Plans for at least 8 clean coal plants hit snags

Clean coal-fired power plants have been touted as a remedy for an environmentally challenged age, offering the promise of turning cheap but dirty coal into a pollution-free energy source.

Don't turn off those wind turbines yet.

At least eight clean coal plants, more than a third of those on the drawing board, have been canceled, delayed or rejected by regulators this year. Developers cite soaring construction costs, technology hurdles and uncertainty about regulation of greenhouse gases.

Clean coal plants are formally known as integrated gasification combined cycle (IGCC) generators. There are only two small IGCC facilities in the USA now.

Their numbers were expected to soar because they can be retrofitted more easily than traditional coal plants to remove carbon dioxide, the main global-warming gas. That's because the IGCC process turns coal into gases, filtering out pollutants such as carbon dioxide before the gases are burned. Standard pulverized coal plants spew a third of U.S. CO2 emissions.

IGCC plants are about 20% more expensive to build than standard coal plants, says Ed Rubin, an environmental engineering professor at Carnegie Mellon University. But they can be 20% cheaper in the long run, assuming both types of plants eventually add equipment to capture carbon and store it underground, he says.

After the 2008 election, Congress is likely to cap the amount of carbon that utilities emit. An IGCC plant could let a utility tap abundant U.S. coal reserves while avoiding hefty carbon taxes.

But roadblocks are emerging. Last month, Southern scrapped plans for a 285-meagawatt clean coal plant near Orlando after breaking ground in September. The move followed Tampa Electric's decision to kill a larger gasification project in October.

Both companies point to Florida Gov. Charlie Crist's order this year forcing utilities to cut carbon emissions to 1990 levels by 2025.

"The ability to capture and store the carbon is not (yet) there," says Southern spokesman Jason Cuevas.

Another obstacle is skyrocketing building costs that are pummeling already pricey clean coal plants.

SouthWestern Power Group dropped plans for an IGCC plant in Bowie, Ariz., in August after costs rose from $1.25 billion to $2 billion in two years, says general manager David Getts. Also, without U.S. carbon caps, SouthWestern couldn't tell the local government how much CO2 it planned to capture.

Minnesota utility regulators last summer derailed Excelsior Energy's clean-coal plans, saying the "untested" technology would boost electric rates by $6 a month.

Rubin says IGCC could stall until several pilot projects are done.

Still, others are forging ahead. Duke Energy last month won partial state approval for an IGCC plant in Edwardsport, Ind.

American Electric Power aepis seeking clearance for two IGCC plants in Ohio and West Virginia.

"I think it's essential that we as a nation take advantage of one of the indigenous fuel sources we have," AEP chief Michael Morris says.

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