Babcock & Wilcox to begin front-end work on FutureGen 2.0

The Babcock & Wilcox Co. (B&W) (NYSE: BWC) said March 7 that subsidiary Babcock & Wilcox Power Generation Group (B&W PGG), has reached an agreement with the FutureGen Industrial Alliance to begin initial engineering and preparation for full front-end engineering and design work on the U.S. Department of Energy’s FutureGen 2.0 carbon capture and storage (CCS) project.

B&W’s complete scope of work for FutureGen 2.0 includes the design of the near-zero emissions plant’s oxy-coal combustion system, air quality control systems, boiler, steel and other control systems. The contract authorizes B&W and the FutureGen Industrial Alliance to begin project Phase II-A for the 167 MW (gross) power plant in Meredosia, Ill., at the site of Ameren’s (NYSE: AEE) shut Meredosia power plant. During this time, B&W and the Alliance will continue to negotiate additional contracts to proceed with full front-end engineering and design work.

The DOE recently announced the beginning of Phase II project development and a new cooperative agreement with the Alliance.

“Our contract with the FutureGen Industrial Alliance is a major milestone in the FutureGen project and we’re excited to begin work on this new stage,” said J. Randall Data, B&W PGG President and Chief Operating Officer. “As first-of-its-kind CCS technology, FutureGen will be groundbreaking for our team and for America.”

The goal of the FutureGen 2.0 project is to upgrade the existing power plant with B&W’s oxy-coal combustion process to separate and capture more than 90% of the CO2 generated during the combustion process. Oxy-coal combustion uses oxygen mixed with recycled flue gas to replace the normal combustion air in a coal-fired boiler. As coal is burned, the resulting flue gas consists primarily of CO2, which is well-suited for compression and storage.

Alliance works on power sales issues at Illinois commission

The Alliance on Feb. 19 filed with the Illinois Commerce Commission a report that said, among other things, that it has been able to bump up the planned capacity of the FutureGen 2.0 project by 8 MW and that the project is targeted for completion in mid 2017. The commission on Jan. 9 began the second phase of a two-phase approval process related to the FutureGen project’s electricity sales and costs. The “Pre-Approved Capital Cost Request and Updated Ratepayer Impact Analysis” filed on Feb. 19 was requested by the commission in its Dec. 20, 2012, order approving the first phase of this proceeding.

The Illinois Power Agency Act (IPA Act) created a state agency responsible for procuring electricity for Illinois retail ratepayers. Under the IPA Act, the Illinois Power Agency (IPA) serves as a procurement agent that acquires power for two of Illinois’ regulated electric utilities – Commonwealth Edison (ComEd) and Ameren Illinois. The IPA primarily fulfills this procurement function via an annual Power Procurement Plan, which is implemented through an annual power procurement auction. The IPA also helps administer compliance with the IPA Act’s Clean Coal Portfolio Standard for both the regulated electric utilities and Alternative Retail Electric Suppliers (ARES). The IPA Act also directs the IPA, as part of the procurement planning process, to consider sourcing agreements from qualifying clean coal facilities for utilities and ARES.

The FutureGen Industrial Alliance is a non-profit corporation engaged by the DOE under a federal financial assistance award to implement the DOE’s FutureGen 2.0 Program. The FutureGen 2.0 Program will develop, repower, own and operate the Meredosia Energy Center and the integrated CO2 pipeline and storage facility in Morgan County, Ill.

FutureGen 2.0 was initiated in October 2010 by DOE, which has committed more than $1bn in American Recovery and Reinvestment Act (ARRA) funds and other appropriations for research, development and demonstration activities of oxy-combustion and CO2 capture, transportation, and storage.

Plant would burn combination of Illinois and PRB coals

The oxy-combustion project will retrofit and repower Meredosia with a near-zero emissions oxy-combustion process utilizing the Unit 4 steam turbine generator, certain coal-based infrastructure associated with Units 1-3, and certain of the site’s common facilities. The project will use a blend of high-sulfur Illinois bituminous coal (60%) and low-sulfur Powder River Basin (PRB) coal (40%) and have a gross output capacity of 176.3 MW, which includes an approximate 8 MW capacity increase that results from a steam turbine upgrade. This configuration enables the project to exceed the DOE minimum capture target requirement of 1 million metric tons of CO2 per year at an 85% availability/capacity factor.

Both the power and pipeline projects are currently in the planning, permitting and design phase; project construction is anticipated to begin in early 2014, with commercial operations commencing in mid-2017.

In assessing the coal sources for this project, the report noted that no rail unloading facilities currently exist at the site, so the primary Illinois coal sources it looked at were three mines within 50-75 miles of the plant for truck deliveries: Arch Coal’s (NYSE: ACI) Viper deep mine; coal operator Chris Cline’s Shay #1 deep mine; and Tri-County Coal’s Crown III deep mine. Mines greater than 75 miles from the Meredosia site would require both truck and barge transportation, increasing the delivered cost of fuel for the project.

PRB coal was assumed to be sourced from mines located in the southern portion of the basin because of higher thermal content (8,800 Btu/lb) and lower transportation costs. These mines include the North Antelope Rochelle mine of Peabody Energy (NYSE: BTU), the Antelope mine of Cloud Peak Energy (NYSE: CLD) and the Black Thunder mine of Arch Coal. Transportation from the PRB would consist of rail transport from the basin to the Cahokia Dock barge loading facility, and then barge transport up the Illinois River to the Meredosia site.

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.