National Academies Press: OpenBook

Coal: Energy for the Future (1995)

Chapter: 4 THE STRATEGIC PLANNING FRAMEWORK

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Suggested Citation:"4 THE STRATEGIC PLANNING FRAMEWORK." National Research Council. 1995. Coal: Energy for the Future. Washington, DC: The National Academies Press. doi: 10.17226/4918.
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4
The Strategic Planning Framework

This chapter outlines the methods and strategic planning framework used to assess DOE's coal program, in keeping with the committee's charge. To establish an analytic framework, the committee defined optimal planning horizons; national coal technology requirements corresponding to those horizons, under the most probable and alternative scenarios; and, finally, criteria that might be used to set DOE coal program priorities in view of these considerations, DOE's mission, and the requirements of EPACT.

As seen in Chapter 2, DOE's coal program planning has generally focused on planning horizons only to 2010, with the objective of developing technologies that will be deployed and yield benefits in subsequent years (Randolph, 1992). However, as the discussions in Chapter 3 indicated, coal will undoubtedly be a major source of energy well past the year 2010, with production of coal-derived liquid and gaseous fuels becoming a major potential consumer of coal after 2020. The committee thus concluded that a longer planning horizon is needed to develop a national RDD&C program relevant to this broadening spectrum of expected coal uses.

Three planning periods were identified to assess the DOE coal program: near-term, 1995-2005; mid-term, 2006-2020; and long-term, 2021-2040. The committee developed scenarios for each of these three planning periods, reflecting likely U.S. energy demands, resource and environmental constraints, and likely coal use outside the United States.

BASELINE STRATEGIC PLANNING SCENARIOS

The committee's baseline strategic planning scenarios, reviewed in Table 4-1, describe demanding, but not unreasonable, circumstances against which the

Suggested Citation:"4 THE STRATEGIC PLANNING FRAMEWORK." National Research Council. 1995. Coal: Energy for the Future. Washington, DC: The National Academies Press. doi: 10.17226/4918.
×

requirements for coal RDD&C can be assessed. It will be seen that these scenarios are based on the major findings of Chapter 3 and encompass a range of requirements envisioned by the committee as likely to arise. While circumstances less demanding can be envisioned, it is the belief of the committee that a major role of DOE is to provide technological insurance for a credibly demanding future. For example, in the view of the committee, requirements to reduce CO2 emissions are sufficiently probable to provide a strong driving force for the very ambitious DOE efficiency goals for power generation (see Chapter 2). Further, the coal program should be sufficiently robust and flexible to accommodate evolving needs. After the baseline scenarios are presented, alternative scenarios that are more and less demanding are also reviewed.

ALTERNATIVE SCENARIOS

Given the inherent uncertainty of predictions, the committee developed and considered several variations on the baseline scenarios. Less demanding scenarios would postpone the need for advanced coal utilization technology, while more demanding scenarios would accelerate the need.

Near-Term

Less demanding scenarios would result if natural gas and oil prices remained low or if concerns about the environment diminished. If no natural gas shortages were anticipated, for example, there would be less need for new or improved technologies for coal-based power generation. If oil supplies remained plentiful and prices low, there would be little incentive to develop technologies to produce liquid fuels from coal. Less severe environmental constraints would also reduce the need to develop clean coal technologies for both domestic and international markets. In particular, if no new regulations were enacted to control air toxics or other air pollutants, and if concerns about CO2 emissions diminished, there would be fewer pressures to develop advanced environmental control technologies or maximally efficient coal-based plants.

On the other hand, the demand for new coal-based plants would be accelerated if there were unexpected shortages of electricity or natural gas. This scenario would create more demanding RDD&C requirements for advanced coal utilization technologies. Disruptions in the supply of imported oil could increase oil prices significantly, resulting in new emphasis on domestic energy security and coal liquefaction technology. A more demanding short-term scenario could also result from increased domestic or international concern about the environmental impacts of coal-based facilities. Concern about the effects of global warming could lead to penalties for CO2 emissions, encouraging faster development and use of very high-efficiency coal-based systems and greater R&D on CO2 removal and disposal options.

Suggested Citation:"4 THE STRATEGIC PLANNING FRAMEWORK." National Research Council. 1995. Coal: Energy for the Future. Washington, DC: The National Academies Press. doi: 10.17226/4918.
×

TABLE 4-1 Baseline Scenarios to Assess Coal RDD&C Needs

Area

Near-Term, 1995-2005

Mid-Term, 2006-2020

Long-Term, 2021-2040

Environmental constraints

 

  • Existing Clean Air Act requirements met by modifying existing coal plants using current or near-term control technologies.
  • By the end of the period, more stringent regulations on fine particulates, NOx, and air toxics may be in place. Concerns may be growing about CO2 emissions.
  • State and local requirements for facility siting and operation continue to push use of state-of-the-art environmental controls.

