There seems to be something of a trend brewing to convert coal gasification power projects from being fired by syngas to regular natural gas, with EmberClear Corp. (TSXV: EMB) saying May 17 that it now plans to fire its Good Spring plant in Pennsylvania with natural gas.
This comes on the heels of a recent announcement by Tenaska that it now wants to build its Taylorville Energy Center in Illinois with natural gas as the fuel, with coal gasification still a possibility if the economics of natural gas don’t work out over the long term.
EmberClear said it now plans to increase the power generation at the Good Spring plant in Schuylkill County, Pa., from 270 MW to 300 MW. The new 300-MW natural gas combined cycle (NGCC) power plant is a variation of the 270-MW integrated gasification combined cycle (IGCC) power plant, named Good Spring IGCC.
“This change results from the recent emergence of favourably priced long-term contracts for natural gas,” said EmberClear, a Canada-based company. “EmberClear plans to enter a long-term natural gas contract to supply Good Spring NGCC in the coming months.”
Good Spring had previously been permitted to generate electricity from both syngas and natural gas. Originally, syngas would have been created with coal gasification technology as the primary fuel with natural gas as a backup fuel. The new change to natural gas lowers the project complexity, reduces the capital cost by at least 60% and accelerates the construction schedule, the company noted. “The lack of regulatory clarity on emissions for coal-based electricity plants plus the immediate availability of natural gas provides a strong incentive to use natural gas as the primary fuel source,” it added.
EmberClear has begun the contract and financial closing activities to prepare for construction in 2013. The company said that if the future regulatory environment and economics make the IGCC power plant a better solution, EmberClear has the ability to build an IGCC plant.
“The price difference between wholesale electricity and natural gas has grown substantially in the last few months,” said Albert Lin, CEO EmberClear. “With long-term contracts for natural gas being so competitively priced, a compelling opportunity to quickly move into contracting and construction with higher than historical returns presents itself. We intend to capitalize on this market condition.”
EmberClear in the last couple of years had been accumulating nearby anthracite coal reserves as the feedstock for the minemouth Good Spring IGCC. It has previously said some of this coal might be produced for the outside market.