This week The Institute for Energy Economics and Financial Analysis (IEEFA) published aÂ reportÂ describing howÂ coal-to-gasification technology for electricity-generation purposes remains commercially unviable.
The reportâ€”â€œUsingÂ CoalÂ Gasification to Generate Electricity: A Multibillion-Dollar Failureâ€â€”concludes that two long-running marquee American Integrated Gasification Combined Cycle (IGCC), projects, Duke Energyâ€™s Edwardsport plant in Indiana and Southern Companyâ€™s Kemper plant in Mississippi, prove the case against such investments.
â€œEfforts to gasifyÂ coalÂ for power generation have been major failures, technologically and financially,â€ writes David Schlissel, the author of the report and IEEFAâ€™s director of Resource Planning Analysis. â€œBoth Kemper and Edwardsport have been economic disasters for consumers and investors alike, and a number of important and painful lessons have emerged from Kemper and Edwardsport.â€
The report concludes further thatÂ coal-gasification technology is an especially poor bet today given the declining costs of solar and wind resources and the expectation that natural gas prices will remain low for the foreseeable future.
AMONG THE REPORTâ€™S FINDINGS:
- Modern IGCC plants are far more expensive to build than proponents have been willing to publicly acknowledge.
- Such plants take much longer to construct than proponents typically assert.
- The sheer expense of operating an IGCC plant prevents makes them wholly uncompetitive.
- IGCC plants have proven unreliable due to problems with modernÂ coal-gasification technology.
- The technology is not an economically feasible option for capturing and sequestering carbon dioxide emissions.
- IGCC plants cannot compete with wholesale market power prices or with falling prices for wind- and solar-generated electricity.
Schlissel noted that only two of the 25Â coal-gasification electricity generating plants proposed in the U.S. since 2000 have ever come on line (Kemper and Edwardsport), and that Kemper, under pressure from utility regulators in Mississippi has abandoned its original mission of burningÂ coalÂ for electrification and is not a natural-gas plant.
â€œThat leaves Edwardsport as the sole remaining plant built in the U.S. in the last decade burning gasifiedÂ coalÂ to produce power.â€
â€œIt is the only modern plant built around â€˜cleanÂ coalâ€™ gasification technology that continues to be promoted as a viable way to generate electricity but in fact is not. Edwardsport has been plagued by technological problems, and four years after opening is still not running properly. Because of its operational problems and its huge construction cost overruns, Edwardsportâ€™s electricity is wildly expensive. Power from the plant costs more than five times what electricity sells for in wholesale energy markets in Indiana.â€
â€œSome in the electric utility andÂ coalÂ industries continue to push for newÂ coal-gasification projects, even though natural gas plants are much less expensive to build and are more reliable, and wind- and solar-generated electricity is cheaper,â€ Schlissel said.