Tuesday, October 15, 2013

Coal-based IGCC in the USA - 
A Last Word?

Kemper IGCC demonstrates high cost of "clean coal"

Kemper "is scaring people away"
(from the Wall Street Journal, October 13, 2013)

DE KALB, Miss.—For decades, the federal government has touted a bright future for nonpolluting power plants fueled by coal. But in this rural corner of eastern Mississippi, the reality of so-called clean coal isn't pretty.

Mississippi Power Co.'s Kemper County plant here, meant to showcase technology for generating clean electricity from low-quality coal, ranks as one of the most-expensive U.S. fossil-fuel projects ever—at $4.7 billion and rising. 

Mississippi Power's 186,000 customers, who live in one of the poorest regions of the country, are reeling at double-digit rate increases. And even Mississippi Power's parent, Atlanta-based Southern Co., has said Kemper shouldn't be used as a nationwide model.

Meanwhile, the plant hasn't generated a single kilowatt for customers, and it's anyone's guess how well the complex operation will work. The company this month said it would forfeit $133 million in federal tax credits because it won't finish the project by its May deadline.

Labor and material costs for the Kemper plant exceeded expectations.

One of just three clean-coal plants moving ahead in the U.S., Kemper has been such a calamity for Southern that the power industry and Wall Street analysts say other utilities aren't likely to take on similar projects, even though the federal government plans to offer financial incentives.

Southern recently took $990 million in charges for cost overruns approaching $2 billion. The company's stock has been battered in the past year, and the company's market value has dropped $6.4 billion since April, to $35.8 billion. Mississippi Power's credit rating has dropped to three notches above junk.

Kemper "is scaring people away," says Michael Haggarty, an analyst for Moody's Investors Service in New York.

And clean coal's costs have looked even worse recently in comparison with a new inexpensive alternative: plants fueled by the natural gas unleashed by a U.S. drilling boom. 

Southern last year decided against purchasing a 10-year-old gas-fired plant in Jackson, Miss., that would have generated about as much electricity as Kemper. Another company bought it for $206 million, billions less than Kemper will cost.

By  Rebecca Smith and Cameron McWhirter 

Ed. Note:   Kemper is currently being commissioned on natural gas fuel and will produce saleable energy for Miss. Power customers well before the gasification system is operational.  The KRB "TRIG" gasifier technology being used at Kemper, developed with partial US DOE support, has yet to be demonstrated at commercial scale.

Friday, December 21, 2012

Gasification & IGCC News

Greengen - China's First IGCC 
Demo Project 'Inaugurated'
(Adapted from report released by Industrial Info Resources, China, Dec. 21, 2012)

The inauguration of the "Greengen" IGCC Demonstration Project, the first IGCC project in China, as well as the unveiling of the associated national Greengen R&D center, was held in Tianjin on December 12, 2012, according to an announcement from China Huaneng Group.

Greengen Corporation Limited, a joint venture of China Huaneng Group (Beijing) (51%), and seven other leading energy players in China each with 7% of equity in the company, are responsible for the development of the project. 

The other seven include China Datang Corporation, China Huadian Corporation, China Guodian Corporation, China Power Investment Corporation, China Shenhua Group, China National Coal Group Corporation and the State Development and Investment Corporation.

Northwest Electric Power Design Institute (Xi'an, Shaanxi), a subsidiary of Power Construction Corporation of China (PCCC), is responsible for the design and engineering of the project. Tinjian Electric Power Construction Company (Tianjin), another subsidiary of PCCC, is responsible for the construction of the project.

Greengen Corporation was established in 2005, with the objective to develop a close-to-zero-emission coal-fired power generation technology within 10 years. The project received final approval from the National Development and Reform Commission, the top planner of China, in June 2009.

Construction of the Phase I project kicked off on July 6, 2009. On October 2, 2011, the gas turbine in the project's power island ( a Siemens nominal 180MW SGT5-2000E(LC) aka V94.2K) was started under oil-fired operating conditions. 

On December 7, 2012, the Phase I project was handed over for commercial operation in full IGCC mode using a proprietary coal gasification process developed by Huaneng Clean Energy Research Institute "HCERI" formerly Thermal Power Research Institute "TPRI" .

According to plans, China Huaneng will continue its R&D in Greengen and will complete a 400MW IGCC demonstration project in 2015.

Monday, August 13, 2012





"Circumstances have changed"


Falling victim to low gas prices and politics

Clean Chicago Energy handed serious setback 

Friday, August 10, 2012

Leucadia National's Chicago Clean Energy coal gasification project has suffered the same fate as a long list of once promising coal-to-gas projects in the US.