 

  • Air pollution control and solid waste disposal requirements become more severe.
  • New CO2 emissions penalties provide new incentives to install high-efficiency, coal-based generating systems and to continue R&D on CO2 removal and disposal options.

 

  • Maximum-efficiency coal-based systems are required to minimize CO2 emissions; attention is given to establishing CO2 removal and disposal options.
  • Pressure continues to reduce all emissions to absolute minimum and to reuse or recover solid wastes as by-products; advanced emissions control systems are required for coal-based plants.

Foreign Markets (power generation systems)

 

  • New capacity needs are met by existing technology, but interest grows in more advanced and lower-cost systems for environmental controls.

 

  • Markets develop for advanced coal-based power generation systems to provide new capacity.

 

  • Markets grow for proven high-performance systems, but cost competition is severe.

Synthetic fuels from coal

 

  • Oil and natural gas prices rise but not enough to justify investment in processes to manufacture liquid fuels or synthetic natural gas from coal.

 

  • International oil prices rise toward the level where products from dedicated coal liquefaction can compete with petroleum products.
  • Production of lower-cost, coal-based liquids in conjunction with gasification combined-cycle systems for power generation becomes economic.

 

  • High international oil prices lead to major production of liquids from coal.
  • High natural gas demand and prices lead to pioneer plants for synthetic natural gas production in the latter part of this period.
Suggested Citation:"4 THE STRATEGIC PLANNING FRAMEWORK." National Research Council. 1995. Coal: Energy for the Future. Washington, DC: The National Academies Press. doi: 10.17226/4918.
×

Electric power generation (domestic)

 

  • Demand for new baseload electric power generation stations will be low.
  • Sufficient natural gas will be available to meet limited needs for new capacity.
  • Natural gas prices may rise but not enough to justify investment in new coal plants.
  • Growing concerns about future natural gas supply and price, and about future environmental restrictions, stimulate planning for cleaner, more efficient, coal-based technologies.
  • Growing trend toward smaller, more decentralized power generation systems in response to utility deregulation and increased competition; emphasis on reliable, low-risk technologies.

 

  • Substantial need exists for new generating capacity.
  • Concerns about future natural gas supply and price result in new demand for coal-based capacity.
  • Economic incentives for efficiency improvements increase.
  • Continued trend toward decentralization and risk aversion for new power generation technologies.

 

  • Due to higher prices for natural gas, advanced coal-based technologies used increasingly.
  • Power generation using natural gas and 1970s and 1980s nuclear technologies decreases.
  • Renewables a significant but not predominant source of electric power.
  • Construction of advanced nuclear power plants begins during this period, providing new competition for coal-based systems.
Suggested Citation:"4 THE STRATEGIC PLANNING FRAMEWORK." National Research Council. 1995. Coal: Energy for the Future. Washington, DC: The National Academies Press. doi: 10.17226/4918.
×
Mid and Long-Term

Over the mid and long-term, less demanding scenarios would result from the continued availability of domestic natural gas or gas imports (including liquefied natural gas) or a decrease in electricity demand growth. In these cases there would be less demand for new coal-based generating capacity. Imported oil and bitumen prices below $30/bbl would reduce incentives to manufacture liquid fuels from coal. However, interim technology advances (e.g., in coproduct systems) might allow coal-derived fuels to be produced competitively at an equivalent crude oil price of $25/bbl or less. If, contrary to expectations, environmental constraints on coal use for power generation do not become more severe over the mid to long-term, there will be less need for associated clean coal technologies, such as advanced environmental controls and high-efficiency systems.

More demanding mid- to long-term scenarios, on the other hand, could result from unexpectedly high growth in electricity demand, such that new coal-based capacity would be needed earlier than expected. High natural gas prices could also accelerate the need for such new capacity and perhaps also encourage a new synthetic natural gas industry. Disruptions in international oil and tar markets and related price increases could boost the demand for coal liquefaction. Increased coal RDD&C might also be needed if there is earlier or more widespread enactment of new environmental restrictions on power plant solid wastes, air emissions, or liquid discharges. Finally, heightened concern over global warming could push the drive for high-efficiency technology, CO2 sequestration methods, and the use of nuclear energy to reduce greenhouse gas emissions.

