Xcel earmarks $3.5M toward coal plant
The Denver Business Journal - 12:01 PM MDT Tuesday
by Cathy Proctor
Denver Business Journal
milwaukee.bizjournals.com
Xcel Energy Inc., Colorado's largest utility, said Tuesday it will build a new, cutting-edge "clean coal" power plant in the state.
Minneapolis-based Xcel (NYSE: XEL) said it will spend $3.5 million toward the development of an "Integrated Gasification Combined Cycle" -- a.k.a. IGCC -- power plant in Colorado. The utility also said it will file a formal application with state regulators, seeking their approval for construction of the plant and the ability to pass the cost along to Xcel customers, in late 2007. The utility serves about 1.3 million customers in Colorado.
Xcel said it is planning to build the IGCC plant capable of generating 300 to 350 megawatts of power, which is enough to supply up to 350,000 homes in Colorado. The plant is expected to cost at least $500 million, based on current dollars, the company said.
"We believe the development and commercial operation of clean-coal technology is needed in Colorado and throughout our nation," Richard Kelly, Xcel's president, chairman and CEO, said in a statement. "We want to lead the effort to demonstrate that this technology works using western coal at high altitude."
If approved by state regulators, construction would begin after 2009. Xcel said it also wants other partners on board to spread the financial risk.
An IGCC power plant turns hard rock coal into a gas and then burns the gas to generate steam. The steam spins turbines to generate electricity.
Such a plant allows emissions such as carbon dioxide, mercury and other things to be concentrated on the front end of the process and stripped out of the steam -- reducing emissions into the air -- before it flows into the turbines. But there are significant hurdles to the technology.
It's fairly new, with just a handful of such plants operating in the world -- and only two in the United States. And none of those plants operate at high altitudes akin to Colorado.
Xcel has been working on the project for nearly two years.
"We feel that we've tested all the engineering principals to the point where we think this is a viable technology," said Xcel spokesman Tom Henley.
"We'll be building the plant, unless someone can show us that the technology itself just doesn't work or there are excessive costs associated with it that we've been unable to uncover," he said.
The $3.5 million will be spent studying the best location for the IGCC power plant, taking issues such as the location and size of existing transmission lines, water supplies and other siting issues, Henley said.
Xcel named Mary Fisher, vice president for Colorado resource development, project leader for the IGCC plant. Fisher was named vice president in May 2004, and worked on securing the necessary permitting, water rights and other necessary approvals for a third generating station at the Comanche power plant in Pueblo, the first coal-fired power plant to be built in Colorado in decades.
Federal funding may be available for the plant. The Energy Policy Act has authorized as much as $200 million a year for all clean-coal technologies. The act also specified federal support for an IGCC power plant that's built in a Western state, burns western coal, and is sited at least 4,000 feet above sea level, that also demonstrates the ability to capture and bury carbon dioxide emissions underground.
Although Xcel said it hasn't decided where to put the IGCC plant, Xcel's president previously described an ideal site as one that would be near existing transmission lines, with adequate water supplies, and close to an existing power plant, much like Xcel's Pawnee power plant in Brush, in northeastern Colorado.
That area is also home to the Denver-Julesburg Basin, a longtime oil and natural gas field that could benefit from the burying of carbon dioxide emissions from the plant. Old oil fields have seen production levels jump when carbon dioxide is injected underground. |
