Air Pollution Control Equipment Services, Coal

Coal Activity Heating Up

Issue 3 and Volume 108.

A number of new coal-fired power projects continue to make significant strides toward the construction phase. Meanwhile, Secretary of Energy Spencer Abraham has announced the release of a solicitation for the second round of proposals under President Bush’s Clean Coal Power Initiative (CCPI), in which the U.S. Department of Energy will provide approximately $280 million in matching funds for demonstrating technologies that sharply reduce and ultimately eliminate pollution in coal-based power plants.

In February, Peabody Energy received a draft air permit from the State of Illinois for its planned Prairie State Energy complex in Washington County. Prairie State is a proposed 1,500 MW plant that would be fueled by 6 million tons per year from an adjacent mine. Prairie State is a sister project to Peabody’s planned Thoroughbred Energy plant and mine in Muhlenberg County, Ky. A final permit for Prairie State could come as early as this summer.

Financing and partnership details have yet to be finalized, but Peabody Energy spokesperson Beth Sutton says discussions are underway with a number of investors, partners, plant management entities and power off takers for both Prairie State and Thoroughbred. “We are in discussion with a number of utilities, municipals and electric co-ops for long-term power contracts and there is strong interest in buying power from these plants,” said Sutton, “particularly in light of rising natural gas prices.”

Following on the heels of Peabody’s Illinois draft air permit, Xcel Energy made public a proposal to build a 750 MW coal-fired unit at its Comanche plant near Pueblo, Colo company will include the proposed new unit in its least-cost resource plan, which will feature a mix of coal, wind and natural gas resources. The $1.3 billion project could begin producing electricity by late 2009.

Meanwhile, privately held St. Louis-based LS Power Associates is pursuing plans to develop the White Pine Energy Station, a coal-fired plant near Ely, Nevada. The region has previously been evaluated as a coal plant site by the Los Angeles Department of Water and Power and by an affiliate of PG&E Corp., but those projects did not proceed. The plant could be linked to Sierra Pacific Power Co.’s transmission grid and from there could sell power to utilities and cooperatives in northern Nevada and Utah, potentially including Sierra Pacific Power. LS Power has developed nine natural gas-fired power plants totaling 5,700 MW of capacity, representing a total investment of $3 billion. The Nevada coal plant is targeted for a capacity of 500 to 800 MW of capacity, and could be expanded to 1,600 MW. The project is projected to cost between $600 million and $1 billion and could start operating as early as 2010. The plant would be fired by low-sulfur coal from Wyoming’s Powder River Basin.

Needham, Mass.-based GenPower LLC is pursuing construction of a 600 MW mine-mouth coal plant in McDowell County, West Virginia that would begin producing power in the 2009-2010 time frame. The company is also developing the 600 MW Longview coal plant in Monongalia County, West Virginia.

“We picked McDowell County because of the availability of economic and reliable coal, and the prospective AEP (American Electric Power) transmission line traversing McDowell into an attractive eastern electric market,” said Chris Colbert, vice president of coal power development for GenPower. Permit filing, construction and startup all hinge on AEP’s actions on its 765 kV transmission line that would stretch from Oceana to Wythe County, Va. “We will probably file for the West Virginia permits when AEP begins construction of its power transmission line,” said Colbert. GenPower’s $950 million facility will be a mine-mouth plant fired by pulverized coal using a supercritical steam cycle.

In announcing the second round of CCPI proposal solicitations, Abraham said clean coal is a crucial element of U.S. energy policy and its goals of a balanced, diverse energy portfolio that will provide Americans with energy and economic security and continued environmental improvement. DOE’s call for proposals requires that prospective projects ensure coal is used for at least 75% of the fuel energy input to the process, while electricity is at least 50% of the energy-equivalent output from the technology demonstrated.

DOE is encouraging proposals for coal gasification system advances that enhance efficiency, environmental performance, and reliability as well as expand the gasifier’s flexibility to process a variety of feedstocks (including biomass, municipal and industrial waste co-fired with coal). Advances in gasification-based systems are required to successfully commercialize technologies that will attain the near-zero emissions goals of the Clean Coal Technology Roadmap.

Consistent with the DOE initiative, Cincinnati-based Cinergy Corp. Chairman, President and CEO James E. Rogers has expressed the company’s interest in building an integrated coal gasification combined-cycle (IGCC) generating station to replace one of its older coal-fired power plants. Rogers made the announcement at a workshop on IGCC development sponsored by the John F. Kennedy School of Government at Harvard University.

“IGCC provides a way to continue to use coal, reduce emissions and take a serious look at how we might deal with greenhouse gas emissions,” he said. “We are going to have to continue to rely on coal as a major source of electric generation for the foreseeable future, and this technology could well be the way to get that done.”

Cinergy has already begun preliminary engineering and site analysis to determine the feasibility of a state-of-the-art IGCC commercial plant. Rogers endorsed a proposal developed by William Rosenberg, a senior fellow at the Kennedy School, that would make the project possible through a cooperative arrangement among the federal government, state regulators and the utility that would construct and operate the facility.

Rogers noted Cinergy’s extensive experience working with DOE and the State of Indiana on a coal gasification project at the company’s Wabash River Generation Station. IGCC uses a coal gasification system to produce a synthetic fuel that drives a gas turbine. The by-product steam is processed through a heat exchanger to generate superheated steam that drives a steam turbine.

IGCC facilities can also use a variety of fuels besides coal, such as petroleum coke, various oil products and biomass. IGCC would provide significant reductions in plant emissions over a conventional coal-fired plant with currently required pollution control equipment. An additional benefit is the removal of mercury at a much lower cost than conventional methods.