FPPI to Seek Federal Clean Coal Funding for Pa. IGCC Project

Competition for funding under the Energy Department’s Round 3 Clean Coal Power Initiative (CCPI) heated up on Monday as Future Power PA Inc. (FPPI) announced it had applied for about $610 million for a proposed integrated gasification combined cycle (IGCC) power plant with carbon sequestration in Pennsylvania.

The company, owned mostly by Houston-based coal gasification developer Future Fuels LLC and Canada’s Immersive Media Corp., said that the 270-MW Good Springs IGCC plant could be the first commercial carbon storage project to serve the Northeast.

The power created by this project using local anthracite coal would serve the PJM West electricity market and meet Alternative Energy Portfolio Standards required in Pennsylvania, FPPI said in a statement. “The carbon dioxide would likely be sequestered in locations interconnected by pipelines so future sites and converted incumbent plants may also sequester carbon. The latest engineering and chemistry reports for FPPI indicate the facility will exceed the Energy Policy Act of 2005 (EPACT) standards set for 2020 at start-up.”

The facility would also use “vital gasification technical expertise” from China’s Thermal Power Research Institute (TPRI), a body controlled by China’s largest state-owned utility, Huaneng Power Group. That company is building the GreenGen project, a 250-MW IGCC demonstration plant in Tianjin that has been touted as China’s cleanest and most environmentally friendly coal-fired power plant. It is expected to go online in 2011. 

Duke Energy in August signed an agreement with the Huaneng Group to discuss and share information about cleaner coal technologies. Duke Energy is building a 630-MW IGCC facility in Edwardsport, Ind., which is scheduled to go online in 2012. The company in January also applied for a DOE Clean Coal Power Initiative Round 3 grant, which could potentially offset up to 50% of the costs of the Edwardsport carbon capture plant.

Funding uncertainties remain the most cited reason for cancelations of IGCC power plants. “We believe these projects must be financially viable so private industry can work in tandem with government in a way to make progress without significant burdens on taxpayers and ratepayers,” said Raj Suri, CEO and president of Future Fuels. “Too many projects are not financially viable and thus unsustainable. We would like to do many similar projects in the United States if this first one is successful.”

But competition for the Department of Energy’s $1.4 billion grants under Round 3 of the CCPI program is stiff. Several companies—including NRG Energy, American Electric Power, and Dominion Virginia Power—recently announced they had applied for federal funding to build proposed carbon capture and storage projects.

The third round of the DOE’s CCPI solicitation project was amended this June to include about $800 million made available under the American Recovery and Reinvestment Act, and it extended the closing date from Jan. 20, 2009, to Aug. 24, 2009. The DOE will not disclose how many applications it has received in response to the solicitation, nor has it indicated when it will announce winners, though it has said that federal funds will match half the winning projects’ total costs.

Under the solicitation, the DOE requires that winning carbon capture technologies operate at 50% carbon capture efficiency and make progress toward a target carbon capture efficiency of 90%. Projects must also use domestic mined coal or coal refuse for at least 55% of energy input.

Sources: FPPI, DOE, POWERnews

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