Wednesday, June 29, 2011

COAL GASIFICATION NEWS:
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




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