DOE stands behind clean-coal plant despite delays, overruns
Mississippi Power, the utility that owns the Kemper County plant, announced on Aug. 8 that it would delay the facility’s full startup date by one month, to Oct. 31. The plant’s costs were also revised upward by $43 million.
The Kemper plant, which was originally scheduled to open in 2014, features two gasifiers designed to convert lignite coal into a clean-burning gas using a proprietary technology. One gasifier successfully produced the so-called syngas last month, and in a couple of weeks the plant is expected to begin making electricity using the fuel generated by that gasifier, Mississippi Power spokesman Jeff Shepard said in an email to AMI Newswire.
Uncertainties about the future of the Kemper plant, however, have the potential to affect the stock price of Mississippi Power's parent company, the Southern Company.
Southern announced last week that it was attempting to raise $1.6 billion from a public stock option to purchase a 50-percent interest in the Southern Natural Gas Co. and to possibly invest in its subsidiaries. But question marks involving cost recovery for the Kemper plant, as well as many other economic factors, could materially affect the stock’s performance, the company said.
The plant’s potential to give the nation increased options for clean energy generation has been the topic of debate for years. The Department of Energy, which has invested $270 million in the plant, sees coal gasification combined with carbon capture and sequestration (CCS) techniques as an efficient way to supply the energy that will balance variable energy sources such as wind and solar.
“The Department of Energy remains committed to future development of CCS technology as it is critical to help achieve our climate, economic competitiveness and energy security goals,” a department spokesperson told AMI Newswire.
Others are skeptical of coal gasification, calling it an economic boondoggle and arguing that the money invested in such technologies would be better spent on proven carbon-free generation such as wind and solar.
“We don’t see it as holding any potential for being a part of America’s energy future,” said David Pomerantz, executive director of the Energy and Policy Institute in Virginia.
Pomerantz said he knew of no other place where coal gasification combined with CCS is operating on a commercial scale. And he pointed to a similar DOE-backed clean coal project in Illinois called FutureGen, which was abandoned last year due to low investor participation.
Such elaborate technologies can’t compete with the current costs of renewable energy systems, according to Pomerantz, whose institute describes itself as a pro-clean energy think tank and an opponent of fossil fuel interests.
Another nonprofit group, the Virginia-based Climate Investigations Center, says that Kemper is not likely to go online prior to 2017 based on information from engineers who once worked at the plant.
Mississippi Power spokesman Shepard acknowledged that the startup date could change to ensure the safety of the project.
“We will never compromise safety for schedule,” he said. “We never have and we never will.”
The company will continue to analyze how much time is needed to integrate all the systems at the plant prior to startup, Shepard said.
Though the total costs of the plant have ballooned from an original estimate of $2.2 billion to more than $6.5 billion, the Department of Energy said large projects like Kemper that involve complex technology often accumulate costs beyond their original estimates.
“First-of-a-kind projects, like Kemper and other CCS projects, are more likely to exceed original estimates because there are no comparisons available at the onset of planning,” the department spokesperson said.
One section of the facility, the power plant, has been generating electricity using natural gas since 2014. Another section will further refine the syngas and also produce marketable products, such as ammonia and sulfuric acid, in addition to capturing carbon dioxide, Shepard said.
“The carbon dioxide will deliver the additional benefit of being used for enhanced oil recovery that will produce approximately 2 million barrels of domestic oil annually,” he said. The CO2 will be shipped by pipeline to Mississippi’s depleted oil fields to accomplish this, the DOE reports.
The plant uses a proprietary technology called Transport Integrated Gasification, which was developed over the past 20 years through the combined research efforts of DOE and the Southern Company. It’s designed to generate energy from lignite but with very low air pollution, equivalent to a clean-burning natural gas plant.
Mississippi Power estimates that Kemper’s technology will cut carbon dioxide emissions by at least 65 percent.
The utility also points out that international energy companies have expressed interest in using the plant’s technology innovations. To date, Southern Company has signed six agreements — five memorandums of understanding and one letter of intent — with other companies, including South Korean firms that are exploring development of clean coal power.
The DOE sees the technology leading to important reductions of greenhouse gases created in electricity production.
“We believe that the gasification technology is another solution in our tool kit that can use a plentiful and reliable source of energy, like coal, that is produced in the United States,” the DOE spokesperson said.