A High-Profile ‘Clean Coal’ Project Staggers, as Trump Seeks to Slash R&D Funds

President Trump has promised to revive the nation's coal industry, but proposed last month to slash funding to programs that might provide it a lifeline.

Mississippi Power’s Kemper power plant is designed to allow the continued use of cheap but dirty fuels like coal in an era when the world — most of it, anyway — is trying to reduce its emissions of planet-warming CO2 and other gases. But the project has been plagued with technical problems that have pushed it back three years and more than doubled its budget, now estimated at about $7.5 billion.

The plant started limited operations last fall, but the company announced this week that it would be pushing back the date it expects to be fully online until the end of June.

And in the proposed budget it released last month, the Trump administration called for slashing research on capturing carbon dioxide from fossil fuel combustion and producing cleaner coal technologies. If approved by Congress, the proposal would cut the Department of Energy’s fossil fuel research and development by 56 percent and “clean coal” research by nearly 70 percent.

Coming from an administration that came to power promising to bring back coal jobs, the budget was “shocking,” said David Schlissel, who directs resource planning analysis at the Cleveland-based Institute for Energy Economics and Financial Analysis. Finding ways to reduce the black rock’s carbon output “is the only way of giving coal any kind of chance of being a long-term fuel source,” he said.

“Given that,” he added, “I don’t see much chance of carbon capture really being an economically viable alternative on any kind of scale in the US.”

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Despite slumping demand and the fracking-driven boom in cheap natural gas, coal still produces about a third of US electric power — and about two-thirds of that industry’s carbon emissions. American taxpayers have spent about $7 billion on carbon capture and storage technology since 2008, including more than $3 billion from the Obama administration’s economic stimulus bill. The Trump administration says it will shift its spending toward improving early-stage technology that the private sector could then adopt.

But Schlissel said Kemper’s technical and financial challenges are likely to scare off private industry — especially while gas remains cheap.

“Private industry doesn’t want to bear the risk of the projects if they fail, or like Kemper, they cost a whole lot more than they originally thought,” said Schlissel, a critic of the Mississippi project.

Ratepayers are on the hook for about $2.9 billion and have already seen a 15 percent hike in their power bills.

The 582-megawatt Kemper plant is designed to extract a cleaner-burning synthetic gas from lignite, a cheap, locally mined coal. The fuel is heated to temperatures up to 1,000 degrees Celsius (1,800 degrees Fahrenheit) under high pressure to release gas. Solvents and limestone are added to capture carbon dioxide, sulfur compounds, and mercury, while coal ash gets filtered out. The gas then gets burned to produce steam, which spins a turbine that drives the electrical generator.

The process is designed to capture up to two-thirds of the carbon dioxide emissions of a normal coal-fired power plant. The captured CO2 is shipped to oil fields and pumped underground to help bring up hard-to-reach petroleum deposits. Mississippi Power tentatively started running generators on the process last fall, but started running into trouble because of a buildup of coal ash.

In a filing with stock regulators this week, corporate parent Southern Company told investors it will need to redesign and replace a key piece of gear at Kemper in part because of those coal ash issues. That process is likely to take up to two years and cost another $164 million, though the company says it will get the plant up and running while the engineering work proceeds. Ratepayers are on the hook for about $2.9 billion of the cost and have already seen a 15 percent hike in their power bills.

Schlissel said the company launched the project using technology that hadn’t been tested at industrial scale and ignored the risks.

“The history has been that those technologies have more problems than you expect, cost a lot more than you expect, to build take a lot longer to build and then have startup problems. That’s been the history of just about any technology,” he said.

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Mississippi Power representatives didn’t respond to requests for comment. In a statement announcing the latest delay, it said the plant “has primarily been using natural gas as fuel, but has also been using syngas from the project's gasifiers during testing and operation at periods throughout the year.”

Since Southern also is struggling to complete a nuclear power project in Georgia that’s years late and billions over budget, some stock analysts have suggested the Atlanta-based utility conglomerate would be better off to just keep burning natural gas at Kemper.

Two other power plants in North America — one in Saskatchewan and one in Texas — are recapturing CO2 emissions through a different process, from smokestack emissions, said Jeff Erikson, Americas general manager for the Global CCS Institute. With the United States moving away from building coal-fired power plants, the prospect of new carbon capture projects in that field is dim, Erikson said.

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There’s more hope for the technology in the industry overseas and in other industries, he said. A steel plant in the United Arab Emirates has begun capturing about 800,000 tons of CO2 a year from its stacks. And while Kemper has struggled, China and India are still planning new coal-fueled power plants that could incorporate CCS more easily in construction than tacking the process onto an existing plant.

“What that does is create an opportunity for American companies, as they get experience with both the capture and storage processes, to export that overseas,” said Erikson, whose organization promotes carbon capture R&D. And cutting federal support for those projects would be unwise and isn’t likely to make it through Congress.

“We think that continued investment in both basic research and in commercialization of existing early-stage technologies are both critical,” he said. “If you sacrifice one for the other, you’re either extending out that next generation of applications or your sacrificing that third- or fourth-generation breakthrough opportunity down the road.”

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