The DOE’s tax credit scheme for IGCC (coal gasification) is slowing down the IGCC rush. Color me confused, because even if it’s a suprise to me, it seems it should not be a suprise on the part of project proposers… what am I missing here, wouldn’t they know about the tax credit coal standards? What is the impact on the Mesaba coal gasification project? Had Excelsior wanted this tax credit? Well, duh, I doubt a tax credit exists that they wouldn’t want! Is there an impact on the ability of this Mesaba project to use PRB coal? Given that Mesaba is, in part, a DOE demonstration project to show that PRB coal can be used, demonstrate fuel flexibility, what is the impact on the viability of the project? Inquiring minds want to know…

Here’s another project hit by the tax credit, or lack thereof:

South Dakota coal-gas plant on hold after not getting a tax credit

Cleaner coal technology hit a speed bump Tuesday in South Dakota, as a major power supplier announced it did not receive a key federal tax credit.

By Ben Shouse –

Cleaner coal technology hit a speed bump Tuesday in South Dakota, as a major power supplier announced it did not receive a key federal tax credit.

Basin Electric Power Cooperative had proposed a plant near Huron or Mobridge to use integrated gasification combined cycle, or IGCC.

The technology converts coal to a gas before burning, which greatly reduces air pollution and could some day allow the capture of carbon dioxide, the gas most responsible for global warming.

But the project might not be economical without a federal tax credit, said spokesman Daryl Hill in Bismarck, N.D.

“That doesn’t mean we’re abandoning work on that, but you’re right, it does slow that timetable of working with IGCC,” Hill said.

Basin sells electricity to rural cooperatives in South Dakota and eight other states. Hill said Basin will decide on a site and a technology in 2007.

A major obstacle to building an IGCC plant in South Dakota is the type of coal it would use. The best source is the Powder River Basin in Wyoming.

The 2005 energy bill, which created the coal tax credit, required plants to reduce sulfur dioxide emissions by 99 percent. But Powder River coal is already low in sulfur. Energy Secretary Samuel Bodman acknowledged that when he announced the credit recipients Thursday and said he is working to resolve it.

Seven power companies are planning to build a separate coal plant near Milbank, to be called Big Stone II. Ward Uggerud, vice president of Otter Tail Power Co., said the failure of Basin’s tax credit application vindicates the decision to use conventional coal.

“What this underscores is that IGCC is not necessarily there yet for people to proceed with on a commercial application,” he said.

Reach Ben Shouse at 331-2318.

And in todays New York Times, a note of reason about the IGCC rush — “it may not be the appropriate generation choice for every situation.” Will someone tell those “environmental” groups that are pushing IGCC this simple truth? Will this point get through to the RE-AMP folks funded to promote IGCC who are conspiring today in Chaska?

Curbing Coal Emissions

To the Editor:

â??Taming King Coalâ? (editorial, Nov. 25), about addressing emissions of carbon dioxide from coal-based electric power generation, appropriately underscores the importance of assuring that we have the technology to do it. But your predilection toward just one promising technology, integrated gasification combined cycle, or I.G.C.C., is problematic.

I.G.C.C. holds tremendous promise and is one technology that utilities will use to address carbon dioxide. But it isnâ??t the only one, and it may not be the best choice in every case.

While I.G.C.C. can produce electricity more efficiently than traditional coal plants, there are only four I.G.C.C. plants in operation worldwide (two in the United States), and the technology so far performs well only with certain types of coal.

Alternative pulverized coal technologies like â??ultra supercriticalâ? and â??supercriticalâ? are also more efficient than traditional coal plants and can make use of all coal varieties.

With respect to greenhouse gas emissions, both I.G.C.C. and pulverized coal plants will someday be able to accommodate some form of carbon-capture technology.

I.G.C.C. holds potential for easier integration of these technologies, but may not be the appropriate generation choice for every situation.

Thomas R. Kuhn
Pres., Edison Electric Institute

4 Responses to “Impact of no IGCC tax credit for PRB”

  1. Legalectric » Blog Archive » Sen. Coleman finds more pork for Excelsior Says:

    […] More about the tax credit and PRB […]

  2. Mark Says:

    Please support The NRG IGCC Project
    Tonawanda, NY

  3. Carol A. Overland Says:

    Come on, Mark — you work for NRG… does Steve Corneli know you sent this?

  4. Tom Says:

    Merry Chritmas Carol
    Give the guy a break,people in Western NY are ready to turn out the lights. That project is just what they need.

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