Tenaska gets new Taylorville air permit from Illinois EPA

Tenaska, managing partner of the Taylorville Energy Center (TEC) coal gasification project, said April 30 that the Illinois Environmental Protection Agency (IEPA) has issued the final amended air permit for TEC.

When built, TEC will be among the cleanest coal-based plants in the world. Strict permit limits on conventional pollutants such as SO2 and NOx are less than 1/40th the level of the average U.S. coal-fueled power plant. Following the release of its draft air permit in October 2011, IEPA received numerous comments that have been addressed with the issuance of this final permit. IEPA made many changes to the draft permit, the most significant of which lowered permissible mercury emissions by 90% following a request from Tenaska. Also requested by Tenaska was a binding limit on carbon emissions.

“The Taylorville Energy Center is going to be a model for clean, efficient design,” said Greg Kunkel, Tenaska vice president for environmental affairs. “We appreciate all of the hard work of the staff at Illinois EPA to finalize this permit.”

The hybrid design of the Taylorville facility produces almost all of its carbon emissions from two sources – the natural gas power block and the gasification island, which converts coal into substitute natural gas (SNG). The requested carbon limit was consistent with carbon capture requirements contained within the Illinois Clean Coal Portfolio Standard Law.

As IEPA was considering public comments on the TEC permit, on March 27 the U.S. EPA proposed New Source Performance Standards for Greenhouse Gas Emissions (GHG NSPS) for new power plants. With certain exceptions, the proposed standards would limit CO2 emissions from any new fossil-fueled power plant to 1,000 lbs/MWh (gross). This final air permit for TEC includes a power block CO2 emissions limit of 827 lbs/MWh (gross).

When coal is being gasified to produce natural gas, efficiencies become available that help reduce the facility-wide emissions rate. Under those operating conditions and when CO2 is being captured and stored, emissions are expected to be as low as 666 lbs/MWh (gross) when one combustion turbine is operating (e.g. in off-peak hours) and 716 lbs/MWh (gross) when two combustion turbines are operating (e.g. in on-peak hours).

Consistent with the state’s Clean Coal Portfolio Standard law, Tenaska also requested a CO2 emissions limit on the gasification island requiring 90% of CO2 emissions to be captured and stored when it is possible to do so. IEPA determined that it could not include such a limit in the permit at this time because it would be inconsistent with IEPA’s Best Available Control Technology (BACT) determination and because of enforceability concerns.

Although IEPA was unable to accept Tenaska’s request for a binding CO2 limit on emissions from the gasification island, the company is required under Illinois law to capture at least 50% of its CO2 emissions facility-wide and at least 90% of its CO2 emissions from the gasification island.

The TEC facility will use coal as a feedstock to produce pipeline quality SNG for use in its combined cycle natural gas electric generating facility or for sale to the gas pipeline system.

In November 2011, the Illinois Senate approved SB 678, the Comprehensive Energy Efficiency and Investment Act, that would allow Tenaska to build TEC. The Illinois House could vote on the measure in May. SB 678 and the TEC continue to earn the strong support of a broad coalition of labor, business, environmental and community interests including the state’s leading consumer advocates Attorney General Lisa Madigan and the Citizens Utility Board because of the strong consumer protections and low rate impact from the plant, Tenaska noted.

A recent analysis conducted by Pace Global concluded that because interest rates have dropped by more than 40%, the overall rate impact from the project is actually $162m lower now than when the TEC Facility Cost Report was issued in 2010. In addition to the rate cap for all residential customers, legislative changes in recent years have ensured that at least two thirds of any capital cost overruns and two thirds of any carbon sequestration cost overruns will be paid for by the project’s owners and not by ratepayers.

Exelon (NYSE: EXC) and other critics have been battling the project, claiming it puts too much expense and risk on ratepayers at a time when conventional natural gas is very cheap and may remain so in the future.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.