TCEP In the News
Texas IGCC plant seen moving closer to reality
Electric Power Daily - January 14, 2009
Laura Miller, director of projects-Texas at Poulsbo, Washington-based Summit, said that her company for the past several months has been seeking to secure tax incentives, transmission capacity and financing — among other things — for what Summit now envisions would be a scaled-down, 350- MW version of the 600-MW IGCC project it initially had planned to build.
The project would capture 60% of its carbon-dioxide emissions and use the CO2 for enhanced oilfield recovery. Miller, a former mayor of Dallas, said that while her company at first had been considering two possible sites in Texas for the project, it is now focused “almost exclusively” on the former FutureGen site in the Midland/Odessa area. She added that the smaller size of the project reflects changing market conditions over the past several months.
Summit needs certainly on key issues before it can advance the project, Miller said, including sufficient transmission capacity from the Midland/Odessa area, which like other parts of West Texas currently experiences significant transmission congestion.
She said that her company has asked the Public Utility Commission of Texas to determine that clean-coal projects like that one Summit is planning would be assured priority access to lines that will be developed over the next few years as part of the $4.92 billion, PUC-approved competitive renewable energy zones” transmission lines. Securing transmission capacity is critical if Summit is to sign long-term agreements to sell the project’s electric output, Miller said.
Tax incentives are another piece of the puzzle. Miller said that on Thursday Texas Senator Kel Seliger, a Republican, plans to file a bill to provide a total of up to $300 million in franchise tax credits to the developers of the first three IGCC projects with carbon capture built in the state. Seliger’s bill calls for franchise tax credits of up to $100 million each to be provided to three “clean energy projects,” which the bill defines as coal-fired projects of up to 200 MW each that employ IGCC technology and “are capable of capturing and permanently sequestering in a geological formation at least 60%” of the carbon dioxide generated by the plant. Franchise taxes are based on businesses’ gross receipts. The bill calls for the Bureau of Economic Geology at the University of Texas at Austin to “monitor, measure and verify” the sequestered CO2 for the three projects.
Seliger said that the US has “vast reserves of coal and we should use them. But we can’t use coal without an eye to the environment. Here we have a chance to produce that energy and capture 60% of the CO2 emissions” for use in recovering oil and natural gas that might otherwise remain untapped, “and we should take it.” The senator said that he anticipates that his bill will be “very broadly supported.” Still another element of project development that Summit has been working on is financing, which Miller acknowledged has become more complicated with the nation’s financial crisis. She noted that the incoming Obama administration’s economic stimulus package is expected to include clean-coal funding, “and we will be looking to see how that money is distributed.” Miller, who as Dallas’ mayor helped lead the fight against several pulverized coal-fired projects in Texas, noted, finally, that she is working closely with environmental groups to help ensure that the IGCC project will have their support. Asked how long it might take for all of the pieces of the puzzle to come together, Miller said that “in a perfect world” Summit would be able to begin construction of the project as soon as 2010.
Summit is perhaps best known for developing more than 5,000 MW of natural gas-fired plants The company was cofounded by Donald Hodel, who served as both secretary of energy and secretary of interior in the Reagan administration, and Earl Gjelde, who held the second-highest position in both the Energy and Interior departments. Summit has been working with Siemens on its IGCC plan for the past three years, and Siemens has indicated to Summit that it will provide performance guarantees. The reluctance of IGCC-component manufacturers to provide such guarantees has been viewed as a primary reason for IGCC’s failure to catch on more quickly, as has uncertainty about the degree to which CO2 can be captured and stored. — Housley Carr
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