Jan 31 - McClatchy-Tribune Regional News - Jeffrey Tomich St. Louis Post-Dispatch


After years of planning and politicking, two next-generation power plants planned for central Illinois face their respective days of reckoning.

The projects -- FutureGen and Taylorville Energy Center -- aspire to be among the most advanced, cleanest coal-fueled power plants in the world, proving that the nation's vast coal reserves can be put to use while sharply curtailing emissions of heat-trapping gases linked to global warming.

The projects rely on technologies that are more expensive and relatively untested -- a reason why the developer of each is relying heavily on the government. And before either project can advance, developers must clear a final hurdle: cost.

If not the nation's most important clean coal pilot project, FutureGen is at least the most visible.

 Since it was proposed in 2003, the project's ambitions have been scaled back. Many of the utilities that signed on to help build it have since dropped out, some to pursue projects on their own.

Still, the 275-megawatt plant planned for the east-central Illinois town of Mattoon is seen as a significant advance in technology if successfully completed.

FutureGen is a public-private venture that grew out of President George W. Bush's 2003 initiative to develop a near-zero emissions coal-fueled power plant. Ironically, it was the Bush administration that temporarily spiked the project five years.

Only after Barack Obama, an Illinois senator, was elected to the White House was FutureGen revived.

Energy Secretary Stephen Chu is expected to make a final decision in the coming weeks whether to go forward with the project. The Department of Energy last spring agreed to move forward with FutureGen on a contingent basis.

Before FutureGen gets the green light, the federal government's private partners -- a group of coal companies and an electric utility known as the FutureGen Industrial Alliance -- must trim costs, attract more private or foreign government investment and otherwise fill in any remaining funding gaps. Over the weekend, the group enlisted a new member. Illinois Gov. Pat Quinn announced Saturday that Chicago-based power company Exelon Corp. will join the FutureGen alliance.

Spokespeople for the DOE and FutureGen alliance declined to provide details on current talks or exactly when a decision would be announced.

Tiffany Edwards, a DOE spokeswoman, would only say, "the secretary believes in this technology and believes this is something we should invest in."

In fact, FutureGen represents the federal government's flagship clean coal investment, and Obama cited a need for continued investment in clean coal technologies in Wednesday's State of the Union speech.

So far, the DOE has committed $1.07 billion to the project, mostly from last winter's stimulus bill. The FutureGen alliance is expected to contribute $400 million to $600 million over several years.

Cost estimates for FutureGen began at $1 billion in 2003 and reached as high as $2.5 billion five years later. Ultimately, those estimates were proven faulty after a government audit showed the department miscalculated costs in deciding to pull funding for the project.

Lawrence Pacheco, a FutureGen alliance spokesman, said he could not provide an up-to-date cost figure.

Meanwhile, the Taylorville project is estimated at $3.5 billion, including interest expenses, said Bart Ford, vice president of development for Omaha, Neb.-based Tenaska Inc., the project's lead developer.

The idea for the 590-megawatt Taylorville project was proposed more than five years ago. Plans call for the project to capture at least half of the carbon dioxide that's produced. Eventually, the carbon dioxide could be piped to the Gulf Coast and used to enhance oil recovery.

Ford said construction could begin by the end of the year. But first, the state Legislature must sign off on a cost study to be completed next month. Environmental regulators must also extend an air permit.

"It's important that we try to complete this phase of it in this session," he said, noting that the plant could begin operation by the end of 2014 under the current schedule.

Illinois lawmakers get the final say on Taylorville because it passed a bill enabling the plant to be built. The measure requires electric utilities such as Ameren to enter into 30-year contracts to buy power as long as there's not too big of an impact on electricity rates. Without the law, the plant couldn't compete with older coal-fired power plants and other, cheaper forms of electric generation.

The Taylorville project is getting federal help, too, with a $2.6 billion loan guarantee. That makes it easier to sell to lenders and save as much as $60 million in interest costs, Ford said.

Coal-burning utilities in Missouri and elsewhere in the nation have a strong interest in FutureGen and clean coal projects.

"Clearly all of Missouri's utilities are watching with a great deal of interest," said Warren Wood, head of the Missouri Energy Development Association.

Most of the electricity produced in Missouri is fueled by coal, and producers face additional costs if Congress or the Environmental Protection Agency further advance plans to regulate greenhouse gases, he said.

Currently, it would be nearly impossible for a utility to finance a coal plant with carbon sequestration without help from government and state regulators.

"Investing in the alpha or beta version of a technology is a pretty risky proposition," Wood said.

Some environmental groups have derided clean coal technology as a myth. Others say the best way to advance technology allowing for carbon dioxide to be captured and stored, or used for oil projects, is to pass climate legislation.

Even with the looming threat of carbon regulation, power producers currently have no economic reason to deploy newer technology, said George Peridas, a climate scientist for the Natural Resources Defense Counsel. Passage of a climate bill would both compel utilities to shift to alternative energy or ramp up investment in technology.

Meanwhile, small towns hoping to host the projects watch and wait, knowing thousands of construction jobs and hundreds of good-paying plant operations jobs hang in the balance.

In Mattoon, the FutureGen alliance has purchased the 444-acre site. And utility easements have been secured. Local officials are still waiting on a final decision.

Angela Griffin, CEO of the local economic development agency, remains hopeful that the years of work and all of the dollars committed to attracting FutureGen to Mattoon won't go to waste. "There's still an expectation that this is going to happen," she said. "There's been so much invested over these years"...... It would be a shame to walk away from it."

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