GHG Monitor Vol. 1 No. 2
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January 13, 2017

Kemper Cost Estimate Breaks $7 Billion; Gasifier Issue Delays Startup

By Abby Harvey

Mississippi Power’s Kemper County Clean Energy Facility carbon capture and storage project is now expected to cost $7.01 billion, the utility said in its latest filing with the U.S. Securities and Exchange Commission. The plant, a new-build coal-fired power plant with a pre-combustion carbon capture system, was initially billed at $2.4 billion prior to construction beginning in 2010.

The $34.2 million cost estimate adjustment covers “approximately $9 million for the month of November related primarily to modifications, improvements and maintenance for operational readiness and start-up, and approximately $25 million related to the inclusion of projected schedule costs through January 31, 2017,” according to the Jan. 6 filing.

The ongoing delay to startup has cost the company $25 million to $35 million per month, as illustrated by the amount reported in this latest filing. Those costs include “maintaining necessary levels of start-up labor, materials, and fuel, as well as operational resources required to execute start-up activities.”

The plant had been on schedule to reach full operation by the end of 2016, but issues with one of its two gasifiers have further delayed startup, which had originally been scheduled for May 2014. “Mississippi Power experienced challenges with the gas clean-up systems for gasifier ‘B’, which have delayed the integrated operation of both gasifiers; however, Mississippi Power continues to expect that the Kemper IGCC will be placed in service by January 31, 2017,” the filing says.

Both gasifiers, which turn coal into synthetic natural gas, have produced syngas in the last few months, but it appears that there have been problem sustaining an adequate nitrogen supply in gasifier B. “Sustaining nitrogen supply would be an example of a challenge, but is a short-term one, because of its importance in start-up activities. Less nitrogen is required during full operation,” Jeff Shephard, a Mississippi Power spokesman, told GHG Weekly by email.

Without adequate nitrogen, which is needed to gasify the coal, integrated operation of both gasifiers cannot occur. “If integrated operation of both gasifiers does not occur by mid-January, the expected in-service date and related cost estimate for the Kemper IGCC may require further revision,” the filing says.

The latest cost estimate increase was reported just days before the announcement of the completion, on time and on budget, of a separate U.S. carbon capture, use and, storage project. NRG Energy’s Petra Nova project in Texas is highly dissimilar from the Kemper project. Petra Nova is a retrofit of an existing coal-fired plant while Kemper is a new-build plant. Petra Nova’s carbon capture system is post-combustion while Kemper is pre-combustion. Many of the systems in the Kemper plant, including the transport integrated gasification (TRIG) system, are first-of-a-kind.

Regardless, Petra Nova has claimed the title of the first commercial-scale coal-fired CCUS project in the nation. It is also the largest post-combustion CCUS project in the world. Kemper, however, once operational will be the world’s first commercial-scale pre-combustion, new-build CCUS project on a coal-fired power plant.

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