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.

Wednesday, June 29, 2011

Texas Clean Energy IGCC being readied for financing

TCEP reaches major milestone with signing MOU for PPA

The Texas Clean Energy Project (TCEP) is nearing the point of lining up a group of banks to arrange project financing.

So says one industry leader close to the project.

"The key to achieving the next big step will be keeping capital costs in line,"  he said.

Last week, TCEP took an important step forward with the signing of a memorandum of understanding (MOU) for the purchase of half of the electricity produced by what will be one of the world’s most advanced and cleanest coal-based power plants. 

Under the 25-year agreement, CPS Energy – a municipally owned utility serving San Antonio, Texas – will purchase electricity generated by the first-of-a-kind commercial clean coal power plant starting in mid 2014.

TCEP, a 400MW IGCC facility located near Odessa, TX will capture 90% of its CO2 – approximately 3 million tons annually – more than any power plant of commercial scale operating anywhere in the world.

The project was originally proposed as the losing candidate from Texas for the ill-fated FutureGen IGCC project, which was to be built in Matoon, IL.

In January 2010, DOE awarded a cooperative agreement to Summit Texas Clean Energy to design, construct, and demonstrate an IGCC power plant that can co-produce high-value products and capture CO2.

The CO2 captured from TECP will be used for enhanced oil recovery (EOR) in the West Texas Permian Basin. EOR is a way to squeeze additional hard-to-recover oil from older fields, and is an increasingly important contributor to U.S. oil supplies.

Additionally, the plant will produce urea, a high-value chemical, and smaller quantities of commercial-grade sulfuric acid, argon, and inert slag, all of which will also be marketed.

Summit has selected Siemens gasification and combined-cycle technology for the project, and Fluor was awarded the EPC contract.

CPS Energy signed the MOU to purchase 200MW from Summit Energy's TCEP, or half of the plant's electric energy output. In announcing the agreement CPS Energy President and CEO Doyle Beneby stated that the IGCC plant will be cleanest coal-fueled power project ever permitted in Texas.

Ironically,  five years ago, the utility decided against building its own IGCC plant and instead invested $1 billion in a new 750MW conventional coal-steam plant that was just completed.  At the time, the utility commented that IGCC was "not ready for prime time".

U.S. EPA Administrator Lisa Jackson said in a statement released at the signing ceremonies that  “San Antonio is stepping up to lead Texas and our nation into a clean energy future....."

On the same day CPS announced that it plans to shut down its two-unit late-1970s vintage  JT Deely coal station  to avoid spending as much as $3 billion for environmental equipment needed to upgrade the 871MW plant to comply with pending EPA regulations.

From DOE Fossil Energy TECH LINE and other sources

Tuesday, June 07, 2011

Kemper County IGCC plant "on schedule and budget"


Construction of Mississippi Power Co.'s Integrated Gasification Combined Cycle (IGCC) power plant in Kemper County is on schedule and on budget, the company's head says.

Last year, the Mississippi Public Service Commission approved the company's proposal for the project and in December, ground was broken.

As a result of a law the Mississippi Legislature passed in 2008, the cost of the plant will be passed on to ratepayers in stages while the project is being built. In its approval for the project, the PSC set a cap for the cost of the plant at $2.88 billion.

In a recent speech given by Mississippi Power chief executive Ed Day he said the company aims to keep the cost below the cap. The goal is to have the plant operating in 2014.

"Internally, we really only talk about $2.4 billion," Day said.

The plant has been fought by the Mississippi Sierra Club, which has concerns over environmental aspects of the project, along with the company's plans to pass construction costs on to ratepayers. The Sierra Club contends the plant is dirty, expensive and unnecessary and that natural gas would have been a better fuel source.

The company contends that the price of natural gas is much less predictable than that of lignite coal, which the plant will use. The company says lignite is abundant in Mississippi and represents the best option.

Day said there's a chance large fuel cost savings by using the coal could result if natural gas prices rise substantially over the next few years. Typically, about 50 percent of a ratepayer's power bill goes toward fuel costs.

"We know what (price) the coal will be mined at, within a small tight range, it's just now a matter of what will gas do, and how high will it go," Day said. "There's got to be a natural fuel savings to the customer over long periods of time. That's kind of what wins the day."

The increase on a customer's power bill could range from as much as 33 percent, according to the company, to as high as 48 percent, according to the Sierra Club.

Mississippi Power has said those increases could be phased in over 10 years.

Editor's note: At $2.4 billion, the nominal 600MW Kemper County plant will cost $4000/kW to build. A new natural gas fired combined cycle plant would cost less than one-quarter of that amount. For the total cost of energy (covering investment, fuel cost and other operating expenses) to be the same, natural gas price would have to climb from the current $4 per million Btu to about four times that level. Although those high prices are paid for natural gas today in places like Japan, plentiful supplies in the US are expected to keep the price low for the foreseeable future.

Thursday, March 31, 2011

2010 GTC Conference Wrap-up:

IGCC on the move
despite obstacles

Five US IGCC power projects under construction or being developed will add almost 2500MW over the next 3-5 years.

Once again, a large and far-reaching turnout was attracted by the annual Gasification Technologies Council/EPRI conference attesting to the continued broad interest in the status of project and technology development connected with gasification of coal and other feedstock. 

More than 600 attendees gathered from all over the world attended the 3-day Washington DC event.  The range of topics presented over covered the gamut - from the booming commercial coal-to-chemicals industry in China to the emergence of new gasification-based technologies for the conversion of biomass to synthetic natural gas and liquid fuels.

The November-December issue of Gas Turbine World magazine features comprehensive coverage of  key presentations made at the conference, with focus on major commercial-scale projects under construction and actively under development.  A copy of this convenient wrap-up is now available at this link.