Illinois Governor Pat Quinn has vetoed the bill that would have saved the project by equiring two utility companies to buy SNG from the $3 billion plant proposed for South Chicago. 

"That is not a fair deal for ratepayers," said Governor Quinn, reflecting the opinion of other government leaders in the US who have pulled the plug on similar projects.

"This leaves the controversial project mired in uncertainty," reported an industry news service.

While the governor said he did not oppose the concept of the plant, he commented that "circumstances have changed" since he signed another bill last year that supported a coal gasification plant in the city.

The vetoed bill would have required power company Ameren Illinois and Nicor Gas to pay for 95% of the costs of the plant while receiving only 84% of its output.  Both companies lobbied hard against the plan.

In the meantime, US natural gas prices are at lowest levels seen in many years, and are expected to stay that way for the foreseeable future.  This has thrown most of the proposed US coal-to-gas and IGCC projects in the US onto the back burner.

"The fact of the matter is natural gas prices are low and demand is flat or declining," said Howard Lerner, executive director of the Environmental Law and Policy Center.  "The market (for costly SNG) is very tight for anybody proposing to build a new plant."

New York-based Leucadia National, parent company of Chicago Clean Energy, said that the governor's decision was "unfortunate".

"We know that this $3 billion investment in Illinois was good for the state's economy, its environment, its workers and its consumers," the company said. "While we find the governor's decision unfortunate, we look forward to continuing our work at our other facilities throughout the country." 

Leucadia, with considerable support of the US Dept. of Energy,  currently continues development of  similar projects in Indiana, Louisiana and Mississippi.  However, we see the future of these projects as shaky, at best.

Construction of the South Chicago plant was to have started in September 2014 and ready by March 2018.

Monday, April 02, 2012

Gasification & News

Lights still on at Kemper 
IGCC construction site 

Recent news seemed to foretell of 'lights-out' for Southern Company clean-coal project, but latest news 
is that the PSC has given its blessing 
to 'truck on'.


GULFPORT, Miss. - On March 30, 2012 it was reported that Southern Company's smallest operating utility, Mississippi Power,  received authorization to temporarily continue construction of the Kemper County IGCC Project from the Mississippi Public Service Commission.

Recently, (see earlier posting of Gasification & IGCC News) the Mississippi Supreme Court ruled that the Commission must address the issue of insufficient supporting evidence in its granting of an authorization to proceed with construction.   Although it put the project's future in doubt, the Court's ruling apparently did not directly order shut down of the project.

"This action allows us to continue construction of the Kemper Project," said Jeff Shepard, company spokesman, Mississippi Power. "Any delays to this project would mean significant costs to our customers. Today's ruling means we can continue building a sound energy future for our customers."

Mississippi Power continues to provide the Public Service Commission with information as needed as they address the Supreme Court ruling. 

 In 2010 the PSC had originally ruled against the project, saying that the company failed to prove that it would be beneficial to its customers.  However, later that year it reversed its position (in a 2-1 vote) based on a Mississippi Power proposal of a cost cap of almost $2.9 billion for the 582MW (net) plant.  

The plant is designed to use a gasification technology developed by Southern Co and KBR (Kellogg Brown & Root) to burn Mississippi lignite. The so-called TRIG (Transport Integrated Gasification) design is based on long-proven processing technology used in refineries, but has, to date, operated as a coal gasifier only at small scale at the DOE advanced systems test facility in Wilsonville, Alabama. 

However, according to a September, 2009 release,  and subsequent updates, it was expected that the first commercial-scale TRIG gasifier would be operating in Guandong Province, China before the end of 2011.

Current information on the actual status of the Guandong project is still being researched.

Friday, March 16, 2012

Gasification & IGCC News:

Harsh Reality in Mississippi
Setback for Clean Coal and
IGCC Power Generation

Mississippi Supreme Court 
reverses PSC approval of 
Kemper County IGCC plant

The writing was on the wall
Even with the plant already under construction, issues regarding the cost and need for the plant persisted.   On March 16 the harsh reality came home to roost.  The high cost of a coal-based Integrated Gasification Combined Cycle (IGCC) power plant, especially in the face of cheap natural gas and low demand, has abruptly caused a major setback for the Kemper County IGCC project in Mississippi.

In a 9-0 vote the state supreme court  reversed an approval by the Public Service Commission for the $2.8 billion 582MW power generation project.

In its decision, the court said that the May 2010 approval failed to demonstrate that the plant would benefit the utility's customers, as required by law, and sent the case back to the PSC.