SCENARIO IMPLICATIONS FOR RDD&C PLANNING

The committee's baseline planning scenarios suggest that DOE's coal program should anticipate national needs in several areas:

  • Growing U.S. markets for advanced coal-based generating technologies, probably beginning about a decade from now and with sustained longer-term demand for these technologies.
  • More effective and less costly environmental control systems to meet the increasingly stringent demands of federal, state, and local regulatory agencies for both new and existing power plants.
  • High-efficiency power generation systems to address growing concerns about greenhouse gas emissions, resource depletion, and other environmental impacts.
  • Reliable, smaller-scale technologies, compatible with the emerging trends to more decentralized power generation and more competitive business accompanying utility deregulation.
  • Future domestic markets for coal-derived fuels likely emerging in the mid to long-term.
Suggested Citation:"4 THE STRATEGIC PLANNING FRAMEWORK." National Research Council. 1995. Coal: Energy for the Future. Washington, DC: The National Academies Press. doi: 10.17226/4918.
×
  • Growing international markets for low-cost environmental control technologies and coal-based electric power systems, for both retrofit and new plant applications.

The alternative scenarios suggest that the timing of projected changes may vary but that the principal requirements will remain much the same. Regardless of timing, then, there is likely to be a demand for low-cost, clean, efficient, coal-based power generation technologies and for high-efficiency gasification for power generation and production of clean gaseous and liquid fuels. However, shifts in the timing of requirements, such as those described under the alternative scenarios above, would necessitate changes in DOE's coal program priorities.

ADDITIONAL CRITERIA TO SET NATIONAL COAL RDD&C PRIORITIES

While the scenarios above provide valuable information to establish overall goals for the DOE coal program, further criteria are needed to set more specific program objectives and priorities. The committee's strategic planning framework therefore employed further criteria, consistent with the goals of EPACT and the National Energy Strategy (DOE, 1991). In the most general terms, these goals are to promote national economic well-being through lower energy costs, creation of U.S. jobs, and improved balance of payments based on technology manufacture and export; to protect and enhance environmental quality by minimizing emissions from coal-based facilities, as well as the impacts of these facilities' solid, liquid, and gaseous wastes; and to enhance national security by reducing dependence on foreign energy sources. Following from these general goals (which were also reflected in the scenarios above) and consistent with its charge, the committee developed the following additional criteria to evaluate the strategic importance of individual DOE programs for the three planning periods defined, namely; the near-term (1995-2005); mid-term (2006-2020); and long-term (2021-2040) periods.

General criteria
  • Are the timing and goals of the program consistent with the scenarios and objectives developed by the committee and with other EPACT and DOE goals and objectives?
  • What is the potential for technological success?
Economic criteria
  • What potential does the technology have to reduce the costs of electric power, gaseous or liquid fuels, or other by-products for both new facilities and existing plants?
Suggested Citation:"4 THE STRATEGIC PLANNING FRAMEWORK." National Research Council. 1995. Coal: Energy for the Future. Washington, DC: The National Academies Press. doi: 10.17226/4918.
×
  • Does a market exist for the technology and how large is it? What export potential does the technology have?
  • What potential does the technology have to increase the international competitiveness of U.S. firms?
  • What potential is there to accelerate application of the technology?
Environmental criteria
  • What potential does the technology have to economically control, reduce, or eliminate environmentally important wastes, notably criteria air pollutants (NOx, SO2, fine particulates), air toxics (inorganic and organic), greenhouse gas emissions (CO2, methane), solid wastes (hazardous and nonhazardous), and liquid wastes (organic and inorganic) from coal-based facilities for power generation and fuels production?
  • What is the technology's applicability to new and existing plants in both the United States and other countries?
The DOE role
  • Is there a role for DOE given the existence of other domestic industrial programs, other U.S. government programs, foreign programs, and the projected market for the technology?
  • What is the recommended role for DOE?

The need for DOE participation requires special consideration because both domestic and foreign groups may be actively carrying out related programs. However, the national goal of improving the U.S. economy by creating more U.S. jobs and improving the balance of payments calls for a competitive and wellrounded U.S. program. With proper planning and setting of priorities, DOE programs can have several important roles:

  • Accelerating the commercial application of improved technologies through cost sharing and other arrangements;
  • Promoting the development and demonstration of new systems;
  • Developing a technical basis for improved systems and components, including performing and supporting advanced research aimed at reducing cost and enhancing efficiency; and
  • Identifying major opportunities to improve cost and performance through systematic modeling of systems and components.

The relative importance and practical application of the above considerations necessarily depend on the individual program and the subject addressed, as will be seen in subsequent chapters. To prepare for work across all timeframes, DOE activities now need to focus not only on near-term demonstration and commer-

Suggested Citation:"4 THE STRATEGIC PLANNING FRAMEWORK." National Research Council. 1995. Coal: Energy for the Future. Washington, DC: The National Academies Press. doi: 10.17226/4918.
×

cialization but also on longer-term R&D for the mid-term and beyond and on basic R&D for the long-term. To best assess DOE's coal program in terms of the above criteria, the committee focused its discussions of coal-based technologies in Part II on several areas: the state of the art of the technology; the technical issues, risks, and opportunities; and the current status of DOE and other programs. Thus, the areas addressed cover not only the technology's current status but also its potential for performance and cost improvements, the likelihood of its successful further development, and the existence of domestic and overseas markets. For each technology or group of technologies examined in Part II, a set of findings summarizes the critical issues to be addressed in any continuing or future DOE program.

