Cleaning up coal power

Project aims to prove coal can go green

A new, shiny power plant in this seaside village could change everything for coal plants.

Concerns about cleaner electricity have led to pursuits of technology that enable coal to be burned without polluting.

When a coal gasification demonstration plant fires up in September, its designer, Mitsubishi, expects to prove that it’s possible to burn coal without polluting.

And proving this technology, known as integrated gasification combined cycle, or IGCC, should give Mitsubishi’s U.S. client, NRG Energy, the momentum to jump all the other hurdles to build a whole fleet of the clean plants.

The project promises to solve the problem of the ages for power plants: how to produce cheap, clean, reliable electricity. No existing technology can do all three perfectly.

Problem is, IGCC isn’t there yet. It costs about 20 percent more than traditional plants. And even though it’s easier to collect the resulting carbon dioxide from an IGCC plant than a traditional plant, there’s no proven way to get rid of the greenhouse gas.

NRG executives think solving the IGCC riddle is worth the trouble because they expect the U.S. soon will limit the amount of carbon dioxide that power generators may emit.

“With the additional cost of IGCC, to just voluntarily build something that’s 20 percent more expensive, that’s commercial suicide,” NRG chief executive David Crane said.

NRG’s quest to build one of its plants in Texas has taken executives to the halls of the state Capitol, the oil fields of East Texas, Mitsubishi’s executive offices near Tokyo and a demonstration plant in this town on the Pacific.

Market efficiency

Japan has precious little natural fuel resources. Nearly everything – coal, oil, natural gas – must be imported. That prompts the Japanese to use fuel as efficiently as possible.

On top of that, the Japanese government limits emissions of greenhouse gases, pushing engineers to design cleaner power plants. So, in 2001, Japan’s nine regional power utilities turned to IGCC, considered one of the cleanest and most efficient ways of using coal.

The utilities banded together to build a small, 250-megawatt demonstration plant in Nakoso, just north of Tokyo. It’s not the only gasification plant in the world, but it’s the first to use Mitsubishi’s technology, designed to work on a wide range of coals and to minimize maintenance downtime.

The Japanese utilities invested $800 million in the plant, which sits on just 6 acres of land next to the sea, compared with coal plants in the United States that typically use sites with hundreds of acres.

Search for answers

About two years ago, NRG’s Crane sent his top engineers to find some technology that would eliminate carbon dioxide and produce power profitably.

When the engineers came back with a proposal for IGCC, Crane groaned. He’s been in the business of power plant investing for years, and he’s seen IGCC projects fall apart because of unreliable technology.

“I said, ‘Oh man, do we have to go down this path?”‘ said Crane, who took the reins of the New Jersey power company in late 2003 as NRG emerged from bankruptcy.

But the engineers convinced Crane that Mitsubishi and some of its rivals had improved the technology – a different cooling system that wouldn’t break down as often, a different way of burning the coal and an offer to guarantee that the technology works reliably.

Like any new technology, the first coal gasification power plants to roll out of the factory will be more expensive than later plants – about 15 percent to 20 percent more than a traditional coal plant.

NRG executives expect the cost to decline after six or seven plants are built in the U.S. But other industry experts think it will take about a dozen plants for the price to be competitive with traditional coal plants.

While NRG is lobbying to get financial help from state or local governments to build IGCC now, the company continues negotiating with Mitsubishi in Tokyo for a firm price. Mitsubishi’s lead negotiator seems to appreciate that the fortunes of his own company may hinge on NRG’s success in lobbying.

Takaya Watanabe, deputy general manager of Mitsubishi’s power systems department, speaks English without an accent and has a no-nonsense charm that puts the NRG guys at ease.

“It’s good for a company to say we want to be green, but in my opinion, unless someone is willing to pay, it’s a dream. It won’t keep your family eating rice,” he said.