Plant already under construction
Mississippi Power is already building the 582-megawatt the plant, which had been awarded more than $680 million in federal grants and tax incentives, including $270 million from the U.S. Department of Energy's clean coal power initiative.

The status of these federal funds are unknown, and the DOE is yet to issue a statement.

Mississippi Power officials said that they were reviewing the court ruling but declined further comment, according to wire services.

Sierra Club Behind Challenge
The Sierra Club, which challenged the PSC approval to build the plant commented that ruling "has dealt a severe blow to the project in the sense that they (Mississippi Power) are back to square one."

"It's going to be very difficult for an unbiased observer to say that this plant is a good idea given the current state of the energy market, the natural gas market and the economy," said a Sierra Club lawyer.

A distinct possibility exists that the plant will ultimately go forward as a natural-gas fired combined cycle, using the Siemens gas turbines already purchased. There could be plans designed into the plant for future conversion to IGCC using Mississippi lignite feedstock when economic conditions can justify it.    It is noted that this is only speculation, and that neither the PSC nor Southern Company has as yet made any statement in this regard.

PSC does 'flip-flop'
Mississippi Power is the smallest utility in the Southern Company system, and has a customer base of less than 200,000.    In 2010, the three-member PSC initially ruled that the company failed to prove that the costly plant would benefit its customers.

About a month later, however, the commission voted 2-1 to allow the plant to be built under revised conditions, including raising the cost cap by nearly $500 million to $2.88 billion (almost $5000 per net kW).

The lone Mississippi PSC commissioner who voted against the project both times, called Thursday's Supreme Court ruling "a major victory" for Mississippi Power customers.

"Untried technology"?
The dissenting commissioner, Brandon Presley, claimed that the plant is based on using "untried technology," and that "the customers (of Mississippi Power) have all the risks along with a 45 percent rate hike to boot."

The plant is designed to use a gasification technology developed by Southern Co and KBR (Kellogg Brown & Root) to burn Mississippi lignite. The so-called TRIG (Transport Integrated Gasification) design is based on long-proven catalytic cracking tower design used in refineries, but has, to date, operated as a coal gasifier only at small scale at the DOE advanced systems test facility in Wilsonville, Alabama.

However, according to a September, 2009 release,  and subsequent updates, it was expected that the first commercial-scale TRIG gasifier would be operating in Guandong Province, China before the end of 2011.

Current information on the actual status of the Guandong project is still being researched.

Thursday, February 02, 2012


China to build compact
coal gasification demo
unit for P&W Rocketdyne

After decades of US development 
Chinese agree to take on commercial 
demonstration of rocket-based coal
gasification technology.

From Pratt&Whitney Rocketdyne Press Release

CANOGA PARK, Calif., Feb. 2, 2012 – Pratt & Whitney Rocketdyne (PWR) has signed a negotiation framework agreement with two Chinese energy industry companies to design, construct and operate a commercial-scale advanced gasification demonstration plant in China’s central eastern Henan Province. 

PWR, developer of the so-called "advanced compact gasification technology", says that the agreement is a "key step toward commercializing technology designed to lower the cost of coal gasification and provide an alternative fuel source that reduces water use and carbon dioxide emissions."

Under the framework agreement, Zhongyuan Da Hua Group Company Ltd. and East China Engineering Science & Technology Company will share development costs for construction and operation of a demonstration plant with PWR.

Zhongyuan Da Hua Group Company Ltd is a wholly-owned subsidiary of Henan Coal Chemical Industry Group Co. Ltd., a state-owned enterprise in China Henan Province. Henan Coal, the 2nd largest coal company in China specializes in coal-to-gas projects. 

East China Engineering Science & Technology Company, has more than 40 years of experience in coal/chemical production facility engineering, procurement and construction, and has completed more than 2,000 projects throughout China and 10 other countries.
According to PWR, its advanced rocket-based gasification technology provides a higher-efficiency and lower-cost alternative to current gasification systems.  Estimates are that the capital cost using PWR technology would be 10 to 20 percent less than conventional gasification plants .  In addition, it is expected that carbon dioxide emissions would be reduced by up to 10 percent and water usage by up to 30 percent. 

The PWR technology has been under development for decades.  Early phases of R&D enjoyed the support of the US government.  More recently, PWA  has collaborated with ExxonMobil Research and Engineering Company, with Canada’s Alberta Innovates – Energy & Environmental Solutions (EES) and the Illinois Department of Commerce and Economic Opportunities (DCEO).   PWR has also granted a worldwide license to Zero Emission Energy Plants, Inc. (ZEEP) to use the technology in the development of commercial facilities.

