Xcel may build first U.S. plant to store emissions in ground

 

DENVER (Denver Post) - May 13

Xcel Energy could break ground by 2010 on the nation's first power plant that converts coal to gas and captures carbon emissions for underground storage.

In proposing that time frame, Xcel chief executive Dick Kelly said Friday that the utility hasn't decided to proceed with a plant, which would take five years to complete.

Xcel is moving ahead with feasibility studies and negotiations with potential partners, Kelly said.

Two other power plants in the U.S. successfully use coal-gasification technology, but Xcel's proposal would be the first to capture produced carbon and bury it in a process known as sequestration.

"It's a little bit scary being the first one out, so that's why we're going to do a lot of studies on this," Kelly told a group of Colorado business leaders and public officials. "We have to demonstrate to the Public Utilities Commission that the project makes sense for our customers and for us."

Xcel initially proposed a 350-megawatt power plant, enough to serve about 350,000 customers, at an estimated cost of $500 million to $1 billion.

But vendors and consultants have encouraged a plant as large as 600 megawatts to take advantage of economies of scale and higher efficiency. Xcel officials said they don't have a cost estimate for a larger plant.

Xcel spokesman Tom Henley said building a coal gasification plant is about 10 percent to 20 percent more expensive than a conventional coal-fired generator. Carbon collection and burial add another 35-45 percent to the cost, he said.

While gasification and sequestration are viewed by many analysts as state-of-the-art technology to reduce global warming emissions, the process has its critics.

A contingent of Colorado environmentalists are opposed to the new project because they're not sure the technology works, and they say noncarbon power sources such as wind and solar should be used instead.

"I'm concerned that we are putting so much money into a technology that's not proven and extremely expensive," said Nancy LaPlaca, a Denver environmental activist. "I see it as not ready for prime time."

Concerns also exist over legislation passed in 2006 that gives Xcel the ability to bill ratepayers for construction and financing costs before the plant opens and allows the utility to request an exemption from competitive bidding on the facility.

"We should never have a situation with a utility having an open checkbook while going into an unproven technology," said Nick Muller, executive director of the Colorado Independent Energy Association, a consortium of non-utility power-plant developers.

He said the group will challenge what is expected to be Xcel's request to the Public Utilities Commission later this year to build the plant without competitive bids.

Kelly said the gasification plant is one of several initiatives Xcel is using to reduce its environmental impact.

He cited the utility's development of a large solar power plant in the San Luis Valley, initiatives to reduce power consumption through conservation and a pilot project to create clean-burning hydrogen fuel with wind power.

"It's not going to take one technology; it's going to take a lot of them," Kelly said. "But we do believe that technology is the answer."

Staff writer Steve Raabe can be reached at 303-954-1948 or sraabe@denverpost.com.

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