Release Date: July 26, 2004

WASHINGTON, DC - The Department of Energy (DOE) today announced it has received proposals for projects in a new generation of clean coal projects, valued at nearly $6 billion, in the latest phase of the President's Clean Coal Power Initiative (CCPI).

"Industry has enthusiastically responded to the Department's latest clean coal solicitation calling for technologies that would help make it possible for coal to remain a cornerstone of our domestic energy portfolio, particularly for power generation, and to continue that role into the long-term future," Secretary of Energy Spencer Abraham said today. "We are pleased these latest proposals encompass an advanced generation of technologies that will help us meet national priorities set forth by President Bush in his Clear Skies and Global Climate Change objectives."

The Round 2 proposals represent the second wave of technologies offered by industry in response to President Bush's pledge to invest up to $2 billion in federal funding over 10 years to advance technologies that can help meet the nation's growing demand for electricity while simultaneously providing a secure and low-cost energy source and protecting the environment. In January 2003, eight projects were selected in Round One, the initial phase of the CCPI.

These newest proposals request about $1 billion in federal cost sharing for projects. Those eventually selected will demonstrate: (1) coal gasification system advances that enhance efficiency, environmental performance and reliability, and (2) advancements that support the President's Clear Skies Initiative to reduce power plant emissions, particularly mercury, by about 70 percent by 2018, and the Global Climate Change Initiative to reduce carbon emissions growth over the next ten years.

The projects will also support the technical foundation for the FutureGen Initiative to create the world's first zero-emissions, coal-based power and hydrogen production plant, which will include carbon dioxide removal and sequestration.

Ninety-seven percent of the value of the proposals offer advancements for power generation based on commercial demonstrations of gasification technology and improvements to efficiency, reliability, availability, environmental performance, and economic performance. These proposals also present opportunities to demonstrate potential readiness of energy technologies for carbon dioxide management.

Other proposals offer approaches for mercury and multi-pollutant control and for efficiency improvements that encompass coal treatment methods and post-combustion technologies, as well as integrated combustion and control system advancements applicable to needs of the existing fleet and future energy plants. These environmental technologies have potential applicability to diverse sizes of coal combustion operations.

DOE will review each proposal received under the CCPI Round 2 solicitation against criteria established in the solicitation as prerequisites for detailed evaluation. Those prerequisites include the proposer's plan to share at least 50 percent of the total allowable cost of the proposed project, commitment to repayment of the government's investment in the demonstration project, and other aspects of the proposed project, including project site, coal use, and electricity production. Qualifying proposals will be subject to detailed evaluation, and DOE anticipates announcement of selections by the end of 2004.

The public abstracts for the CCPI Round 2 proposers are listed below.

