Tenaska poised to be first electric generator to provide clean air benefits required by new law.
SPRINGFIELD, ILL. – January 12, 2009 – A major milestone in the nation’s development of environmentally responsible coal power plants was achieved in Illinois today with the signing into law of SB 1987, the Clean Coal Portfolio Standard Act.
The new law creates a framework for developing coal gasification projects with carbon dioxide (CO2) capture and storage, requiring emissions from these electric generation facilities, including Tenaska’s proposed Taylorville Energy Center (TEC), to be as clean as natural gas generators. Like renewable electric generation sources, TEC reduces emissions by displacing and reducing the operation of generation facilities that have higher emissions. TEC has the added advantage of 24/7 operation, providing a benefit to air quality day in and day out.
In order to qualify as a clean coal facility under this legislation, a plant must not only capture at least 50 percent of the total CO2 emissions but must also incorporate power generating equipment that limits regulated pollutants (such as sulfur dioxide, nitrogen oxides, carbon monoxide, particulates and mercury) from combustion of the synthetically-produced feedstock to levels that are no higher than combined cycle, natural gas fired plants.
In addition, the law requires electric utilities and other electric retail suppliers in Illinois to purchase up to 5 percent of their electricity from clean coal facilities. SB 1987 entitles one initial clean coal facility with a final air permit to 30-year purchase agreements for the sale of its output. TEC has a final air permit from the Illinois Environmental Protection Agency, allowing it to become the “initial clean coal facility” under the legislation. Because power from TEC will be required continuously, it will consistently be replacing power from higher emitting generators and providing significant reductions in greenhouse gases as well as regulated pollutants.
During the 2008 presidential campaign, “clean coal” became a popular phrase as development of these projects was promised by both candidates. Yet, its definition has been elusive. Home to the nation’s second largest coal reserves, the State of Illinois is the first coal-producing state in the nation to set out an environmentally responsible definition of clean coal, according to Tenaska Vice President Bart Ford. Tenaska is the managing partner of TEC. “This legislation is a powerful step forward in the development of clean coal electricity generation in the U.S.,” Ford said. “We now have the momentum that we and the state need to get this vital project built and operational.”
John Thompson, director of the Coal Transition Project for the national Clean Air Task Force, added, “The Illinois legislation requires emissions from coal-fueled facilities to be at least as low as clean burning natural gas power plants. This very tough standard should become the national model.”
Ford noted that the act increases the required CO2 capture-level to 70 percent for facilities not scheduled to enter commercial operation until after 2015 and to 90 percent for facilities not scheduled until after 2017. He said that the CO2capture rate from TEC is expected to be in the 55 to 60 percent range. “Basically, we will be capturing almost all of the CO2 and capturing or eliminating almost all of the other pollutants that are produced in the process necessary to turn coal into methane. This methane is identical to natural gas, and so when it fuels TEC’s efficient, combined-cycle block it produces no more CO2 or other pollutants than a normal, highly efficient natural gas plant. TEC’s emission levels are expected to be much lower than any other type of fossil fuel plant, including coal plants, oil plants, older natural gas plants and peaking natural gas plants.”
Illinois Attorney General Lisa Madigan led the effort, along with Tenaska, to develop legislation that would be good for the economy, create thousands of new jobs, and provide significant protections to electric customers. These protections include rate reviews by the Federal Energy Regulatory Commission and the Illinois Commerce Commission, as well as the need for final approval by the Illinois General Assembly after preparation of a detailed facility cost report. The legislation also contains a benchmark of 2.015 percent as the maximum potential rate impact on electric utility customers, which could only occur after the plant begins operations.
“This groundbreaking legislation will create jobs at Illinois clean coal and renewable energy facilities, as well as in the coal industry,” said Madigan. “It provides a unique opportunity for Illinois to become the national leader in the effort to build the kind of green economy championed by President-elect Obama. To pass this bill, we brought together a remarkable coalition and worked hard to produce legislation that will benefit all Illinoisans,” Madigan said.
The TEC project will be responsible for billions of dollars in economic development and create 1,500 jobs during construction, plus hundreds of permanent mining and power plant jobs, according to an economic impact analysis by Northern Illinois University. The study also found that central Illinois will experience a regional ripple effect from the project, creating hundreds of new positions in other industries and securing the ability to use high-sulfur Illinois coal in an environmentally responsible way.
