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22 March 2005 - The Electric Power Research Institute (EPRI) has released a preliminary analysis of possible federal incentives for accelerating the deployment of integrated gasification combined cycle power plants in the US.
According to the analysis, no single incentive can bridge the cost gap between IGCC plants and conventional coal based power plants, but tailored packages of incentives may help overcome the barriers to deployment.
Coal based power plants have long been the workhorse of the US power system, generating more than half the country's electricity. The EPRI suggest that a variety of advanced coal technologies will be needed to reduce emissions from the diverse coal types that are used.
Two first-generation IGCC plants are currently operating in the US as demonstration projects. EPRI's analysis indicates that electricity from the next few IGCC plants will cost 15-20 per cent more than electricity from conventional coal fuelled plants.
To bridge the existing cost gap for the next few IGCC plants, a variety of federal incentives have been discussed, including: loan guarantees, direct Federal loans, Federal cost sharing grants, investment tax credits, production tax credits, tax-exempt financing, accelerated depreciation, and Federal availability insurance.
Researchers at EPRI have concluded that a range of incentive packages that can be tailored to an individual investors needs will be required to close the cost gap and encourage the development of IGCC technologies.
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