Thursday, January 13, 2011

Gasification & IGCC Industry News

Illinois Senate vote could
derail Taylorville coal project

Yesterday, the Illinois state Senate voted against apporoval of proposed rate subsidies for Tenaska's planned Taylorville power project by a vote of 18 to 33. The proposal had been previously approved by the Illinois state House, which voted (63 to 50) on it last November.

Tenaska planned to commence construction on the $3.5 billion project in mid 2011. Without the Senate approval, Tenaska will need to reconsider its plans.

The project design incorporates Siemens' technology to gasify Illinois coal to produce a synthetic gas ("syngas"), which would be used as fuel to generate electricity in the 602MW combined cycle facility.

Tenaska expects to include pre-combustion processing of the syngas to capture more than 50 percent of the CO2 produced, thereby making the CO2 emissions similar to a natural gas fired power plant. The captured CO2 would then be sequestered, either by storing the CO2 underground in Illinois or transporting the CO2 via pipeline to Gulf Coast states, where it would be injected into oil fields to enhance oil recovery.

Tenaska plans to rely upon federal support for the project, which is sited approximately 200 miles south of Chicago in Christian County. The company has stated that it is waiting for final approval on a $2.579 billion federal loan guarantee and that it plans to use a $417 million federal tax credit.

There has as yet been no statement from Tenaska as to the impact of the state Senate vote to deny the state-subsidized rates for the power to be sold from the project.

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