Under the agreement – the first U.S. purchase by a utility of low-carbon power from a commercial-scale, coal-based power plant with carbon capture – CPS Energy of San Antonio will purchase approximately 200 megawatts (MW) of power from the Texas Clean Energy Project (TCEP), located just west of Midland-Odessa.

The 400-MW TCEP plant is a first-of-its-kind Integrated Gasification Combined Cycle (IGCC) poly-generation facility believed to be the cleanest coal-fueled power plant operating anywhere in the world. The facility is capable of capturing 90 percent of the carbon dioxide (CO₂) it produces, as well as 99 percent of sulfur dioxide, 90 percent of nitrogen oxide, and 99 percent of mercury.

TCEP was a third round selection under DOE’s Clean Coal Power Initiative, a cost-shared collaboration between the Federal government and private industry aimed at stimulating investment in low-emission coal-based power generation technologies through successful commercial demonstrations. The $2.4 billion plant will receive $450 million in funding from the Clean Coal Power Initiative; of this, $211 million comes from the American Recovery and Reinvestment Act of 2009. The facility is expected to be fully operational in 2015.

Many experts view gasification technology as the future for coal-derived electricity. DOE’s Office of Fossil Energy has been instrumental in the research, development, and deployment of IGCC and other innovative energy technologies and is playing a pivotal role in advancing America’s energy future while helping to enhance environmental protection.

Gasification uses oxygen and steam at high pressures to convert coal into synthesis gas, also known as syngas, which is mainly a mixture of hydrogen and carbon monoxide. In a non-carbon-capture plant, the syngas is cleaned to remove impurities and sent to a gas turbine where it undergoes combustion to produce electricity. The hot flue gas from the gas turbine, containing CO₂, is used to generate steam, which is fed to a steam turbine to produce additional electricity and then vented to the atmosphere. This process is known as integrated gasification combined cycle (IGCC) because coal-fired gasification is integrated into a combined-cycle system that produces electricity from both the gas turbine and the steam turbine.

In the TCEP carbon capture plant, the carbon monoxide in the syngas will first be “shifted” to produce additional hydrogen and CO₂, cleaned of impurities, and then separated into pure streams of hydrogen and CO₂. The hydrogen will be combusted in an advanced combustion turbine, producing a carbon-free flue gas. Of the nearly 2.9 million metric tons of CO₂ that will be captured annually at the TCEP plant, approximately 83 percent will be used for enhanced oil recovery in the West Texas Permian Basin, a process that both prevents the greenhouse gas from entering the atmosphere and enables more oil to be produced from regional oilfields; the remainder will be to produce urea, a high value product. The production of a co-product in addition to electricity significantly improves the overall economics of the process.

Compared to traditional power plants, IGCC offers many advantages, including increased power plant efficiency and resulting lower-cost electricity. Unlike conventional power plants that remove environmental contaminants from the large-volume nitrogen-containing flue gas after combustion, IGCC power plants remove contaminants before combustion. Because gasification plants operate at high pressure with oxygen instead of air, the volume of gas that has to be treated is nearly two orders of magnitude lower, making the removal of environmental contaminants much easier. In addition, CO₂ is much easier to capture and is produced at higher pressures than that from conventional power plants.

Today, approximately 80 percent of the energy consumed in the United States comes from coal, petroleum, and natural gas, with coal-fired power plants accounting for approximately half of the electricity generated. With increasing global energy demands, coal is expected to continue to play a dominant role in meeting future energy needs. The implementation of clean, state-of-the-art coal-based technologies will ensure America’s energy security while mitigating the environmental impacts of fossil fuel use.

Source: US Department of Energy

The proposed Texas Clean Energy Project is a 400-MW integrated gasification combined-cycle facility to be built 15 miles west of Odessa, Texas, being pursued by developer Summit Power Group Inc. The plant will capture 90% of emitted CO2 — an estimated 3 million tons annually — and use it for enhanced oil recovery in Texas.

In a Sept. 27 news release, DOE said it issued a record of decision, or ROD, for the project that together with a signed cooperative agreement will allow federal funding to be used to help construct the IGCC plant.

“The integration of carbon capture, utilization, and storage technologies planned for this flagship project are vitally important to America and the world,” said Chuck McConnell of the DOE’s Office of Fossil Energy. “The Texas Clean Energy Project is a significant step forward that demonstrates the Administration’s commitment to developing clean energy technologies, creating jobs, and reducing emissions of greenhouse gases.”

