Chicago Clean Power Ordinance Threatens Coal Fired Power Shutdown

Chicago’s new Mayor Rahm Emmanuel, 12^th Ward Alderman George Cardenas and 25^th Ward Alderman Danny Solis have given Edison subsidiary Midwest Generation a two week ultimatum to come up with an air pollution reduction plan for the company’s Fisk coal fired power plant in the Pilsen neighborhood on the near west side, and its Crawford coal fired plant in the Little Village neighborhood on the southwest side, or the politicians threaten to push through the proposed Chicago Clean Power Ordinance, which if passed will require closure of both power plants within two years.  Both plants, grandfathered out of the federal Clean Air Act, burn strip mined coal brought into Illinois by rail from Wyoming, and contribute mightily to air pollution in two of Chicago’s predominantly Hispanic neighborhoods.

A deal to shut down the two facilities in exchange for a long term wind power contract between an Edison company and the City of Chicago was scuttled last fall by Illinois House Speaker Mike Madigan, and ongoing negotiations concerning the fate of the plants have apparently stalled.

Another Blow To Illinois Clean Energy

The waning hours of the lame duck Illinois Senate session struck another blow against clean power generation in Illinois as the Illinois Senate defeated by a vote of 33-18 a bill authorizing Tenaska, Inc. to proceed with construction of the proposed $3.5 billion coal gasification/carbon capture and sequestration power plant near Taylorville. Over the last five years the State of Illinois has invested $23 million of the $40 million spent by Tenaska in planning and development expenditures for the proposed project.

Taylorville Mayor Greg Brotherton, who hung around the statehouse during the final vote in the wee hours of Wednesday morning, remains optimistic Tenaska may find other sources of funding to complete construction of the facility, though he expressed exasperation at the workings of the Illinois legislature. “It was a learning experience for me the past five or six weeks, and seeing how the legislature works, it’s just unreal,” Brotherton exclaimed.

Mary L. Renner, Director of the Taylorville/Christian County Economic Development Corporation, said the Energy Center site remains viable for other energy related development even if Tenaska pulls out of the carbon capture/coal gasification project. “To be able to draw this kind of attention says a great deal for the natural resources there,” said Renner.

Opponents of the bill asserted that the legislation would have required Illinois electric utilities to purchase power from the newly built facility at above market prices for the next 30 years in order to recover the state subsidized cost of building and operating the environmentally conscious, greenhouse gas limiting facility. “It would have been damaging to the state’s job-creation climate,” said Philip O’Connor, chairman of the Coalition to Stop Tenaska’s Overpriced Power.

Tenaska vice president Bart Ford said his company is not yet prepared to say it will walk away from its own $40 million dollar investment in the project, despite the Illinois Senate’s resounding defeat of the authorizing legislation. “We are currently evaluating our next course of action,” said Ford. “We believe there is a great deal of support in Illinois for the idea of clean coal power.”

The apparent collapse of this local effort at greenhouse gas control puts Illinois in the company of several European carbon capture and sequestration projects which have faltered due to the unfavorable economic factors involved in bringing carbon capture technology up to commercial scale.

Carbon Capture Takes Another Hit

The Obama administration’s pledge of $1 billion for construction of a major commercial scale power plant carbon capture project in Illinois, dubbed FutureGen 2.0, took another hit today with announcement of the economic failure of yet another in a series of European carbon capture projects subsidized by the European Commission. Illinois’ FutureGen 2.0 is a proposed a network of pipelines to deliver the sequestered carbon dioxide to a repository in Mattoon, where it would be stored underground, along with emissions from other plants in the region should the commercial scale carbon capture technology prove successful.

The 2.0 version of FutureGen is a scaled down version of an earlier, more ambitious project which began as planned construction of a ground up new 275 megawatt clean coal power generation facility in Mattoon, under the Bush administration. When the estimated $950 million price tag for the coal gasification facility more than doubled as construction estimates were finalized, FutureGen was revised to version 2.0 - revamping Ameren Corporation’s 200 megawatt Meredosia coal fired power facility with advanced combustion techniques, a new boiler, and an air separation unit to capture 90% of the carbon dioxide emissions.

The fourth hit in three months to carbon capture construction in the European Union came today with announcement of the financial failure and anticipated bankruptcy sale of Powerfuel plc’s proposed carbon capture facility at its 900 megawatt coal fired Hatfield power plant in South Yorkshire. Netherlands based accounting and consulting firm KPMG has been appointed administrator for the Powerfuel project. According to KPMG’s Richard Fleming, the Hatfield carbon capture development falls $1 billion short of capital investment needed, despite European Commission grants of $275 million in subsidies for the project.

Last October, Germany’s energy giant E.ON announced it was terminating development plans for carbon capture and sequestration on a commercial scale at its billion and a half megawatt coal fired power plant in Kingsnorth, U.K. That news was followed swiftly in November by announcement that both commercial backers bowed out of Finland’s carbon capture project at Meri Pori, and Royal Dutch Shell’s termination of plans for an underground carbon dioxide storage facility at Barendrecht.

Despite Powerfuel’s status as the only UK licensee for commercial scale carbon capture technology trials, and projections by UK’s Department on Energy and Climate Change that that carbon capture and sequestration is one of the cheapest forms of low carbon energy production, KPMG’s Fleming described the reasons for the financial failure of the Hatfield project: “Developing low-carbon energy generation requires a large amount of capital up front, and the CCS development falls $1 billion short of the investment needed to build the plant. … The substantial funding gap has not been addressed in the past 12 months, and accordingly the project has stalled.”