PWR, a part of Pratt & Whitney, a United Technologies Corp. company and
a world leader in the design, manufacture and service of aircraft engines, space propulsion systems and industrial gas turbines. United Technologies, based in Hartford, Conn., is a diversified company providing high technology products and services to the global aerospace and commercial building industries.

For more information, go to: www.PrattWhitneyRocketdyne.com. 

Tuesday, September 27, 2011

Gasification and IGCC in the news

A bright spot for IGCC:

DOE moves to release funding 
for Texas Clean Energy Project

According to today's Fossil Energy Techline, the US DOE issued a Record of Decision (ROD) that – along with a signed cooperative agreement – will allow federal funding to be used to help build the Summit Power Texas Clean Energy Project - an advanced first-of-a-kind clean coal power plant.

The ROD and cooperative agreement between DOE’s Office of Fossil Energy (FE) and Summit sets in motion continued federal cost-shared funds for the project, to be built just west of Midland-Odessa, Texas.

The 400MW facility is a "poly-generation" plant, combining IGCC power generation, urea production, and CO2 capture for use in enhanced oil recovery in nearby oil fields.

The project will be partially funded with $450 million from Fossil Energy's Clean Coal Power Initiative.  About half of this will come from the funds allocated by the American Recovery and Reinvestment Act of 2009 for such projects.

DOE’s action to issue the ROD was reached after considering, among other things, the project’s potential environmental impacts and the options for mitigation of the impacts.

"The Texas Clean Energy Project is vitally important...... and a significant step forward that demonstrates the US commitment to developing clean energy technologies and reducing emissions of greenhouse gases,"
said Chuck McConnell, FE’s Chief Operating Officer.

The plant will convert sub-bituminous coal into hydrogen-rich syngas and CO2. The syngas and high-quality steam will be fed to the combined-cycle plant to produce electricity.  The facility will integrate Siemens' IGCC technology and Linde Rectisol® acid-gas removal technology to capture 90 percent of the CO2 from the syngas—about 3 million tons per year.

A portion of the captured CO2 will be used to produce urea for fertilizer while most of it will be used for enhanced oil recovery  with monitoring, verification, and accounting to demonstrate the permanence of geologic storage. The CO2 will be transported through existing regional pipelines to the oil fields of the west Texas Permian Basin, the largest CO2-EOR region in the world.

Of the 400MW of electrical power generated by the combined cycle plant, about half will be used on site and the other half will be delivered to the power grid. The plant will also produce sulfuric acid, argon, and inert slag as minor products for sale in commercial markets.

According to Summit, sale of CO2  will generate about one-third of the project's gross revenues.

The project is expected to create an average of 650 jobs during construction, with a peak of 1,500 workers. The project’s operational workforce is expected to be approximately 150 workers.

The current schedule is for TCEP to become operational late in 2014 or early in 2015.  This assumes that financial closing will take place early in 2012.

Monday, August 29, 2011

Gasification & IGCC in the news:

Texas Clean Energy
IGCC Still on Track

Summit close to PRB coal
deal for Texas IGCC plant

Summit Power Group, developer of the Texas Clean Energy Project,  is "probably within a month" of closing on Powder River Basin coal supplies for its $2.7 billion Texas Clean Energy Project near Odessa.  So said a company official Wednesday, Aug. 24, at the American Coal Council's Coal Market Strategies conference in Colorado Springs, Colorado.

The TCEP involves a 400-MW integrated gasification combined cycle (IGCC) power plant -- scheduled to start construction next year and enter service in 2015.  It will use 2  million ton/year of PRB coal, says Barry Cunningham, Summit managing director of project development.

Summit is talking with three PRB producers for supplies and is finalizing a contract with one of them, Cunningham said, declining to disclose names.

The business plan for the "polygen" project relies heavily on revenue from the production of byproducts, what Cunningham termed a "diversified revenue stream."

Revenue will come from 2.7 million ton/year of compressed CO2 to be sold for oil production at nearby wells, he said. The plant will capture 90% of its CO2, making it one of the world's highest CO2-capturing plant projects, Cunningham said.

One ton of CO2 yields 2.5 to 3 barrels of additional oil production, he said.

But urea production for agricultural fertilizer is expected to be the biggest component of the plant's revenue stream at 46%, he said.

All told, the plant will yield 190 MW net for power sales to the grid, Cunningham said, elaborating on the high cost of using self-generated power for the plant's CO2-capture system. This process "cannibalizes about 50% of the electricity" production, one conference participant remarked.

 Last month, Gas Turbine World reported that someone close to the project commented that the key issue for TCEP is to keep capital costs in check as it approaches the banking community for project finance.   This positive news about a pending coal supply contract should also help move it in the right direction.

