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Battle Royal: Pulverized - Coal vs IGCC

The battle for the future of coal-fired power is heating up. Recent developments give IGCC a fighting chance.

Fortnightly Magazine - December 2005

only to meet NO x and SO 2 controls, but also greenhouse-gas emission controls. We are convinced the likelihood of environmental requirements, including greenhouse gases, will grow, not shrink, over that time.”

Applying this analysis, AEP decided IGCC is the most logical approach for the company to take. AEP hopes to build two IGCC facilities, at sites in Ohio, West Virginia, or Kentucky, with startup planned for 2010 and 2011.

Two main factors allowed AEP to become comfortable with IGCC. First, the company evaluated IGCC experience not only in the United States, but also in other countries. Second, a partnership of GE and Bechtel has agreed to supply the plants as AEP’s turnkey contractor. “The technology is proven worldwide,” Morris says. “And GE will guarantee the performance of the gasifier they design and build for us. We think the landscape is now set for this kind of plant.”

Two features of that landscape became significantly clearer in recent months. First, the Energy Policy Act of 2005 (EPACT) authorizes federal loan guarantees and tax incentives for IGCC projects. Federal authorities are working through implementation processes that could conclude with funds becoming available as early as mid-2006. “We don’t know yet how EPACT will be applied,” Byrd says. “The devil is in the details, and most people are watching to see how those details play out.”

Second, the Department of Defense (DoD) recently put significant new weight behind IGCC by announcing it would call for bids to supply coal-derived synfuels on a long-term basis, as part of its Clean Fuels Initiative (see sidebar, “Coal to Liquids: IGCC’s Killer App”) . “The Department of Defense intends to catalyze commercial industry to produce clean fuels for the military from secure domestic resources using environmentally sensitive processes,” states Dr. Theodore K. Barna, assistant under secretary of defense, at a recent industry conference.

Between incentives in EPACT and firm off-take agreements from the DoD, the federal government might be about to push IGCC across the threshold into immediate financial viability.

Environmental Showdown

As IGCC develops toward full commercialization, it is becoming a disruptive technology that changes the planning analysis for new coal-fired generation options. And as with any disruptive technology, IGCC’s entry into the market brings the potential for legal and economic conflicts at many levels.

On the local level, for example, IGCC represents an alternative that makes prevailing pulverized-coal technologies look dirty by comparison, which can present legal and public-relations problems for companies that have determined other coal-burning technologies are better choices. For example, the Sierra Club has filed suit to block the state of Illinois from issuing a clean-air permit for Peabody Energy’s Great Plains mine-mouth project, arguing that Peabody must consider IGCC as a BACT alternative. In Montana, environmental advocates are lobbying against a 250-MW FBC facility in part on the basis that it would emit more NOx and CO 2 than an IGCC plant. And a columnist in the Fort Pierce (Fla.) Tribune accused Florida Power & Light of “turning back the technology clock” and choosing an “unnecessarily dirty” design for its proposed 1,700-MW