DOE weighs greater funding for emissions-free FutureGen plant
New York (Platts)--18Nov2005
The Bush administration is considering increasing the amount of funding the
federal government would provide for its widely touted "zero-emissions"
coal-fired power plant known as FutureGen, according to Dept. of Energy
officials.
The $1-bil project is a cornerstone of President Bush's strategy to cut
greenhouse gas emissions and combat climate change. Since the effort was
announced three years ago, leaders in Canada, Europe and Asia have signed
agreements to pursue similar technologies, which are ultimately aimed at
capturing carbon dioxide and concentrating it into a form that can be easily
piped into the ground or stored elsewhere.
David Berg, a policy analyst with the DOE's Office of Climate Change Policy,
discussed the plans for sharing the cost of FutureGen at a climate seminar
Tuesday at the American University College of Law in Washington. "Initially,
we were talking 50-50, but now it looks like we are going to be covering 75%
of the cost."
John Grasser, a spokesman for the DOE Office of Fossil Energy, told Platts
Thursday that a 75%-25% cost share is one of many options but that "no
decision on the funding formula has been made."
Announced by Bush during his 2002 State of the Union address, the first
FutureGen plant was originally scheduled for construction in 2007. But the
project has been slowed by inadequate funding -- Congress allocated just $18
million of Bush's $237-mil request for the fiscal 2006 budget -- and ongoing
talks with the industry coalition about how to divide up the project's costs.
Grasser said DOE plans to announce a decision on a funding agreement "soon."
The administration will review a list of proposed sites for the plant in 2006
and probably decide on a location by the end of 2007, he added. Completion of
the first FutureGen plant has now been "pushed out to 2012."
Last month, a coalition of power and coal companies called the FutureGen
Alliance incorporated so it could legally enter into a funding arrangement
with DOE. FutureGen Alliance officials did not return calls seeking comment by
press time.
Some of the companies in the coalition have announced major increases in
earnings this year. For example, Peabody Energy's earnings jumped from
86cts/share in the first nine months of 2004 to $1.95/share during the same
period of 2005. Over the same period, CONSOL Energy's earning went from
$1.44/share to $5.33/share.
But Southern Company's earnings dropped from $2.85/share in the first nine
months of 2004 to $1.78/share in the 2005 period. During that same time frame,
American Electric Power's earnings fell from $1.34/share to 99cts/share.
-- Marty Coyne, martin_coyne@platts.com
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