Dec 10 - McClatchy-Tribune Business News Formerly Knight Ridder/Tribune Business News - Erik Robinson The Columbian, Vancouver, Wash.

Interest has cooled slightly in a $1 billion coal gasification plant proposed for Kalama since Washington voters last month required utilities to increase investments in renewable forms of energy such as wind power.

Even so, officials with Energy Northwest said they have more than enough interest from utilities to continue pushing forward with the plant. Brad Peck, spokesman for the consortium of public utilities formerly known as the Washington Public Power Supply System, said the organization still expects to bring the 600-megawatt plant online by 2012.

The renewable energy law actually boosts the need for the coal-gasification plant in Kalama, according to Peck.

"This could very well end up being a positive force for wind development," Peck said.

Wind power is the overwhelming choice for utilities investing in renewable forms of energy, especially on the wide-open country east of the Cascades. Because the wind blows intermittently, regional power managers hope to use the region's abundant network of hydroelectric dams as a flexible backup source of energy when the wind isn't blowing as hard.

But the hydro system can't be jerked around on a whim anymore.

With dam managers constrained by court-imposed requirements to help imperiled juvenile salmon safely migrate to the ocean, Peck said a 600-megawatt power plant would be especially handy close to the Northwest's major population centers on the west side of the Cascades.

Not everybody is so bullish on the plant's prospects, however.

Voters approved Initiative 937, requiring utilities to increase renewable energy sources to 15 percent of their supply by 2020. Cowlitz County Public Utility District, one of 20 members of the Energy Northwest consortium, informed the consortium that it intends to reduce its interest in the Kalama plant in light of the new renewable standard.

"Since most of our growth is going to have to be made up in renewables ... we have stepped back to some degree," said Ned Piper, a commissioner with the PUD.

Marc Krasnowsky, communications director for the NW Energy Coalition, which supported I-937, downplayed Peck's criticism of the variability of wind power.

With each new wind turbine that sprouts up across the Northwest, he said, the overall reliability of the resource will increase.

"If it's not blowing in one area, it will be in another," he said.

There is no disputing that Washington's renewable energy initiative -- along with Oregon Gov. Ted Kulongoski's initiative for an even more aggressive standard -- leaves a big imprint on the market for non-renewable forms of energy, he said.

"I would have to think that 937 puts a serious crimp in the plans of any coal developers siting facilities in the Northwest," Krasnowsky said. "Washington state is roughly half the electric load of the four Northwest states."

Lessons from the past

The plant is the biggest generating plant proposed by Energy Northwest since an ill-fated venture in nuclear energy collapsed in 1983 with the biggest municipal bond default in American history at the time.

Cost overruns and softening energy demand deflated the venture from five nuclear plants to just one, which the consortium continues to operate on the Hanford Nuclear Reservation.

Although Cowlitz has reduced its interest in the Kalama plant because of I-937, Piper said he's convinced the Kalama plant is a solid investment.

"I think Energy Northwest, Bonneville (Power Administration) and all of us learned a whole lot since the WPPSS crisis," Piper said.

Low-cost feedstocks such as petroleum coke and coal would be crushed and mixed with water to form a slurry. High-purity oxygen mixes with the slurry in extremely high temperatures within gasifiers, forming a synthesis gas composed mostly of hydrogen and carbon monoxide.

The gasifiers trap inorganic materials, such as ash and metals, in a sand-like slag that can be used in the construction industry. Sulfur within the gas is recovered and converted into elemental sulfur for sale into agricultural and other markets.

Because it strips out soot and other regulated pollutants, Energy Northwest bills the plant as a clean alternative to conventional coal plants.