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4/12/2013 1:12:00 PM
Report raises doubts about FutureGen

CHAMPAIGN, Ill. (AP) — A new report from Congress’ nonpartisan research arm raises questions about the future of the FutureGen clean-coal project in Illinois, citing delays and other concerns.

The report by the Congressional Research Service says the project’s many delays raise questions about how close the project will be to demonstrating its carbon-capture and sequestration technology by the time its $1 billion in stimulus funding expires in 2015. The money makes up the bulk of FutureGen’s $1.3 billion in financing, and the current timeline calls for construction to start in 2014 and finish in 2017.

The report, published April 3 but obtained Thursday by The Associated Press, also questions whether the power industry has enough incentive to use the carbon-capture technology, or CCS, that FutureGen is intended to demonstrate.

“Despite congressional

and Obama Administration commitments to the FutureGen 2.0 project,

particularly the $1 billion appropriation from (the American Recovery and Reinvestment Act), questions remain as to whether or not FutureGen 2.0 will succeed,” the report states.

“Nearly 10 years and two restructuring efforts since FutureGen’s inception, the project is still in its early development stages,” the report says.

Ken Humphreys is chairman of the FutureGen Alliance, the companies working with the U.S. Department of Energy to build the project. He said Thursday that he believes the $300 million FutureGen has, beyond the stimulus financing, will carry the project through to 2017.

“FutureGen 2.0 is on schedule to achieve a 2017 operating date, which will be followed by twenty years of power generation using CCS,” he said in an emailed statement.

A spokeswoman for U.S. Sen. Dick Durbin, the project’s biggest backer in Congress, said he, too, disagrees with the report’s findings.

“It’s not a secret that the FutureGen project has had many ups and downs and that the project has changed from what was originally envisioned,” spokeswoman Christina Mulka said. “We feel the CRS report accurately chronicles those changes, but does nothing to ‘cast doubt’ or ‘call into question’ the FutureGen project.

“Our understanding is that while the Department of Energy and the FutureGen alliance have a tight timeline, they remain on track with their plans to use the federal funding within the authority directed in the Recovery Act,” she said.

Report author Peter Folger declined comment through a Congressional Research Service spokeswoman because the reports are considered confidential. They’re produced at the request of members of Congress or committees, or when CRS staff members anticipate interest on the part of lawmakers, spokeswoman Janine D’Addario said. She declined to say if the FutureGen report was requested by anyone.

As it’s currently planned, the scaled-back FutureGen would refit an existing coal-fired power plant in Meredosia in western Illinois to produce power while removing carbon dioxide from the fuel and storing it underground. Carbon dioxide is a greenhouse gas linked to climate change.

The project has a long history of political and financial hurdles.

It initially would have built a new power plant near Mattoon in eastern Illinois and stored CO2 underground that location. President George W. Bush’s administration, which started FutureGen, scrapped that more ambitious plan because of rising costs, but backers including Durbin complained that politics — Illinois was chosen over sites in Texas, Bush’s home state — rather than finances were responsible.

The FutureGen Alliance also once included utilities including Ameren and Exelon, but the project now is limited to six members, mainly coal producers such as Peabody Energy and Consol Energy. Neither company returned calls seeking comment.

The report also notes that the Congressional Budget Office last year issued is own report that said the success of CCS technology will require that costs come down and incentives for the power industry such as tax credits or carbon taxation.

“Even then, industry may choose to forgo coal-fueled plants for natural gas or other sources that emit less CO2 compared to coal,” the CRS report says.

The domestic supply of natural gas has rapidly increased and could lead power producers to invest more heavily in plants that use that fuel, the report says, rather than invest in what will likely be more expensive CCS technology.

The report also notes that the project still needs further governmental approvals to proceed and is likely to need more private-sector funding to deal with increasing costs.

FutureGen faces other challenges, too. The Illinois Commerce Commission late last year approved a plan to require power companies such as Commonwealth Edison to buy the electricity produced at the Merdedosia plant, creating a much-needed stream of revenue. But  Commonwealth Edison and a group of independent power producers have filed a legal challenge, saying they don’t believe the state has authority to force them to buy FutureGen’s power.


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