OUR ENVIRONMENT NEEDS MORE LOCAL REPORTING

The Concord Monitor is launching its Environmental Reporting Lab, a long-term effort to better inform the community about the New Hampshire environment. To launch phase 1 of this effort, we need your help. The money raised will go toward hiring a full-time environmental reporter.

Please consider donating to this effort.

 

Clean coal tech hits snags

Last modified: 5/18/2014 11:23:02 PM
Last November, Energy Secretary Ernest Moniz rode an elevator to the top of the 11-story scaffolding surrounding Southern Co.’s new coal-fired power plant in Kemper County and gazed out over the Mississippi flatlands. Below him lay a new lignite coal mine, new storage facilities and a maze of steel.

The beauty of it all was this: Sixty-five percent of the plant’s carbon dioxide, a greenhouse gas released by all coal-fired power plants, would be captured, carried through a 62-mile-long pipeline and injected into old oil reservoirs to boost output of precious crude. The carbon dioxide would remain buried in the ground, where it would not contribute to climate change. That would make this the first U.S. power plant designed to include commercial carbon-capture technology.

“The risks of global warming and climate change are very real, and we are experiencing the impacts already,” Moniz said later to a gathering of notables that included Mississippi’s governor and Norway’s petroleum minister. “I consider seeing this plant a look at the future.”

Six months later, the future has been postponed. Southern’s advanced coal plant, already running over budget and behind schedule when Moniz visited, has suffered new setbacks. On April 30, Southern said the Kemper plant would not open until May 31, 2015 – a year behind the original target. And while Moniz says that “we’re going to need not 10, maybe 100 more of these plants across the country,” it might be a triumph to finish just one.

The only thing the Kemper power plant is burning now is money. The plant has suffered almost every kind of cost overrun, beset by bad weather, labor costs, shortages and “inconsistent” quality of equipment and materials, and contractor and supplier delays. Southern said in April that it was raising the projected cost of the plant by $235 million, to a total of $5.5 billion, more than double the original estimate.

Thomas Fanning, Southern’s chief executive, said part of the problem was early miscalculations. Given the amount of carbon capture Southern aimed for, “we did not evaluate correctly the amount of pipe, the thickness of the pipe, the metallurgy of the pipe and the quantity of the pipe,” he said. When all that was fixed, the support structures had to be made stronger, too.

Every month of additional delay will cost about 
$25 million, Wall Street analysts estimate. So far, the company has eaten about $1.6 billion in losses because of cost overruns. “It’s been a bitter pill to swallow,” Fanning said in an interview during Moniz’s visit.

This is more than a tale of corporate woe. The Kemper plant also is at the heart of the debate over the Environmental Protection Agency’s proposed regulations to limit carbon dioxide emissions from new coal plants. The EPA has held up Kemper as an example of what can be done. Those regulations, in turn, are central to President Obama’s Climate Action Plan and his strategy to use his executive power at a time when Congress has failed to agree on many measures.

Southern says that once the plant is up and running, its carbon footprint will be smaller than that of a natural gas-fired plant. “It’s going to be the cleanest coal plant in the world,” Fanning boasted.

Under the EPA’s proposed guidelines, future coal plants would need to emit no more than 1,100 pounds of carbon dioxide per megawatt-hour of power produced. That’s well below the current U.S. coal plant average of 1,768 pounds but well above Kemper’s projected emission level. It means that new coal plants, depending on their efficiency, would have to capture 20 to 40 percent of their carbon dioxide emissions.

The Kemper plant is one of two cited by the EPA when it unveiled its proposal – and the other is in Canada.

“We know that CCS has been used and is being used at the commercial scale in other industries,” EPA chief Gina McCarthy said at an April 2 congressional hearing, using the acronym for carbon capture and sequestration and referring to techniques used at chemical plants. “The technology is available; each component of that technology has been in use, has been tested and is viable.”

The comment period for the proposals ended May 9, and the EPA said it expects the comments to number in the millions.

The agency won’t say when it will issue final regulations, but it is widely expected to be early next year. The EPA also expects to issue proposed regulations for carbon emissions from existing plants June 2.

The EPA could still tailor its rules for a new normal for coal plants, but one thing seems clear: The Kemper coal plant may be the only commercial power facility to meet the new standards – and Kemper isn’t normal. That isn’t just because of delays and cost overruns. The plant, for all its financial tribulations, has economic advantages that other coal plants lack.

For one thing, Kemper has had substantial federal funding. The project received a $270 million grant from the Energy Department and $133 million of federal investment tax credits – though by blowing a deadline, Southern will lose some tax benefits.

The most important advantage is the plant’s proximity to a new coal mine and to old Mississippi oil fields. The coal mine has 4 billion tons of minable lignite, enough to supply the new 582-megawatt power plant for a thousand years. Though long-
neglected as a feedstock because of its high moisture content, lignite coal, after drying out for three days, is fine for the type of plant Southern is building. Fanning said that tapping the deposit was “like waking up and finding money in your attic.”

The old oil fields offer an opportunity for enhanced oil recovery. Fanning said Kemper’s carbon dioxide will add 2 million barrels a year to U.S. oil output. A speck compared with total U.S. oil consumption, it’s still a useful revenue stream for Southern. Fanning said that the CO2 price will be linked to oil prices. Without divulging exact terms, Fanning and industry analysts estimate that if CO2 is priced at $40 a ton and oil prices stay around $90 a barrel, the economics make sense. Kemper’s carbon dioxide will be sold to Denbury Resources, an oil firm operating the Heidelburg field, which was discovered in 1944.

Moniz said that by selling carbon dioxide and other byproducts, Kemper could earn an extra $80 million a year.

With the EPA advancing to the next stage of rulemaking, coal companies, Republican lawmakers and others are making a huge push to change its course. They are complaining that the EPA standard for carbon dioxide emissions will kill plans for any new coal plants.

“I mean, there is clearly a war on coal,” Rep. Steve Scalise, a Republican from Louisiana, said at the April 3 hearing.

The Florida Public Service Commission wrote in a letter to McCarthy that it is “concerned” that the EPA’s plans to regulate carbon emissions “have the potential to reduce fuel diversity, adversely impact reliability, and increase costs for Florida’s energy consumers.”

The U.S. Chamber of Commerce and others also weighed in as part of an organization formed late last year and called the Partnership for a Better Energy Future.

But many energy experts say the whole fight over the proposed EPA regulations is moot. Even before the EPA proposals, companies shied away from building new coal plants in an age of cheap natural gas, brought on by a boom in shale gas drilling.


Jobs



Support Local Journalism

Subscribe to the Concord Monitor, recently named the best paper of its size in New England.


Concord Monitor Office

1 Monitor Drive
Concord,NH 03301
603-224-5301

 

© 2021 Concord Monitor
Terms & Conditions - Privacy Policy