KFx test burn called a success
Initial results from test burns of KFx coal show that it will likely qualify for lucrative environmental tax credits that could make the product more attractive to coal-burning fire plants.
Test results from the Neil Simpson I power plant, where the coal was burned over the last three weeks, show KFx coal burns hotter and releases lower emissions of sulfur dioxide, nitrogen oxide and mercury than untreated Powder River Basin coal, said Mark Sexton, CEO of the Denver-based company.
The lower emissions means the coal, which is heated and pressurized in large boilers at the KFx site north of Gillette to increase its heating value, should qualify for the tax credits, Sexton said.
“We are delighted that these initial test results from the Neil Simpson station are as good as, or better than, our expectations,” said Sexton said in a statement Monday.
“Our confidence is high that the competitive emissions properties of K-Fuel will make this product extremely desirable to coal consumers.”
The credits are reserved mostly for renewable energy sources but also contain provisions for “refined coal” products.
To qualify for the credit, the end product must have a market value that is increased by at least half over the feedstock that is used to produce it.
“If you buy the coal for $10, you have to sell it for $15,” KFx Chairman Ted Venners said. “Coal right now in the northern Powder River Basin (where the KFx plant is located) is selling anywhere from $7 to $9 a ton and we're selling it into the market at $45 a ton.”
Tests showed the heating value of the coal went from 8,500 British thermal units a ton to as high as 11,100 Btu, with reduced moisture - major selling points for utilities that increases the price.
On the environmental side, there also must be a 20 percent reduction of nitrogen oxide and either sulfur dioxide or mercury when it is burned.
Test results from the burn show that:
Sulfur dioxide emissions were reduced by 35 percent to 40 percent.
Mercury emissions decreased 70 percent to 75 percent.
Nitrogen oxide emissions were decreased between 14 percent and 22 percent.
The tax credits, which can be applied against a company's general tax liability, could be as high as $5.60 per ton, Venners said. He thinks that could speed along development of plants at other coal mines.
“Whoever owns the plant gets the tax credits,” Venners said.
The company is in the process of finishing engineering plans for plants at Buckskin mine and the Coal Creek mine. Sexton said last fall that the company would like to build up to 12 plants in the Powder River Basin.
“Fortunately, the product and the process is not dependent on tax credits but it does give an incentive for coal companies and utilities to do something faster,” Venners said.
Now that the tests are complete, the company will focus on finishing its silo, which Venners said would likely be completed in the next week.
He still expects trains to be shipping the coal to power plants sometime this spring.
- By PETER GARTRELL, News-Record Writer
gillettenewsrecord.com |
