UTILITIES

Costly coal-gasification gamble hits testing phase as doubts persist

This article was updated at 12:26 p.m. EDT.

DEKALB, Miss. -- When it starts up, Kemper will be the first commercial scale carbon-capture project in the United States. But right now, it is a hissing maze of pipes like any large power plant.

The pipes, some wrapped in insulation, wind through the multilevel structure, connecting to various other machines.

This is the building that houses the gasifier for Mississippi Power Co.'s Kemper County energy facility, a power plant that will convert lignite coal to natural gas. The project is in the spotlight for its groundbreaking technology, as well as for scheduling delays and massive cost overruns.

For now, the 2,300 workers on site likely aren't thinking too much about the latter. Major construction at Kemper is finished, and the crews are taking the project through a protracted testing process so it can start producing 582 megawatts of electricity by the end of the first half of 2016.

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"This is not a situation where you just flip a switch and everything comes on," said Lee Youngblood, a Mississippi Power spokesman. "You have to go through all of these systems one by one."

On tap is the initial tuning of the first coal dryer, which takes the percent of water in lignite from 45 percent down to roughly 18 percent. The water will get reused, and the coal moves on to the gasifier, also being pressure tested right now.

For Mississippi Power and its parent, Atlanta-based Southern Co., the gasifier is key. It uses Southern's patented transport integrated gasification (TRIG) technology, something that the company hopes to sell worldwide.

The company has patents on how it puts in the lignite and takes out the coal ash. This particular system also removes acid gas.

The gasifier itself is a looped series of pipes that operates at 650 pounds of pressure. It creates syngas, which is at 1,800 degrees. The syngas is then cooled and makes heat and steam.

Mississippi Power isn't using lignite to test the gasifier. It's using sand instead. Sand can emulate lignite and can determine how efficient the gasification process is. Sand also is inert, so if something goes wrong, nothing will blow up.

"We've hit a bit of a stride recently," said Joe Miller, general manager for startup at Kemper, also called Plant Ratcliffe after a former Southern CEO. "We've had a couple of setbacks, normal start-up issues. We've been addressing that."

Each of the parts of Kemper has worked individually elsewhere -- the gasifier; the chemical refinery that removes carbon dioxide, ammonia and sulfuric acid; the combined-cycle natural gas plant, which actually has been producing electricity at Kemper for more than a year.

The challenge is hooking up all of the systems, along with 31,000 instrumentation points, to make sure they work together. Miller said they are better than 98 percent "checked out" on those 31,000 points.

"There's a lot of pressure on me, there's a lot of pressure on all of us," Miller said. "I've got a great team. It's a matter of time, effort, energy and focus."

He also talks up safety and why that means sometimes they are going to go slower than others would like.

"People talk about some of our schedules, but I can honestly say I have no regrets about how safety is going here," he said.

Miller is "absolutely" confident that Kemper will operate fully when it's time next year. Some of the project's opponents -- which range from environmentalists to public policy analysts to industry veterans -- frequently challenge whether that's actually going to happen.

The company is aware of the criticisms, often bringing up issues raised by Kemper's detractors as if to play "offense."

"There's a lot of people who are against the plant, they say, 'This is something that is an experiment, a science project, we've never done this before,'" Youngblood said. "Well, this is a culmination of a 20-year effort."

How the 'experiment' began

The work behind Kemper's technology started in 1995, Youngblood said. There's a much smaller demonstration project at the National Carbon Capture Center in Alabama. And Kemper had a false start in central Florida as a 285-megawatt facility.

Southern and the Orlando Utilities Commission scrapped the project in 2007 once Florida's then-Gov. Charlie Crist issued a series of environmental regulations, including one that called on utilities to reduce greenhouse gas emissions significantly.

Ironically, Mississippi Power, Southern and other utilities now face the same challenge with U.S. EPA's Clean Power Plan, which requires states to reduce carbon emissions by 2030. EPA relaxed its carbon-capture requirements for coal-fired plants but generally decided to keep a requirement that all new coal plants be equipped with technology to trap, store or reuse carbon emissions (Greenwire, Aug. 4).

EPA has talked up Kemper's technology, which is designed to capture 65 percent of its carbon emissions, but Southern and Mississippi Power officials have stressed that the project cannot be completely replicated everywhere. One example is the abundance of lignite that is next to the power plant, but that may not be the case in other places.

"There are factors that make this a good project, such as the location," Youngblood said. "This could be right for us."

Mississippi Power's headquarters is in Gulfport, near the coast, and the utility serves the southeast portion of the state. Officials say this new power plant is inland in Kemper County because the utility learned a hard lesson having all of its electric generation near the coast during Hurricane Katrina.

The utility's Plant Watson flooded when more than 16 million gallons of water filled the lower levels.

"Planning for the next major storm certainly came into play here," Youngblood said.

That, combined with the lignite in Kemper County, made for a good fit, he said.

Costly delays

Kemper was supposed to start up in May 2014. That was so the company could receive $133 million in federal tax credits. Fifteen percent of the project had been designed at the time the company applied for those tax credits. They had a five-year window for Kemper to become fully operational, a company spokesman said.

The project's once $2 billion price tag has now ballooned to $6.2 billion. With a startup date now two years later, those federal tax credits are gone.

The reasons vary. Cooling fans fell off while testing the coal dryer. Some of the piping wasn't clean. A carbon dioxide absorber fell off a delivery truck that was going just 5 mph. Cold weather. Other bad pieces from a vendor.

"It's on the vendor to fix that," Youngblood said. "I've got a bad piece of material. I've got to work that out, and that takes time."

The delays have weighed on the company in many ways, most of them financially. The Mississippi Public Service Commission last Thursday signed off on the utility collecting $159 million from customers in emergency rate relief because it is on the brink of bankruptcy (EnergyWire, Aug. 14).

The commission will review the combined-cycle natural gas plant and other assets that have been operating in November, which will determine whether the $159 million, or 18 percent rate increase, will be made permanent.

Southern also has written off more than $2 billion.

The company takes a longer view, as Kemper could be producing electricity for at least 40 years. Officials also talk up the worldwide attention as evidenced by the amount of media and others who have visited the plant from China, Japan, South Korea and elsewhere.

"You wouldn't have all of those folks coming right here if something wasn't happening that's significant," Youngblood said.

Twitter: @BizWriterKristi Email: kswartz@eenews.net

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