Tuesday, July 26, 2011

With CCS on back burner what happens to coal-based IGCC ?

AEP pullout from large-scale CCS demo is setback for coal-plant retrofit program, and for hopes of IGCC becoming competitive.

Bloomberg Business Week's July 21 issue features a must-read article entitled "What's Killing Carbon Capture?". It reports on the decision by AEP to cancel plans to demonstrate ammonia-based post-combustion CO2 capture at their 1300MW Mountaineer coal-fired power plant in West Virginia.

Citing the high cost of the project and given the fact that the US government has yet to come up with any policy related to carbon capture and sequestration (or "CCS"), AEP announced that they would not go beyond the current $100 million proof-of-concept pilot project at the plant.

Without the requirement for power plants to employ means of reducing CO2 emissions, what can be said about the future for IGCC technology as the preferred form of coal-based power generation in a carbon-constrained world?

As summarized in past issues of Gas Turbine World magazine, numerous industry and government studies have shown that the cost impact of employing post-combustion CCS on conventional coal plants is so great that IGCC + CCS technology (with pre-combustion CO2 removal) would be elevated to the status of the lowest-cost option for future coal-based power generation.

However, if there is no regulatory requirement, or even some significant cost incentive such as a CO2 tax, to coerce power generators to employ CO2 capture,  the apparent 20+ percent cost premium for the use of IGCC vs. conventional PC  technology would be very difficult to justify.

To many, the high cost of current coal-based IGCC projects such as Duke's Edwardsport and the Mississippi Power Kemper County plant has already spelled the end of IGCC as we knew it.

For a while it appeared that the concept of a 'hybrid IGCC' plants was a winning idea,  where coal-derived SNG would be produced for either power generation or injection into the natural gas pipeline.  The associated power plant would be a stand-alone gas-fired combined cycle unit.

But even those projects (for example, Tenaska's Taylorville "IGCC" in Illinois) are proving too expensive, and with the growth of shale gas production and the precipitous fall of natural gas prices, there is no way for SNG from coal to be competitive in the foreseeable future.

Perhaps the answer is "polygneration" - such as being employed at Summit's 400MW Texas Clean Energy Project, where the sale of plant byproducts, including chemicals and CO2 for enhance oil recovery, appears to be making the project economically viable.  This is yet to be seen, however,  as the project developers pursue bank financing.

To this writer, CCS in any shape or form always seemed to be too expensive  - both in capital costs and in its impact on operating costs - for it to be commercially acceptable.   If there were going to be constraints on CO2 emissions, alternative cheaper ways to reduce CO2 emissions would have to come along
With natural gas combined cycle (NGCC) plants emitting only half the CO2 of coal-based generation, and costing only a fraction to build, they have emerged as the clear winner.  This is particularly true in the US under currently depressed natural gas costs, and is making a lot of sense in Europe too, where there is a cost placed on CO2 emissions and shale gas is beginning to come into play.

The Business Week article on the sorry state of CCS does not come as any surprise, especially, as it points out, with the US government putting any specific climate-change regulations on the back burner. Without a clear government policy, industry will only act in its own best interest.
The big question still on the table, however,  is whether or not the US EPA will issue CO2-reduction rules for existing and new coal plants.
The agency has already dug a huge hole for itself with its new rules regarding hazardous pollutant emissions and new interstate pollution rules, which together threaten to shut down a large portion of the US coal fleet.
As I see it, any ruling regarding CO2 emissions, effectively mandating either CCS retrofit or plant closure, has been put off for at least several years.
As AEP has pointed out, they have done their share to host a pilot project to demonstrate that the technology works, now they owe it to their stake holders to put CCS on the shelf while the rules of the game are clarified.  (Recall that AEP also made a big run at IGCC a few years back, only to cancel efforts on several announced projects due to high costs.)

Yes, the requirement to add CCS to coal-based power generation was supposed to "level the playing field" for IGCC to compete.   For now, as long as that requirement doesn't exist, and use of natural gas in a new combined cycle plant is the cheapest way to reduce carbon emissions, IGCC will again have to wait its turn.  Whether or not it ever makes another comeback, is not at all clear.

As described in the May-June issue of Gas Turbine World, this is all points to a sustained period of growth for the gas turbine industry.  Some of the largest coal-based utilities in the US, including AEP, Xcel,  Duke and TVA, are already making plans to shut down their obsolete 50-year old PC plants and replacing them with new high-efficiency NGCC plants.
Even if natural gas prices are to increase by 50% or more from where they are today, studies show that a new combined cycle plant would still make a lot more economic sense than to invest billions in retrofitting those old coal plants to clean them up.