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.

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