DOE said that during the ROD process it considered the potential environmental impacts from the project, the practical options for mitigating the impacts and the importance of achieving programmatic and legislative mandates.

The project, managed by the Office of Fossil Energy’s National Energy Technology Laboratory, will be partially funded with $450 million from DOE’s Clean Coal Power Initiative, or CCPI. Approximately $211 million will come from American Recovery and Reinvestment Act funds dedicated to the CCPI, DOE said. The CCPI is a cost-shared partnership between the federal government and private industry with a goal of stimulating investment in low-emission, coal-based power generation technology through successful commercial demonstrations.

The Texas Clean Energy Project’s total capital cost in 2009 dollars is $1.73 billion, according to the DOE. The balance of the project funding is expected to come from private sector investors and lenders. The project is expected to employ an average of 650 construction workers during construction with a peak of 1,500 workers.

Summit Power Group has signed agreements with companies to sell both the CO2 and the electricity generated by the plant.

The Texas Clean Energy Project is far from the only new coal-burning plant moving forward, despite the gloomy headlines about coal unit retirements from cheap natural gas and strict air pollution regulations. In fact, several thousand megawatts of coal-fired generation are under construction and expected to come online in the next few years. Almost all of the new coal capacity is in the South and Midwest. Many units are in advanced stages of construction, and many still face legal challenges.

source: SNL Financial by Dan Lowrey

The $380 million does not include the cost for carbon storage, Duke said in a June 24 executive summary report that it filed with the Indiana Utility Regulatory Commission. The price would be outside the $2.72 billion cost cap Duke has proposed for the coal gasification power plant.

In the executive summary report, Duke Energy Indiana discussed its front-end engineering and design study for the plant. Parts of the report were not made public for confidentiality reasons.

Duke said this is the most detailed review to date of retrofitting any type of commercial coal plant with carbon capture. A Duke spokeswoman said recently that the integrated gasification combined-cycle plant is 75% complete and expected to enter service in 2012.

The state had ordered Duke to investigate carbon capture as a condition of the certificates of public convenience and necessity Duke received for the IGCC in November 2007.

In early 2009, Indiana approved Duke’s rate recovery of up to $17 million for the carbon capture study. The company has deferred about $15 million of study costs on its accounting books and records and accrued an additional $1.3 million of carrying costs through May 2011.

Also, Duke has filed a request to do a study of carbon storage options related to the Edwardsport IGCC, with a phase one site assessment and characterization study estimated to cost $42 million. That case is pending before the IURC.

As for the carbon capture retrofit project, it consists of a CO2 capture unit, a CO2 compression unit and CO2 dehydration unit, as well as supporting balance-of-plant systems.

The nominal rate of CO2 capture predicted in the FEED study is 23%, on the basis of carbon converted during the gasification of the coal feedstock. The estimated net power loss from implementing carbon capture is 54 MW, which would reduce the nominal net power output of the IGCC power plant to 564 MW, Duke said in its filing. The plant is scheduled to use locally mined Indiana coal.

Duke said it expects the carbon capture project to take 39 months to complete once regulatory permits are obtained, with capital costs an estimated $380 million. In the coming months, Duke will continue to evaluate the carbon capture study results along with the various carbon storage options.

The companies that worked with Duke on the study included General Electric Co. and Burns & McDonnell Engineering Co. Inc.

source: SNL Energy by Wayne Barber

DOE said in a May 23 Federal Register notice that it would put $1 billion in federal funding, most of it appropriated in the American Recovery and Reinvestment Act, into the FutureGen 2.0 program. DOE wants comments from interested parties on the environmental issues that should be addressed in the EIS, including project impacts on floodplains and wetlands. Public scoping meetings will be held June 7-9 to discuss FutureGen.
DOE noted that it entered into separate cooperative agreements with Ameren Energy Resources Co. LLC and with FutureGen Industrial Alliance Inc. defining DOE’s proposed action. The program consists of an oxy-combustion large-scale test undertaken by Ameren at its Meredosia plant in westcentral Illinois and a pipeline and CO2 storage reservoir undertaken by the alliance.
In addition, the alliance would construct and operate facilities for research, training and visitors in the vicinity of the sequestration site. The alliance’s preferred sequestration site is in Morgan County, Ill., with two alternative sites, in Christian and Douglas counties, Ill.
The FutureGen 2.0 program consists of the two separate cooperative agreements with Ameren and the alliance. Ameren’s partners include Babcock & Wilcox Power Generation Group and Air Liquide Process & Construction Inc. The alliance is a nonprofit corporation that represents a global coalition of
coal producers, coal users and coal equipment suppliers, including full members Alpha Natural Resources Inc.; Anglo American plc; CONSOL Energy Inc.; Louisville Gas and Electric Co. and Kentucky Utilities Co.; Peabody Energy Corp.; Rio Tinto Energy America; and Xstrata plc. LG&E and KU are units of PPL
Corp. Rio Tinto Energy America is part of international miner Rio Tinto plc.
The new oxy-combustion facility at Meredosia would be capable of running a range of coals and operating conditions. The data generated would be used to expand the market for oxy-combustion technology. The scope of the test includes steps from design, to start-up, to commercial operation and testing of
an integrated oxy-combustion coal boiler with CO2 capture, purification and compression. The revamped unit would generate about 200 MWe gross, with a net output estimated at 140 MWe.