• Alaska Cowboy Coal Power Consortium, in a teaming arrangement with Fuels Management, Inc., and KAPP, LLC, proposes to build and operate a commercial plant in Anchorage, Alaska, for innovative low-temperature drying of low rank coal typically containing 20 to 30 percent water, to generate a coal product for marketing and use in an existing, re-powered coal-fired power plant. The proposed technology, if successful, could be applied to high moisture content coals of the Beluga coal field in Alaska and low-rank coals currently produced in the western United States. The upgraded coal produced by the drying process would result in reduced costs for transportation and shipping coal to utility and other markets, and use of the dried coal would avoid reductions in combustion and boiler efficiency that normally result from its use. Smaller-scale tests of the low-temperature drying technology were reported to show significant removal of mercury; coal produced by the drying technology would be extensively tested in the re-powered power plant to quantify the effects on environmental emissions, boiler efficiency, reliability, and utility plant operations. The applicant requested $16.56 million, or nearly 45 percent of the total estimated cost of $37.4 million, to support the project.
• Basin Electric Power Cooperative requested $140 million (18.5 percent of the total cost) to support a $756.2 million project for repowering the 615 megawatt Leland Olds Unit 2 boiler in Stanton, ND, with the world's first Hybrid Gasification Combined Cycle plant. The Hybrid Gasification system would use a pressurized gasifier to produce syngas from lignite for combustion in a gas turbine combined cycle coupled with an atmospheric-pressure circulating fluidized bed boiler to burn unconverted carbon in char and ash residue from the gasifier to produce steam for use in a steam turbine, while recovering exhaust heat from the gas turbine. The proposed system would reduce the quantity of coal needed to generate each kilowatt of electricity and result in an efficient and exceptionally clean coal-fueled combined cycle. The Hybrid Gasification system could reduce the cost of gasification technology through use of lower temperatures and less severe gasifier design requirements, thus resulting in both higher component reliability and lower capital cost. The proposed system potentially offers a new way of making electricity focused on low rank and sub-bituminous coals that would be superior for both repowering existing units and new lignite-burning units.
• Breen Energy Solutions proposed a $27 million project for commercial demonstration of Near-Zero Multi-Pollutant Emissions Technology for Simultaneous NOx, CO and Mercury Reduction. The proposed project would integrate coal/biomass slurry utilization and reburn technologies for NOx reduction, mercury oxidation through flue gas temperature control, low temperature NOx and CO reduction, mercury chloride formation and stabilization, and dry mercury adsorption for mercury retention into a multi-pollutant control system that would be applicable to new and existing plants. The proposal addresses DOE performance targets for mercury removal and nitrogen oxide emissions by seeking to demonstrate an integrated system to achieve 90 percent mercury removal, NOx emissions of 0.05 lb/MMBtu, and attainment of near-zero CO emissions. The proposed technologies would demonstrate a unique capability to simultaneously deliver near-zero emissions at a considerably lower cost than commercial technologies. DOE was requested to provide $13 million (50 percent cost-share) to support the proposed project.
• ClearStack Combustion Corporation, with a team including Ameren Energy Generating (AEG) Company, the Illinois Department of Commerce, and the Electric Power Research Institute, proposes to retrofit AEG's 80 megawatt Hutsonville power generation Unit #4 (Boiler #6) in Hutsonville, IL, with advanced technology to demonstrate multi-pollutant reduction at a cost lower than currently available technologies. In a proposed $13.1 million project, including $6.56 (50 percent) from DOE and $5 million from the State of Illinois, ClearStack Combustion Corporation would demonstrate the commercial potential of a three-stage pulverized coal molten slag bath gasification/combustion technique (the patented Ashworth Combustor™) that reduces the major air pollutants (nitrogen oxides, sulfur dioxide, mercury, other metal air toxics and particulate) associated with coal combustion. This project would potentially provide the electric utility industry with a low cost solution to reduce emissions of multiple pollutants from smaller coal-fired units (200 MWe and less).
• EnviRes LLC proposed a radically different and potentially lower cost approach to coal gasification that would be commercially demonstrated in a new gasification plant to be constructed in East St. Louis, Illinois. The proposed plant would use EnviRes Gasification Technology to gasify 1,039 tons per day of Illinois #6 coal for producing separate hydrogen-rich and carbon monoxide-rich streams. The carbon monoxide stream would be used as fuel for a combustion turbine in a combined cycle generating system producing 113 megawatts of electrical power, and the hydrogen would be available for use in fuel cells for both stationary power generation and powering personal transportation vehicles. EnviRes proposed a total cost of $254.2 million for the project, with 50 percent (or $127.1 million) of the cost to be provided by DOE.
• Excelsior Energy Inc., in a team effort with ConocoPhillips, requests $150 million in DOE funds for partial support of a $1.185 billion project to construct and operate the 531 megawatt Mesaba Energy Project in Hoyt Lakes, Minnesota. DOE's contribution of nearly 13 percent of the funds would be used to demonstrate next generation Integrated Gasification Combined Cycle power plants, which would build upon performance of the Wabash River Coal Gasification Repowering Project in Terre Haute, Indiana, which was constructed under the Department of Energy's Clean Coal Technology Program and has been operating since 1995. The Mesaba Project would apply approaches identified for upgrading performance of Wabash Plant technology and lessons learned from operations at Wabash. Excelsior expects the Mesaba Project to achieve 15 percent improvement in gasification plant availability and improved thermal efficiency at lower installed costs. Excelsior also forecasts that the performance, efficiency, and emission improvements to be demonstrated through the Mesaba Project would make the proposed plant the cleanest coal fueled power plant in the world.
• FuelCell Energy, Inc., proposes to design, build and test a 14 megawatt Direct FuelCell®/Turbine Hybrid Power Plant operating on coal-derived gas. In a team effort with Eastman Chemical Company and Solar Turbines, Inc., FuelCell Energy would integrate a Direct FuelCell®/Turbine Hybrid Power Plant system into an existing coal gasification facility operated by Eastman Chemical Company at Kingsport, Tennessee. The coal gasifier supporting the demonstration project would be operated in an oxygen-blown mode. FuelCell Energy projects that the combined technologies could result in electricity generation from coal on a commercial scale (e.g., 200 megawatt plant) at an efficiency approaching 60 percent (HHV basis) with over 90 percent CO2 separation from the coal gas and very low emissions. This efficiency level is projected by FuelCell Energy to be 14-16 points higher than the efficiency achievable with an integrated gasification combined cycle power plant alone. DOE was requested to provide 50 percent of the funds (about $26.64 million) to support this $53.28 million project.
