The techniques already developed would be too expensive.
A key reason is that carbon-capture systems use 25 percent or more of the power the plants produce, which drives up the costs.
One goal of the project at the KU plant in Mercer County is to test ways to cut that so-called "parasitic load" by at least 20 percent, making carbon removal less expensive, Andrews said.
"It comes down to, can we make it affordable?" said Len Peters, secretary of the state Energy and Environment Cabinet.
The project will give researchers and regulators a much better idea of the costs of capturing carbon from emissions, Peters said.
"We have to solve this problem if we want to be able to build coal plants in the future," he said.
The project is the first of its kind in Kentucky. Construction has begun on a system that will take out some emissions headed for a towering smoke stack, then use a solvent to strip out carbon and heat to boil off the mixture and concentrate the carbon into a liquid.
The goal is to begin operations in the fall. The hope is to have some study results in 2016, said John Voyles, a KU vice president.
The project will not include storing the carbon, which is another cost in systems to take carbon out of power-plant emissions. Carbon removed in the research ultimately will go back up the stack and into the atmosphere.
The project is estimated to cost $19.5 million. It is being funded with $14.5 million from the U.S. Department of Energy, more than $3 million from the state, and contributions from KU and other utilities.
UK's Center for Applied Energy Research is leading the research, with Kunlei Liu as the principal investigator, but there are a number of partners.
Peters said the technology being tested at the Brown plant as more efficient than the system American Electric Power tested at a plant in West Virginia.
The company halted the research in 2011, largely out of concern that regulators would not let it pass on the costs to customers.
Spending money to continue burning coal has been an increasingly controversial issue in recent years.
Nachy Kanfer, deputy director of the Sierra Club's Beyond Coal Campaign for the region that includes Kentucky, said the club did not oppose research like the project at KU's Brown plant, though the club would argue as a general principle that it's better to spend taxpayer money to develop renewable energy than on coal.
However, if KU or other utilities seek higher rates to pay for retrofitting existing coal plants with carbon-capture systems, that's when the Sierra Club and others would question whether it would be less expensive to reduce carbon that way or through other methods, such as retiring the plant, Kanfer said.
Others argue that if their emissions could be cleaned up, it makes sense to keep existing coal plants running.
"Existing power plants are very valuable assets," Andrews said.
It isn't clear how complying with tougher air-quality rules will affect electricity prices in Kentucky.
The EPA estimated that the average electric bill would increase by up to 3.2 percent in 2020 under one option in its proposal to cut carbon emissions from existing plants, then go down by more than 8 percent by 2030 because of increased energy efficiency and other factors.
However, that estimate was not specific to Kentucky, which now has lower electricity rates than most states.
That has been a plus for manufacturing. State officials have raised concerns that meeting emissions rules could push up electricity prices and cost the state jobs.
Many of Kentucky's coal-fired power plants are older, making the state first in the nation in the amount of carbon dioxide emitted per unit of electricity produced from all sources, according to one study.
Cutting carbon emissions in a cost-effective way is a critical issue for the state, Gov. Steve Beshear said at Monday's announcement.
"The health of Kentucky's entire manufacturing economy is highly dependent on our ability to continue to generate affordable, readily available energy," Beshear said.