Meredosia is on east side of the Illinois River, south of Meredosia, Ill. The plant includes four generating units, three of which are coal-fired and one of which is oil-fired. Unit 4, built in 1975, is an oil-fired unit that is currently idle. The steam turbine and generator have low operating hours and could be placed into service as part of the repowered oxy-combustion design, DOE noted. The 5,300-foot western boundary of the 260-acre Meredosia plant site fronts the Illinois River, where the station’s oil and coal barge unloading facilities are located. The land immediately adjacent to the station on the north, northeast and southeast is railroad property; other immediately adjacent property is roadway.

SNL Energy data shows that the sole coal supplier in January and February to the existing Meredosia 1-3 coal units, which have a total of 215 MW of operating capacity, was Peabody’s North Antelope Rochelle mine in the Wyoming Powder River Basin.

Oxy-combustion system lives on oxygen. Oxy-combustion technology involves the use of a mixture of nearly pure oxygen and recycled flue gas, which is primarily CO2, rather than air. An air separation unit produces the oxygen. The concentrated and compressed CO2 from the boiler would be transferred to a pipeline for transmission to the storage location. The oxy-combustion technology during normal operations would produce near-zero emissions of NOx, SOx, mercury, particulate matter and other pollutants typical of a conventional coal-fired boiler. The plant would be designed to capture about 1.3 million tonnes of CO2 per year from the oxy-combustion system and is targeted to achieve a CO2 capture rate exceeding 90%.
The alliance’s preferred site for geologic storage in Morgan County is approximately 30 miles from the Meredosia plant, and the alternate sites in Christian and Douglas counties are about 75 and 125 miles, respectively, from the plant site. The alliance would construct a pipeline to transport CO2 from Meredosia to the selected storage site, where it would be injected through deep wells into the target geologic formation. The pipeline and storage reservoir would be designed to inject and store approximately 39 million tonnes over a 30-year operating period. Depending on stakeholder and landowner acceptance, the alliance also may consider other sources of CO2 in addition to that from Ameren’s plant for injection. That is an important point, since other coal-fired plants in the region may have to eventually install CO2 capture and storage systems.
The target formation for CO2 injection and storage is the Mount Simon sandstone formation, one of the Illinois Basin’s major deep saline formations. The formation’s advantages include its isolation from other strata, as well as its depth, lateral continuity and relative permeability. Archer Daniels Midland Co.
also has targeted the Mount Simon sandstone as the storage site for a test CO2 well in Illinois, with the CO2 captured from an ADM ethanol production facility.
The Mount Simon is bounded below by a Precambrian igneous rock and above by the Eau Claire formation, which is a mixture of tightly layered shales with low permeability, as well as by secondary caprock formations above the Eau Claire. Under the Safe Drinking Water Act, the alliance would be required to obtain a Class VI underground injection control permit from the U.S. Environmental Protection Agency.
The new unit would begin operations, including CO2 capture, purification and compression, in 2016 and complete federally funded operational testing in 2018. The pipeline and CO2 storage reservoir would become operational at the same time and complete federally funded project activities in 2020.
The schedule is contingent upon Ameren and the alliance receiving the necessary permits and regulatory approvals, as well as needed financial closing, including final agreements on DOE’s financial assistance.

Source: SNL Energy, May 23, 2011

While the United States has been working with other countries, like Australia, to develop carbon capture and storage technologies, we have been leading the way when it comes to fully developing those projects. Energy Efficiency News reports:

The number of carbon capture and storage (CCS) projects around the world increased by 21 during 2010 taking the total to 234, up 10% on the previous year, according a new report. The report, The Global Status of CCS: 2010, from Australia’s Global CCS Institute finds that of the total, 77 are fully-integrated large-scale projects … [T]he US continues to lead the way with 39 of the total 77 large-scale projects … Within Europe, Norway, the UK and the Netherlands are leading the vanguard with 11 large-scale projects in development.