• Medicine Bow Fuel & Power LLC proposes to develop, finance, construct, and operate the Medicine Bow Energy Project, a mine-mouth coal gasification and liquefaction facility that would demonstrate integration of technologies for producing 1000 megawatts of electric power and 26,200 barrels per day of ultra-clean diesel fuel and naphtha using an estimated 6 million tons of coal per year. The facility would be located at a site near Medicine Bow, Wyoming. The proposed plant would recover virtually all of the carbon dioxide produced for eventual marketing by third parties as an aid for enhanced oil recovery, where the carbon dioxide could also be effectively sequestered. Diesel fuel produced by the facility would contain sulfur levels below EPA's sulfur specification for diesel fuel, beginning in 2006. Electric power would be produced by gas turbines in combined cycle mode from the synthetic gas and liquefaction process gases. Coal for the project would be mined from reserves located adjacent to the facility, for which initial permitting and a federal draft environmental impact statement have been completed. The Medicine Bow Energy Project would be the first commercial scale plant in the U.S. to produce electric power and coal liquids at competitive prices. The total estimated cost of the project is $2.759 billion, of which $200 million (or just over 7 percent of the total cost) has been requested from DOE.
• Minnesota Power has requested $50 million in DOE funds to support a $120 million project for demonstrating the commercial viability of an industrial-scale fuel gas production and integrated gasification combined cycle cogeneration facility to be constructed in St. Louis County, Minnesota. The gasification system would convert sub-bituminous Powder River Basin coal to synthetic gas for two uses – as a low-cost replacement fuel for natural gas currently used as a source of heat in taconite processing and as a fuel source for a combined cycle combustion turbine to provide 60 megawatts of electricity. In addition, efficiency improvements would be integrated into the gasification/cogeneration system to recover low-grade waste heat for use in improving taconite grinding efficiency and thereby lowering electrical energy usage.
• NeuCo, Inc., proposes to demonstrate coal-fired utility plant process controls that address combustion, boiler, and post-combustion emissions control facilities as an integrated system for significantly enhancing multi-pollutant and mercury emissions environmental control for existing and new plants. NeuCo is requesting about $6.3 million as part of a $12.6 million project to (1) add closed-loop optimization modules for flue gas desulfurization systems and electrostatic precipitators; (2) optimize these and other combustion and post-combustion systems as a single integrated system for currently regulated emissions and mercury removal; and (3) demonstrate performance of process control products that maximize reliability and availability. The proposed project at the Baldwin Energy Complex in Baldwin, Illinois, would demonstrate use of advanced data validation and optimization techniques and mathematical modeling for individual closed-loop sub-systems and for the interdependencies of those sub-systems, which would enhance overall plant performance for achieving aggressive sulfur dioxide, nitrogen oxide, mercury, and particulate matter emissions reduction goals.
• Peabody Energy, the world's largest coal company, in a team with Airborne Clean Energy, Veolia Water North America, and Icon Construction, proposes a commercial-scale demonstration of the Airborne Process scrubber, regeneration system, and fertilizer production systems at the Mustang Energy Company, LLC's 300 megawatt coal-fired Mustang Generating Station in Milan, New Mexico. This $78.864 million project, for which Peabody is requesting $19.5 million (or nearly 25 percent of the total cost estimated cost), would target an innovative and cost-competitive multi-pollutant control process for achieving 99.5 percent removal of sulfur dioxide (SO2), 98 percent removal of SO3 (sulfuric acid mist precursor), 98 percent removal of nitrogen oxides (NOx), and 90 percent total system removal of mercury from plant emissions, while turning the byproducts into a high-quality high-value granular fertilizer. The Peabody team has established aggressive technology objectives for (1) demonstrating commercial applicability of the Airborne Process to the existing coal-fired fleet as well as to new plants and (2) demonstrating an availability of 96 percent or better for the Airborne process during the first year of operation.
• Pegasus Technologies, Inc., in a joint effort with Texas Genco, proposes to demonstrate the ability to affect and optimize mercury speciation and multi-pollutant control on an existing 890 megawatt utility boiler at Jewett, Texas, using non-intrusive advanced sensor and optimization technologies. This demonstration of plant-wide advanced control and optimization systems could potentially minimize emissions while maximizing the efficiency of the plant as an electricity producer. Pegasus would apply advanced solutions using state of the art sensors and neural network based optimization and control technologies to maximize the oxidation or capture of mercury vapor in the boiler flue gas. Artificial intelligence and simulation technologies would be used to control and optimize all the major facets of a power plant using a blend of Texas lignite and Powder River Basin sub-bituminous coal, a cold-side Electrostatic Precipitator rated at approximately 99.8 percent particulate removal efficiency, and a wet limestone Flue Gas Desulfurization system rated at approximately 90 percent SO2 removal efficiency. Both of the devices would potentially be capable of removing mercury from the unit's flue gas. Pegasus has requested $6.08 million in DOE funds to conduct this $12.16 million project.
• Southern Company Services, in a team effort with Southern Power Company, Orlando Utilities Commission, and Kellogg Brown and Root, proposes to construct and demonstrate operation of a 285 megawatt coal-based transport gasifier plant in Orange County, Florida. The proposed plant would gasify sub-bituminous coal, use state-of the-art emission controls, and be expected to provide one of the cleanest, most efficient coal-fired power plants in the world. Southern Company plans to demonstrate use of an air-blown integrated gasification combined cycle power plant based on the transport gasifier, which employs Kellogg Brown and Root's catalytic cracking technology that has been used successfully for over 50 years in the petroleum refining industry. Southern Company estimated the total cost for the project at $557 million and has requested $235 million of DOE funds to support the project.