In light of this series of dramatic failures of carbon capture projects overseas, the silence from both Springfield and Washington about the prospects of completion for FutureGen 2.0 is deafening.

Europe’s Failures Jeopardize Illinois Carbon Capture Project

Reversals of fortune as far away as Finland could jeopardize the future of Illinois’ FutureGen 2.0 project, to which the Obama administration pledged $1 billion in stimulus funds as recently as last August. FutureGen 2.0 began as planned construction of a ground up new 275 megawatt clean coal power generation facility in Mattoon, under the Bush administration. When the estimated price tag for the coal gasification plant of $950 million more than doubled as construction estimates were finalized, FutureGen 2.0 was revised to revamping Ameren Corporation’s 200 megawatt Meredosia coal fired power facility with advanced combustion techniques, a new boiler, and an air separation unit to capture 90% of the carbon dioxide emissions.

Babcock & Wilcox and a group of energy companies proposed a network of pipelines to deliver the sequestered carbon dioxide to a repository in Mattoon, where it would be stored underground, along with emissions from other plants in the region should the commercial scale carbon capture technology prove successful. Now, the failure of two proposed European commercial scale carbon capture power plant projects suggests the Meredosia project may never come off the drawing boards.

Finland’s Fortum Oyj and its partner Teollisuuden Voima Oyj have both backed out of a proposed 565 megawatt carbon capture project at Meri Pori, Finland, because they say the project presents too many technological and financial risks. Also this month, Royal Dutch Shell dropped a proposal for piping carbon dioxide emissions from its Rotterdam area Pernis refinery to a proposed underground storage facility beneath the small village of Barendrecht in The Netherlands. Citing three years of delays and “the complete lack of local support,” Dutch Minister of Economic Affairs Maxime Verhagen announced scrapping of the Barendrecht carbon capture and storage facility.

Last month, Germany’s energy giant E.ON announced it was terminating development plans for carbon capture and sequestration on a commercial scale at its billion and a half megawatt coal fired power plant in Kingsnorth, U.K.

The fact that European technology leaders in industry and government in Finland, Germany, England, and The Netherlands are concluding in rapid succession during the design phase that commercial scale carbon capture and sequestration is not economically viable, combined with Illinois’ own experience of projected cost overruns totaling more than 100% on the original version of FutureGen 2.0, could eventually scotch the Meredosia/Mattoon project, despite political support in both Springfield and Washington, D.C.

India Orders From GE

GE Energy has received a three quarter billion dollar order for steam powered generators as well as gas fired turbines to be delivered before March 2012. The equipment will be installed in $2.3 billion expansion of a Reliance Power plant in Andhra Pradesh.

Wind Farm Nuisances

The “clean, green” wind generated electrical power from rapidly rising wind farms across America has brought nuisance lawsuits in Illinois, Massachusetts, Pennsylvania, Texas and Wisconsin, contending that turbine noise and vibration from nearby windmills has driven down the value of neighboring residential property. Whether this is just another example of NIMBY, or whether it will become a growing problem for regulator responsible for locating wind power production facilities remains to be seen.

They Can't Even Agree On What to Call It

President Obama held an hour long meeting with Congressional Democrats Tuesday to discuss the lack of progress of energy and climate change policy legislation through the Henry Waxman's House Energy and Commerce Committee. Variously styled as "clean energy," "global warming" and "climate change" legislation, Obama and Waxman want a bill marked up and out of the Committee to the House floor by Memorial Day, expecting that such a calendar will permit Senate, Conference Committee and final floor action so Obama can sign the bill before the end of this year. Maybe they're all trying to accomplish too much in a single piece of legislation.

Representative John Dingell of Michigan says differences over the "cash for clunkers" provisions of the legislation have been worked out, but he declined to provide details, saving up the chips against possible trade offs on other controversial provisions. Still being fought along regional lines are battles over carbon credit cap and trade provisions, whether the carbon footprint of corn based ethanol fuels must take into consideration rain forest destruction the world over for cropland creation, moves to amend the 2007 renewable fuel mandate of 36 billion gallons by 2022, a 50% emission reduction requirement for biodiesel oil, a 60% emission reduction requirement for cellulosic ethanol fuels, renewable electric power mandates, the potential for investment in "clean coal" technology, and whether nuclear power plants are or are not producing "renewable energy." And, routing of new transmission lines for wind, solar and hydroelectric generated power remains yet another bureaucratic battleground.

Meanwhile, Democrat Congressman Neil Abercrombie of Hawaii, who isn't even on the Energy and Commerce Committee, along with a gaggle of Republican Congressmen, is offering alternative energy policy legislation to permit oil and gas drilling in federal waters as close as 20 miles offshore, with revenue sharing 10% to the U. S. Treasury, 20% to pay for renewable energy development, 10% for clean coal technology, and 2% for low income energy assistance. Other requirements involve federal fleet purchase of hybrid vehicles and other advanced transportation technology initiatives.

So, while our esteemed government delegates duke it out over energy policy, no one is designing or building the new power generation facilities and transmission lines to deliver much needed electric power to the cities, towns and rural areas which need it to avoid another summer of brownouts and blackouts, and skilled electricians sit in line on benches in the union halls waiting for such projects to ramp up.