GE to invest in coal gasification

GE to invest in coal gasification

GE’s energy finance unit will take a 20 percent stake in a power plant project using coal gasification, a sign that the cleaner-burning technology is attracting the attention of investors with deep pockets.

The 630-megawatt Cash Creek project in Henderson County, Ky., will be one of the largest and most advanced clean coal projects of its kind in the country to use Integrated Gasification Combined Cycle technology, or IGCC, when completed.

“IGCC projects are big projects these days, approaching close to $1 billion in capital, so a lot of people will shy away from them,” said Dan Castagnola, a managing director at GE Energy Financial Services based in Houston. “Hopefully our commitment to the sector will convince others to invest in it as well.”

Terms of the transaction, which is expected to be announced today, were not provided.

Gasification technology has been around for many years, particularly in the chemical industry, said Revis James, director of the Energy Technology Assessment Center at the Electric Power Research Institute, an industry think tank.

Coal gasification power plants are essentially natural-gas-fired turbines with a chemical plant on the front end producing the fuel, said James.

The coal is turned into a synthetic gas, a combination of hydrogen and carbon monoxide. When the synthetic gas is cooled and treated, particulate matter, mercury and sulfur are removed, creating a fuel that can run through natural gas turbines.

While there are still a number of technological hurdles, power plants using coal gasification technology can emit as much as 33 percent less nitrogen oxide, 75 percent less sulfur dioxide and 40 percent less particulate matter than plants using pulverized coal, according to GE. The results can vary based on the kind of coal used, however, and other factors.

‘In a demonstration phase’
Coal gasification technology is just now beginning to be used in major projects capable of providing large amounts of power reliably.

“Today there are a few plants around the world, but there’s not a great deal of experience in the industry operating them,” James said. “It’s much more in a demonstration phase with ongoing research that is regularly improving performance.”

A pulverized coal plant emits about 1,800 pounds of CO2 per megawatt-hour, versus 1,600 pounds of CO2 per megawatt-hour from a coal gasification run plant, James said.

The gasification technology has been attracting greater interest in Texas, and it is figuring in the debate over TXU Power’s plans to build as many as 11 new plants fired by pulverized coal in the state.

This plan has drawn the ire of a number of municipal leaders and environmentalists.

Some have pointed to coal gasification technology as a viable alternative for the new plants, but TXU officials respond that the technology is not developing quickly enough to meet the state’s power needs in the next few years.

Houston-based Tondu Corp. has proposed a 600-megawatt plant using coal gasification for the Corpus Christi area, while two other sites in Texas are on the shortlist for the FutureGen project, a joint government/private sector effort to build a coal plant that captures all of its CO2 output.

Complete environmental impact assessments on the FutureGen sites, including two in Illinois, will be filed in July and a final location picked by year’s end, with construction planned to begin in 2009.

IGCC projects got a boost in December when Congress passed a bill that provides a 20 percent investment tax credit for spending on gasification projects and federal loan guarantees of up to 80 percent of the cost of new gasification equipment at fuel manufacturing facilities.

The Kentucky project, run by Louisville-based ERORA Group, has passed several permitting hurdles and could break ground as early as the end of this year, Castagnola said, with a possible startup as early as 2011.

The location of the Kentucky project was one key to GE’s interest, Castagnola said.

It could sell its power to one of three major power grids in the East and is within six miles of two major interstate gas pipeline connections, allowing an outlet for gas it will produce.

Source: www.chron.com

Share this post