Public Utilities Reports

PUR Guide 2012 Fully Updated Version

Available NOW!
PUR Guide

This comprehensive self-study certification course is designed to teach the novice or pro everything they need to understand and succeed in every phase of the public utilities business.

Order Now

Coal Gasification Gets Real

The technology works, but public policy will dictate its future.
Fortnightly Magazine - January 2005

whether they are bankable."

In fact, the framework for a commercial IGCC business has begun taking shape. Specifically, in June 2004, GE Energy acquired the gasification business of Chevron Texaco, which had demonstrated its design at TECO's plant in Florida. The GE acquisition followed Conoco Phillips' 2003 buyout of the competing e-Gas technology developed by Dow Chemical and demonstrated at Cinergy's Wabash River IGCC facility in Indiana.

In fact, the framework for a commercial IGCC business has begun taking shape. Specifically, in June 2004, GE Energy acquired the gasification business of Chevron Texaco, which had demonstrated its design at TECO's plant in Florida. The GE acquisition followed Conoco Phillips' 2003 buyout of the competing e-Gas technology developed by Dow Chemical and demonstrated at Cinergy's Wabash River IGCC facility in Indiana.

Additionally, GE has allied with Bechtel to develop commercial IGCC plant designs, and Conoco Phillips has done the same with Fluor Corp. Meanwhile, European companies Shell and Krupp Uhde merged their gasification technologies in 2002 and are working together to market their combined system.

All these developments bode well for IGCC's commercialization. "These are three quality technologies, and their owners have the resources and technical capabilities to do it right," Simbeck says. "You also have serious competition among the leading gasification technologies, and that is a very positive trend."

Indeed, some power generators are encouraged enough that they are beginning to include IGCC in their resource plans. Specifically, AEP announced at the end of August that it would build at least one IGCC plant totaling 1,000 MW or more as soon as 2010. The company is still evaluating vendors and siting options. "We've identified some potential sites in the eastern AEP region," Mudd says. "We have the full commitment of the company from the top down, and we're anxious to make it happen as soon as possible."

Then, in late October, Cinergy signed a letter of intent with GE and Bechtel to develop plans for a 500-MW to 600-MW IGCC facility for PSI Energy in Indiana, prospectively at the site of PSI's Edwardsport PC plant. "We've had formal discussions with some of the [state PUC] commissioners and the governor, and they are very interested in bringing IGCC to Indiana," Stowell says. "We have a pending generation shortage in Indiana, and IGCC is the way to go."

Among the commercial IGCC facilities being considered in the United States, Excelsior's Mesaba plant is furthest along in development. In addition to the aforementioned legislative and financial milestones, the project gained a state exemption obtaining a certificate of need for both generation and transmission facilities. The project's site, located in one of Minnesota's most economically strapped areas, qualifies the project for various tax benefits. And in 2003, Excelsior successfully lobbied to get a DOE loan guarantee included in the omnibus energy bill-which, though defeated in the 108th Congress, appears certain to re-emerge in the 109th.

Excelsior, however, is not putting all its eggs in that decidedly unpredictable basket.

"We have Credit Suisse First Boston as our financial adviser, making sure there won't be a disconnect by