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CEIC-07-10

"Storing Syngas Lowers the Carbon Price for Profitable Coal Gasification"
Adam Newcomer and Jay Apt

Abstract:
Integrated gasification combined cycle (IGCC) electric power generation systems with
carbon capture and sequestration have desirable environmental qualities, but are not
profitable when the carbon dioxide price is less than approximately $50 per metric ton.
We examine whether an IGCC facility that operates its gasifier continuously but stores
the syngas and produces electricity only when daily prices are high may be profitable at
significantly lower CO2 prices. Using a probabilistic analysis, we have calculated the
plant-level return on investment (ROI) and the value of syngas storage for IGCC
facilities located in the US Midwest using a range of storage configurations. Adding a
second turbine to use the stored syngas to generate electricity at peak hours and
implementing 12 hours of above ground high pressure syngas storage significantly
increases the ROI and net present value. Storage lowers the carbon price at which
IGCC enters the US generation mix by approximately 25%.

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