By Daniel Pye<br><a href="mailto:pyed@gnnewspaper.com">E-mail Dan</a>
The Tonawanda News
North Tonawanda, NY
July 27, 2008 12:39 am
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By Dan Pye
pyed@gnnewspaper.com
W hen news of the proposed Huntley clean coal plant’s demise first hit last week, many reacted with shock.
But as trends around the nation have shown, the failure should have come as no big surprise.
From its inception, a plant that could turn coal into gas before burning it, then store the carbon dioxide byproduct underground was ambitious at best — especially when experts took into account the scale NRG was proposing for the project.
After then-Gov. George Pataki approved the plan, a conditional award for power purchases was issued by the New York Power Authority if NRG could bring down the cost of generating the electricity with the new environmentally friendly process.
The groups then set to work, but a year later, no solutions had been found.
The technology at cornerstone of the Huntley proposal has never even been tried — let alone been proven to work. NYPA leaders said they had no choice but to back away from the investment when projected costs continued to skyrocket. Even with substantial state government subsidies, the cost of the power the plant would produce couldn’t come close to meeting current market prices, said NYPA spokeswoman Christine Pritchard.
“The economic, technical and regulatory obstacles are too great to warrant further efforts at this time,” Pritchard said when the Huntley plan was scrapped two weeks ago.
Ben Cipiti, an energy industry expert at Ohio University and author of the book “The Energy Construct,” has examined the types of energy that power the U.S. and is hopeful that clean coal power will become more commonplace. But there are some hurdles that must be overcome before a new generation of coal plants will be economically feasible.
“Right now, the cost estimates I’ve seen for full-scale (carbon) sequestration raises the cost of electricity about 2 cents per kilowatt hour,” Cipiti said. “But those are just estimates, because they’ve never done any of this on a significant scale.”
Others have failed, too
Government investment was supposed to close that cost gap and give the Huntley plant and others a head start at becoming competitive. Comparable plants in six other states have hit a wall, too, when costs of building materials and natural resources jumped along with gas prices. But as the country moves forward with new coal projects, state governments aren’t the only ones having problems coming to grips with increased costs.
A project planned under a program called FutureGen, slated to be completed in Mattoon, Ill. as of December 2007, was scrapped in January when similar cost concerns arose. Despite complaints from the Mattoon backers, Energy Secretary Samuel Bodman pulled the plug on the one $1.8 billion project, instead moving toward providing smaller amounts of government funding for multiple projects.
The logic behind the move is the same used by a gambler at a roulette wheel laying less money on more options: One of them is bound to work.
On June 24, the U.S. Department of Energy released new guidelines for investment in multiple commercial-scale clean coal power plants with carbon capture and storage technology under the restructured FutureGen program. They’re now looking to multiple cost-shared projects to advance the science of capturing and storing carbon dioxide and plan on doling out $290 million in funding through 2009 and $1 billion annually in later years if Congress gets on board.
For some projects, the lack of government funding is a deal breaker. In a release issued hours after the NYPA decision to pull out of Huntley’s 680-megawatt Integrated Gasification Combined Cycle process plant, President and CEO of NRG David Crane said the move ended their pursuit of the new Tonawanda facility.
“Of course, we are disappointed in the state’s action today, but we recognize that the necessary funding was not there,” Crane said. “The Huntley IGCC project was, in many ways, ahead of its time.”
What lies ahead
Even though the government has slackened its support of the project, the FutureGen Alliance won’t let the Mattoon plant die. The group’s leaders were heralding the Senate Appropriations Committee for delivering $134 million in federal funding slated for the project at Mattoon, included in the energy and water appropriations bill for 2009.
“Protecting the funding for FutureGen at Mattoon will help keep the project moving forward into next year so that the next presidential administration can decide how to put the project back on the fast track,” Michael Mudd, CEO of the FutureGen Alliance said. “This action keeps the momentum going in the effort to build the world’s first near-zero emission coal-fueled power plant.”
They also don’t have a “go big or go home” mentality in terms of the aid they’re seeking. Southern Illinois University’s Clean Coal Review Board awarded the group $2 million in grants for gasification, plant production and plant efficiency studies, which they hope to match and surpass with up to $6 million in private money for engineering and cost control studies.
Some of that money will likely go toward figuring out how to sequester carbon emissions cheaply. Other parts will be aimed at figuring out how to store the byproducts in the long term, Cipiti said.
“They’ve done some initial estimates on pumping the CO2 into old wells, but that leads to a lot of regulatory issues,” Cipiti said. “Once it’s put down there, who’s responsible if it begins to leak out? It will eventually be a government responsibility or the utility’s responsibility, but I’m not sure anyone wants to deal with that yet.”
Building for the future
NYPA cited the unanswered questions over carbon storage as one of the primary reasons for pulling out of the project. Eventually both sides, public and private, will have to agree or one will have to step up to the challenge before real progress can be made.
Smaller plants, such as the one approved for Jamestown, seem to be the stepping stone to massive endeavors. If the costs can be mastered at a level 10 percent of the size of the proposed Huntley plant, it will lend credibility to enlarging the model.
Lawmakers like state Sen. George Maziarz, R-Newfane, are already at work reviving other clean coal projects, such as the one proposed by AES Somerset that competed with Huntley in 2006. Jon Reimann of AES Somerset has said the plant would be very interested in the clean coal plant project. With more federal grants becoming available and a grass-roots fundraising strategy, Western New York might not be out of the race to develop the world’s first truly “clean” coal-fired power plant.
In the near future, the costs might not be so prohibitive, Cipiti said.
“The government has to stay involved with clean coal plants, because coal is one of our main resources,” Cipiti said. “(These plants) might be expensive, but considering where the cost of energy is going now, we might reach a point soon where the current definition of expensive is more competitive.”
Contact reporter Dan Pye
at 693-1000, ext. 158.
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