The next step for the TEC project is the preparation of a detailed Front End Engineering and Design (FEED) study and facility cost report. Then, in its spring 2010 session, the Illinois General Assembly will review the FEED study and, if accepted, grant final approval of power purchase agreements for TEC as mandated by law.
Current estimates of construction costs are approximately $2.5 billion. The Allowance for Funds Used During Construction (AFUDC) and other costs that will accrue during the four-year construction period bring the total estimated capital cost to $3.5 billion. No payments will be due under the power purchase agreement until the plant is completed. Completion is scheduled for 2014.
Among the members of the diverse coalition supporting this initiative are leaders of the Citizens Utility Board, Illinois AFL-CIO, American Lung Association of Illinois, Illinois Coal Association and Clean Air Task Force.
Major newspapers in the area editorialized in support of this project – including the St. Louis Post-Dispatch, Chicago Sun-Times, Chicago Tribune, Daily Herald, Decatur Herald & Review and State Journal-Register – citing the project’s positive impact on electric rates and the importance of using domestic Illinois coal without the pollution created in conventional plants.
Phil Gonet, president of the Illinois Coal Association, said Illinois is using only a small fraction of the more than 100 billion tons of recoverable coal in the state. “That’s more energy in Illinois than all the oil in Saudi Arabia and Kuwait. We see clean, coal gasification technology as the future of economic development in our state and one of the nation’s most important tools for addressing global warming concerns.”
About Christian County Generation, LLC
Christian County Generation, LLC is a joint venture developing the Taylorville Energy Center (TEC). TEC is the first clean coal power plant proposed for the state. It will incorporate coal gasification, combined-cycle and CO2 capture and sequestration technology, making it among the most environmentally-responsible, commercially-sized coal plants in the world. The project is a joint venture of Omaha-based independent power developer Tenaska and Louisville, Ky.-based MDL Holding Co., LLC.
Tenaska is one of the largest privately-owned energy companies. Headquartered in Omaha, Nebraska, it develops, constructs, owns and operates non-utility generation and cogeneration plants. The company also markets natural gas, biofuels and electric power, and provides risk management services. Tenaska is involved in asset acquisition, fuel supply, natural gas exploration, production and transportation systems, and electric transmission development. Tenaska has developed approximately 9,000 megawatts (MW) of electric generating capacity across the United States. Tenaska’s affiliates operate and manage eight power plants in six states totaling more than 6,700 MW of generating capacity owned in partnership with other companies. Tenaska Capital Management, an affiliate, provides management services for standalone private equity investments, with more than $3 billion in assets, including ten power plants (with approximately 6,000 MW of capacity), gas storage facilities, and transmission infrastructure construction and maintenance operations. Tenaska is well underway in its development of two environmentally responsible, coal-fueled power plants. Taylorville Energy Center in Taylorville, Ill., will incorporate coal gasification, combined-cycle and CO2 capture and sequestration technology, making it one of the first clean-coal, commercially-sized plants in the world. Trailblazer Energy Center in Nolan County, Texas, would be the first conventional coal-fueled power plant in the nation to capture on a commercial scale up to 90 percent of the CO2 that would otherwise enter the atmosphere. In 2008, Tenaska was listed in benchmarking studies by the Natural Resources Defense Council as having the best fleet-wide record in the United States for controlling emissions of CO2, nitrogen oxides and sulfur dioxide. For more information about Tenaska, visit www.tenaska.com.
The Hybrid Integrated Gasification Combined-Cycle (IGCC) process for the Taylorville Energy Center is available for viewing and downloading atwww.cleancoalillinois.com, along with details on the project, the technology and the law. Permission to reproduce the illustration in news materials has been granted by Tenaska.
For additional information, please contact:
- Illinois Attorney General Lisa Madigan, Deputy Press Secretary, Natalie Bauer, (312) 814-3118, firstname.lastname@example.org;
- John Thompson, director of the Coal Transition Project for the national Clean Air Task Force, (618) 457-0137, cell (618) 203-6233, email@example.com
- Phil Gonet, president of the Illinois Coal Association, (217) 528-2092, cell (217) 971-7766, firstname.lastname@example.org
- Dave Kolata, executive director of Citizens Utility Board, (312) 263-4282, cell (312) 560-0929, email@example.com
- Beth Spencer, communications manager of AFL-CIO, (217) 544-4014, cell (217) 725-7424, BethS@ilafl-cio.org
- Kathy Drea, director of public policy for the American Lung Association of Illinois, (800) 788-5864, cell (217) 971-7274, firstname.lastname@example.org