REFERENCES

DOE. 1991. National Energy Strategy, First Edition 1991/1992. U.S. Department of Energy. Washington, D.C.: DOE.


Randolph, J.G. 1992. The U.S. Government's Strategic Plan for Advanced Coal Technology. Paper presented to the International Committee for Coal Research, September 17.

Suggested Citation:"4 THE STRATEGIC PLANNING FRAMEWORK." National Research Council. 1995. Coal: Energy for the Future. Washington, DC: The National Academies Press. doi: 10.17226/4918.
×
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Suggested Citation:"4 THE STRATEGIC PLANNING FRAMEWORK." National Research Council. 1995. Coal: Energy for the Future. Washington, DC: The National Academies Press. doi: 10.17226/4918.
×

PART II
Overview of Current DOE Coal Programs

Suggested Citation:"4 THE STRATEGIC PLANNING FRAMEWORK." National Research Council. 1995. Coal: Energy for the Future. Washington, DC: The National Academies Press. doi: 10.17226/4918.
×
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Suggested Citation:"4 THE STRATEGIC PLANNING FRAMEWORK." National Research Council. 1995. Coal: Energy for the Future. Washington, DC: The National Academies Press. doi: 10.17226/4918.
×
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Suggested Citation:"4 THE STRATEGIC PLANNING FRAMEWORK." National Research Council. 1995. Coal: Energy for the Future. Washington, DC: The National Academies Press. doi: 10.17226/4918.
×
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Suggested Citation:"4 THE STRATEGIC PLANNING FRAMEWORK." National Research Council. 1995. Coal: Energy for the Future. Washington, DC: The National Academies Press. doi: 10.17226/4918.
×
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Suggested Citation:"4 THE STRATEGIC PLANNING FRAMEWORK." National Research Council. 1995. Coal: Energy for the Future. Washington, DC: The National Academies Press. doi: 10.17226/4918.
×
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Suggested Citation:"4 THE STRATEGIC PLANNING FRAMEWORK." National Research Council. 1995. Coal: Energy for the Future. Washington, DC: The National Academies Press. doi: 10.17226/4918.
×
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Suggested Citation:"4 THE STRATEGIC PLANNING FRAMEWORK." National Research Council. 1995. Coal: Energy for the Future. Washington, DC: The National Academies Press. doi: 10.17226/4918.
×
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Suggested Citation:"4 THE STRATEGIC PLANNING FRAMEWORK." National Research Council. 1995. Coal: Energy for the Future. Washington, DC: The National Academies Press. doi: 10.17226/4918.
×
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Suggested Citation:"4 THE STRATEGIC PLANNING FRAMEWORK." National Research Council. 1995. Coal: Energy for the Future. Washington, DC: The National Academies Press. doi: 10.17226/4918.
×
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Suggested Citation:"4 THE STRATEGIC PLANNING FRAMEWORK." National Research Council. 1995. Coal: Energy for the Future. Washington, DC: The National Academies Press. doi: 10.17226/4918.
×
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Suggested Citation:"4 THE STRATEGIC PLANNING FRAMEWORK." National Research Council. 1995. Coal: Energy for the Future. Washington, DC: The National Academies Press. doi: 10.17226/4918.
×
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Suggested Citation:"4 THE STRATEGIC PLANNING FRAMEWORK." National Research Council. 1995. Coal: Energy for the Future. Washington, DC: The National Academies Press. doi: 10.17226/4918.
×
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The U.S. Department of Energy (DOE) was given a mandate in the 1992 Energy Policy Act (EPACT) to pursue strategies in coal technology that promote a more competitive economy, a cleaner environment, and increased energy security.

Coal evaluates DOE's performance and recommends priorities in updating its coal program and responding to EPACT.

This volume provides a picture of likely future coal use and associated technology requirements through the year 2040. Based on near-, mid-, and long-term scenarios, the committee presents a framework for DOE to use in identifying R&D strategies and in making detailed assessments of specific programs.

Coal offers an overview of coal-related programs and recent budget trends and explores principal issues in future U.S. and foreign coal use.

The volume evaluates DOE Fossil Energy R&D programs in such key areas as electric power generation and conversion of coal to clean fuels.

Coal will be important to energy policymakers, executives in the power industry and related trade associations, environmental organizations, and researchers.

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