DOE walks the clean coal talk
The U.S. Department of Energy and the U.S. Treasury Department have awarded $1 billion in tax credits to nine companies for seven projects involving advanced coal-fired generation or coal gasification. The awards were the result of a competition for which the DOE said it received 49 applications.
Of the seven awards, five were for gasification projects and two were for advanced coal (such as ultrasupercritical) initiatives. The 2005 Energy Policy Act provided for $1.3 billion in tax credits to encourage private investment in what the DOE describes as "advanced clean coal facilities" and a separate pool of $350 million in credits for gasification projects.
The big winner in the tax credit contest was Duke Energy, which landed two awards: $133.5 million for its 795-MW Edwardsport integrated gasification combined cycle (IGCC) project in Indiana (Figure 1) and $125 million for the 1,600-MW Cliffside plant modernization program in North Carolina's Cleveland and Rutherford Counties.
1. Gas attack. An artist's rendering of Duke Energy's proposed 795-MW Edwardsport IGCC plant near Vincennes, Ind. The project recently earned the company a tax credit of $133.5 million. Courtesy: Duke Energy
The other four gasification awards went to:
- Tampa Electric's 789-MW IGCC plant in Polk County, Fla. ($133.5 million).
- Mississippi Power Co.'s 700-MW lignite-fueled IGCC project in Kemper County ($133 million).
- Carson Hydrogen Power LLC, for production of hydrogen and 390 MW of generation from it.
- Texas Energy LLC, for a project in Longview to gasify coal for use as chemical feedstock.
Carson Hydrogen Power and Texas Energy refused to allow the government to publicize the value of their credits. The DOE said, "The names of the tax credit recipients are considered confidential taxpayer information," meaning that disclosure is voluntary.
The other advanced coal award winner was E.ON U.S., which, with its subsidiaries Kentucky Utilities Co. and Louisville Gas & Electric Co., came away with a $125 million tax credit. The deduction will help lower the overall cost of building Trimble County 2, a new 750-MW supercritical pulverized coal-fired unit that is targeting 40% efficiency and top-drawer environmental credentials such as 99% SO2 removal and 90% mercury capture.
In a press release, the DOE said, "Advanced coal technologies face cost, integration, and reliability hurdles that must be overcome if they are to be widely deployed. DOE believes deployment incentives, such as tax credits, will accelerate the widespread use of these technologies and assist in driving down their overall cost." The department said the remaining $650 million of tax credits in the program will be awarded later this year.
The awards caused some distress at North Dakota's Basin Electric Power Cooperative, which had applied for a tax credit but didn't get one. Ron Harper, Basin's CEO, said, "We're disappointed that the Department of Energy chose not to certify any sub-bituminous clean coal technology projects. We feel that it is critical that the federal government support the commercialization of IGCC technology." Basin Electric has been working with GE Energy, Bechtel, and others on a future project of that genre. Harper said his generation and transmission cooperative will consider applying again for the second round of largesse.
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