The United States continues to be a world leader in advanced coal technologies not only because of the investments we make. Our leaders also recognize that advanced coal technologies need to be developed in order to continue to use of one of the world’s most abundant resources with as small of an environmental impact as possible. Just last week, Secretary of Energy Steven Chu said to the Senate Budget Committee:

The world will continue to rely on coal-fired electrical generation to meet energy demand. It is imperative that the United States develop the technology to ensure that base-load electricity generation is as clean and reliable as possible.

Plus, taxpayers reap the benefits of our investments into CCS projects. In a 2009 ACCCE-commissioned study, American taxpayers see a quick and significant return on federal investments in advanced coal technologies, gaining $13 in benefits for every dollar the government invests.

source: American Coalition for Clean Coal Electricity, March 11, 2011

The FutureGen Alliance announced on February 28 that it has selected Morgan County, Illinois to sequester carbon dioxide emissions that would come from a coal-fired power plant 32 miles from the site.

The long-stalled $1.3 billion project, which includes CO2 storage, a visitor center, research and training facilities, is backed by $1 billion in federal funding from the American Recovery and Reinvestment Act and $300 million in private investment. Approximately 30 communities competed in the site selection process in the second try to get the project off the ground.

The future of the project hinges, in part, on Ameren Energy Resources scoring an agreement with the Illinois Power Agency to buy the power its plant Meredosia would produce. The company wants a 30-year contract to guarantee the power it produces will have a buyer, a path other clean coal projects have followed in recent legislative sessions. Under Illinois law, 5 percent of the state’s electricity must come from “clean coal” facilities that capture at least 50 percent of their greenhouse gas emissions by the year 2025.

Marcelyn Love, a spokesperson for the Department of Commerce and Economic Opportunity, said the IPA and Ameren have had some “initial discussions” about a potential long-term contract. That contract would need to be approved by the Illinois Commerce Commission.

Sue Gallagher, a spokeswoman with Ameren, said the company is still determining if the project is technically and commercially sound.

An oil-fired burner at the plant — ranked by the Institute for Southern Studies in 2006 as one of top 100 polluting U.S. electric facilities — would be repowered with an oxy-combustion coal burner, and approximately 1.3 million tons of carbon dioxide emissions each year would be piped underground. According to Ameren, FutureGen would be the first large-scale project of its kind in the U.S.

Kenneth Humphreys, CEO of the FutureGen Alliance, said the project is expected to bring more than 1,000 construction jobs and 1,000 service sector jobs.

Originally, the FutureGen project called for a zero-emission power plant to be built in Mattoon; its carbon dioxide stored underground. Mattoon backed out last year after the project was significantly revised.

FreightCar America Inc. will produce 3,000 rail cars at its Roanoke manufacturing plant under a contract with Norfolk Southern Railway Co., putting more than 200 people to work at the East End Shops downtown.

Production will begin this May on the first 1,500 high-capacity coal cars under a $100 million contract with Norfolk Southern. Gov. Bob McDonnell and executives from the two companies announced the deal in Richmond on Monday morning at a windswept triple rail crossing near the James River.

“It shows that this economic recovery that we’ve been talking about this last year in Virginia is continuing,” McDonnell said.

Chicago-based FreightCar America laid off much of its Roanoke work force in 2009. It resumed production in January under a contract with BNSF Railway and now employs about 120 people at the Roanoke plant, general manager Mark Saylor said.

Saylor said the company will employ between 200 and 250 people when it begins producing cars for Norfolk Southern this spring. FreightCar America will give hiring preference to workers who have experience at the facility, Saylor said.

“We had as many as 400 people working in the facility before,” Saylor said. “Some of them have moved in to other jobs, but for the most part a lot of the guys have shown an interest in coming back.”

Norfolk Southern is resuming the process of replacing its aging coal car fleet, an effort that began in 2007 and was suspended because of the severe economic downturn. Company officials said the two-year contract with FreightCar America is a sign of an improving economy and an increased demand for coal.

“I’m now very pleased that the economy, and the coal market in particular, has shown sufficient strength to justify resuming our program,” said John Rathbone, Norfolk Southern’s executive vice president for administration. “This is an investment in what we are confident is a long and prosperous future in the coal market.”

