February 15, 2008

Global Monitor (February 2008)

FutureGen picks Mattoon, Ill.

In mid-December, members of the FutureGen for Illinois taskforce, elected officials, local residents, and Governor Rod R. Blagojevich (D) celebrated the FutureGen Industrial Alliance’s decision to build the first near-zero-emissions coal-fired power plant in their state. Mattoon, a town of 18,000 about 180 miles south of Chicago, in the heart of southern Illinois’ coal belt, was the unanimous choice of the Alliance’s board of directors. It edged out Tuscola, Ill., and the Texas towns of Jewett and Odessa to secure the coveted $1.5 billion project.

 

Announcement of the final site followed more than four years of extensive planning and preparation in Illinois and came nearly five years after President Bush first announced the project (Figure 1). The FutureGen Alliance is a nonprofit organization of utilities and coal companies that is partnering with the Department of Energy to design and build the project.

 

 

FutureGen will take the form of a near-zero-emissions, integrated gasification combined-cycle (IGCC) power plant that will capture 90% of its CO₂ emissions and sequester them in geological formations more than one mile underground. The Mt. Simon Sandstone, as it’s known, is a saline reservoir underlying most of the Illinois Basin that has served as a natural gas reservoir, and scientists expect it will work well to store CO₂ as well. The possibility of on-site injection at Mattoon was likely a key factor in its selection. Alliance officials said the on-site sequestration would both simplify operations and help with public education because visitors to FutureGen could just “step out the back door of the plant” to see where its CO₂ is going.

“We are thrilled that Illinois will be home to FutureGen,” said Gov. Blagojevich at the announcement in the nation’s capital. “This decision represents the culmination of years of hard work and dedication, and we are honored that the FutureGen Alliance and the U.S. Department of Energy have entrusted us with this groundbreaking project. FutureGen’s near zero-emissions coal-gasification technology holds great promise to revolutionize our nation’s coal industry and ensure that coal continues to be an integral part of our energy future while reducing the greenhouse gases that cause climate change. As the entire world watches, Illinois is ready to get to work to ensure that FutureGen is a success.”

The site selection occurred during a period of apparent tension between the Alliance and the DOE, which would like Alliance members to shoulder more of the project’s growing development costs. The DOE included in its FY 2008 research budget request for the Office of Fossil Energy proposed legislative language that would change FutureGen’s current cost-sharing formula. The current formula calls for taxpayers and industry to pay 74% and 26% of the project’s costs, respectively.

In a December 2007 statement, James A. Slutz, the DOE’s acting principal deputy assistant secretary for fossil energy, said, “As [the DOE] has discussed with the FutureGen Alliance for the past several months, projected cost overruns require a reassessment of FutureGen’s design. This will require restructuring FutureGen to maximize the role of private-sector innovation, facilitate the most productive public-private partnership, and prevent further cost escalation.”

When President Bush unveiled the FutureGen proposal in 2003, the DOE estimated the plant would cost $950 million. The estimate has since risen to $1.5 billion, driven by sharp increases in the cost of steel and other essential construction components. Cost inflation also has wreaked havoc on private-sector proposals to build commercial IGCC plants. Michael Mudd, CEO of the FutureGen Alliance, noted that “Sticker shock . . . has been a very difficult hurdle [for private IGCC projects].”

Construction of the FutureGen plant is expected to begin in 2010, with full-scale operations commencing in 2013.

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