HOUSTON, Sept 20 Southern Co power
utility, which is building one of the world's first advanced
coal-fired plants that also captures carbon dioxide emissions,
cautioned federal regulators that, because of location, its $5
billion project should not be used as a standard for future coal
The 582-megawatt Mississippi plant's proximity to oil
fields, where the CO2 can be injected, cannot be easily
replicated in other parts of the country, the company said.
The U.S. Environmental Protection Agency on Friday announced
regulations setting strict limits on the amount of carbon
pollution that can be generated by new U.S. power plants. The
limits require that new coal plants utilize carbon-capture
technology which is not currently in use except at small test
Southern's Mississippi Power utility is building the plant
in Kemper County, where it will gasify coal and separate the
dangerous pollutants before the gas is burned to produce
electricity. It was sited near a mine to supply lignite, a
lower-quality coal, to the plant and in a region where the
captured carbon can be injected underground to increase
production from older oil fields.
The EPA rules put Southern in a difficult position since its
Kemper County project has received $245 million in Energy
Department grants and stands to benefit from tax incentives if
completed on time.
Southern, which supports President Barack Obama's climate
change initiative, said the EPA's proposed emission standard
appears to be based on the "anticipated performance" of the
Kemper County plant.
But "because the unique characteristics that make the
project the right choice for Mississippi cannot be consistently
replicated on a national level, the Kemper County Energy
Facility should not serve as a primary basis for new emissions
standards impacting all new coal-fired power plants," Southern
said in a statement.
The utility now plans to spend about twice the amount of
initial projections to finish the Kemper plant by May 2014.
Instead of encouraging development of all U.S. energy
resources, Southern said the EPA's performance standards for new
plants "essentially eliminate coal as a future generation
option" and potentially restrict new natural gas-fired plants.
"Environmental regulations should balance the desire to
reduce emissions with the need to avoid dampening an already
challenged economy," Southern said.
A Southern spokeswoman declined further comment.
Southern's Kemper County plant and the Boundary Dam plant in
Saskatchewan, Canada, are expected to be the first power
projects in the world with carbon-capture technology.
Both plan to capture CO2 for enhanced oil recovery.
"Locations such as these that are suitable for the injection
of CO2 are very limited within the United States," said the
American Public Power Association in a release that described
the proposed EPA standard as "unrealistic."
"Though both projects (Kemper and Boundary Dam) are
admirable for attempting to advance the technology, neither of
them has demonstrated that the technology is commercially
viable," APPA said.
Even if the Kemper and Boundary Dam plants perform well, the
industry may not see widespread CCS technology for another
decade because of high costs and regulatory hurdles, said Patty
DiOrio, a director with the IHS energy consulting firm.
Another promising CCS project, the $4 billion Hydrogen
Energy California plant, faces a difficult regulatory path.
In June, the California Energy Commission staff issued a
preliminary environmental assessment that warned the project has
"significant, and for the most part, unresolved issues,"
including air quality, biological resources, carbon
sequestration and greenhouse gas emissions, water supply and
power plant reliability, among others.