Rathbone said Norfolk Southern’s initial $100 million order with FreightCar America represents a significant portion of the company’s 2011 capital budget for rolling stock.

“We’re especially pleased that the money will be going to our neighbor, FreightCar America, in a city that’s very important to Norfolk Southern,” Rathbone said. “It will be good to see the East End Shops of Roanoke opened again, where there will be good-paying jobs for the citizens of Roanoke and they will be producing equipment that’s vital to our single largest commodity — coal.”

FreightCar America will produce steel triple hopper rail cars than can carry up to 4,200 cubic feet of cargo and a lightweight hybrid car that company officials describe as uniquely suited to carrying eastern coal.

“They’re producing a great car for us at a competitive price,” Rathbone said of FreightCar America. “They certainly have an advantage being right on our line between the coalfields and Norfolk.”

And Monday’s announcement is good news for workers who have been idled by the slowdown in rail car production, said Don Davis, the president of the Transportation Communications Union Local 6016.

“It looks like the economy is bouncing back,” Davis said.

Source: Roanoke Times, Feb. 21 2011

But the project partners, working with the state of Illinois, will develop a regional carbon dioxide storage site in Mattoon and a CO2 pipeline network from Meredosia to Mattoon that will transport and store more than 1 million tons of captured CO2 per year, the DOE said in a news release.

Secretary of Energy Steven Chu and Sen. Dick Durbin, D-Ill., on Aug. 5 announced the awarding of the $1 billion in Recovery Act funding to the “FutureGen 2.0″ effort, comprising FutureGen Industrial Alliance Inc., Ameren subsidiary Ameren Energy Resources Co. LLC, Babcock & Wilcox and Air Liquide Process & Construction Inc.

According to a statement from the companies, construction is expected to begin in 2012, with a targeted completion date in the third quarter of 2015.

The funds will enable the public-private partners to repower Ameren’s oil-fired Meredosia unit 4 with advanced oxy-combustion technology. The plant’s new boiler, air separation unit, CO2 purification and compression unit should capture 90% of CO2 emissions and eliminate most SOx, NOx, mercury and particulate emissions. In the new configuration, the plant will generate 200 MW. Ameren Energy Resources estimated that the retrofitting of the plant is expected to create about 500 construction jobs and allow Ameren to recall 50 permanent workers laid off last year.

DOE officials said the project is true to the spirit of FutureGen by bringing about a near-zero-emissions coal plant and paving the way for Illinois to become a leader in carbon capture and storage.

This project will also provide performance and emissions data for future commercial guarantees and establish operating and maintenance experience for future large-scale commercial projects. The FutureGen alliance will help design the test program for the new facility to incorporate a broad range of coals and operating conditions to expand the market for this repowering approach, the DOE said.

“Today’s announcement will help ensure the US remains competitive in a carbon constrained economy, creating jobs while reducing greenhouse gas pollution,” Chu said in a statement. “This investment in the world’s first, commercial-scale, oxy-combustion power plant will help to open up the over $300 billion market for coal unit repowering and position the country as a leader in an important part of the global clean energy economy.”

Earlier this summer, the DOE extended its current operating agreement with the FutureGen alliance through the end of August.

“As with the original FutureGen, Mattoon and the state of Illinois are positioned as leaders in innovative technology that can serve as a model for the nation,” Durbin said in the statement. “The new project stays true to the original goal of dramatically reducing pollution and providing thousands of good paying jobs in our state.”

The project partners estimated that the new pipeline network is expected to create 275 construction jobs and 75 permanent jobs. The pipeline network, along with the repository in Mattoon, helps to lay the foundation for a regional CO2 network. The Mattoon site will be used to conduct research on site characterization, injection and storage, and monitoring and measurement.

Oxy-combustion burns coal with a mixture of oxygen and CO2 instead of air to produce a concentrated CO2 stream for safer, permanent storage. In addition, oxy-combustion technology creates a near-zero-emissions plant by eliminating almost all of the mercury, SOx, NOx and particulate pollutants from plant emissions.

FutureGen was first envisioned in the Bush administration as a way to make the U.S. a leader in “decarbonizing” coal-generated power. The Bush administration eventually shelved plans for the 275-MW research-oriented coal plant that would be built in Mattoon, largely due to cost concerns. FutureGen experienced renewed interest from the Obama administration but still experienced troubles due to tough economic times and the withdrawal of a couple of leading members of the FutureGen coalition.

By: Wayne Barber at SNL Financial, dated Thursday, August 5, 2010