U.S. and China Push Forward with Cleaner Coal Projects, Amid Setbacks

In his January State of the Union speech, President Barack Obama called on Congress to pass legislation that would allow the U.S. to source 80% of its electricity from “clean energy” sources by 2035—including traditional renewable sources like wind and solar as well as nuclear and “clean coal.” That broadened definition of “clean energy” was designed to inspire bipartisan interest, as was widely reported. But, as was also widely pointed out, the speech followed a visit to Washington from Chinese government officials and a series of key agreements aimed at increasing “clean energy” cooperation between the two countries.

Among those agreements was a Jan. 18 deal to advance the U.S.-China Clean Energy Research Center. Signed by Energy Secretary Steven Chu, China’s Energy Minister Zhang Guobao, and China’s Science and Technology Minister Wan Gang, it essentially allows the countries to cultivate a public-private partnership. The program will receive $150 million from research groups in both countries that are seeking to advance technologies ranging from energy efficiency and electric vehicles to advanced coal technologies, including carbon capture and storage. Like the U.S., China relies on coal power to sustain its economy. It has also set lofty goals, pledging to slash the carbon intensity of its gross domestic product by 40% to 45% (based on 2005 levels) by 2020.

China is reportedly making headway on several advanced coal projects, whereas those in the U.S., though progressing, are experiencing setbacks from funding issues and legal challenges.

At the beginning of this year, China planned to begin its first commercial carbon capture and storage plant. That project, built by Shenhua Group (China’s top coal producer) in Ordos City on the steppes of northern China’s Inner Mongolia Autonomous Region, is expected to capture 100,000 metric tons of carbon dioxide (CO2) annually (about equal to the annual CO2 emissions of a 10-MW coal-fired plant). The company is planning a second facility that will be capable of handling 1 million metric tons of CO2 a year—and this could be followed by a third that could handle 3 million metric tons.

Reports also suggest that 2,100 workers are busy at China’s $1 billion 250-MW GreenGen integrated gasification combined cycle (IGCC) project, which began construction in June 2009. The consortium of companies financing the project—including state-owned enterprises and Peabody Coal—expects the plant could begin operation this year.

In the U.S., government investment in FutureGen 2.0—which entails adding an oxy-combustion boiler to an existing 200-MW unit at the Ameren plant in Meredosia, Ill.—has surpassed $1 billion, but project developers are still seeking a county that will host a CO2 sequestration facility. (For details, see “Oxy-Combustion: A Promising Technology for Coal-Fired Plants” in the Jan. 2011 issue of POWER or online at https://www.powermag.com.) Work on private IGCC projects is also under way in Texas, Pennsylvania, and Indiana.

In January, an Illinois Senate vote against authorizing construction of Tenaska’s Taylorville Energy Center put that project’s future in peril. Tenaska and other backers of the 602-MW IGCC facility declined to say whether they would continue fighting for the facility. It was challenged by opponents that included industrial groups and Exelon Corp., which had argued that the $3.5 billion plant would impose high power costs on ratepayers. The Department of Energy initially awarded a $2.579 billion federal loan guarantee to the project, which was followed by a $417 million tax credit, the largest ever allotted to a single project.

Meanwhile, Duke Energy Indiana’s 630-MW Edwardsport IGCC plant, under construction (Figure 1) in Knox County, has been plagued by disputes over cost overruns. The company and regulators last year failed to reach a settlement agreement capping recoverable costs for the facility at $2.987 billion after a former Indiana Utility Regulatory Commission official presiding over the case was embroiled in an ethics scandal involving the company. As of October 2010, the total project—factoring in aspects such as engineering, construction, and purchasing—was more than 70% complete. It is scheduled to be operating in 2012.

1. At a standstill. Last year, an ethics scandal brought negotiations to a standstill in a settlement agreement between Duke Energy Indiana and regulators to cap recoverable costs of the Edwardsport integrated gasification combined cycle facility at $2.987 billion. The 630-MW plant was more than 70% complete and is scheduled to be operating in 2012. This image shows the project under construction in October 2010. Courtesy: Duke Energy

The U.S. saw a much-watched coal unit begin operation early this year, however: The second 615-MW supercritical pulverized coal unit of We Energies’ Oak Creek Power Plant went commercial on Jan. 12. The first unit—a POWER Top Plant—went into service on Feb. 2, 2010. Elm Road Unit 2’s turnover to the Wisconsin Electric Power Co. by general contractor Bechtel Power Corp. completed the controversial expansion of the 1,135-MW power plant.

–Sonal Patel is POWER’s senior writer.