Despite the surge of efforts to make clean coal a viable option in recent years, the industry is currently finding it difficult to continue pursuing what many see as a critical phase of a larger long-term exit strategy from fossil fuels energy systems.Nebraska-based Tenaska recently proposed the construction of the Taylorville Energy Center, a 602-MW coal gasification power plant with carbon capture and storage technology. However, in a bid to win legislative approval, it now wants to swap out the clean-coal technology for a plant that runs on natural gas. While Tenaska officials did not comment on the change of trajectory, the new proposal does not preclude a coal gasification addition to the Illinois facility in the future. With low current natural gas prices, choosing natural gas over clean coal right now would reduce two-thirds of the original US $3.5 billion price tag. “It will be designed in a way that the gasification can be added later,” Phil Gonet, Director of the Illinois Coal Association said. “It's a deferral. That makes sense.” Illinois' coal industry was eagerly awaiting the commencement of a clean-coal project that would provide research opportunities and funding in a state that is home to nearly 20 percent of US recoverable coal reserves. Many believe low natural gas prices are not here to stay and that coal will continue to be a long-term option once the economics and technology come online. EU utilities, on the other hand, have found that the costs of burning coal have fallen over the past year. Reuters reported this week that lower industrial output coming out of Europe recently has driven down the cost of carbon permits - the certificate that puts a price on carbon emissions - by more than 60 percent over the last year. The lower cost of the permits reduces the cost of emitting carbon dioxide and makes cheaper, but higher-polluting fuel sources more viable. "If you have anything that's coal-fired in your generation park at the moment - be it lignite or hard coal - you will take advantage of the high margins and burn the stuff," a trader with a major German utility told Reuters.
Like all technologies, it is not always the design or output that matters in mainstreaming new ideas. The timing is as important as anything else.Securities Disclosure: I, James Wellstead, hold no direct investment interest in any company mentioned in this article. Future Coal from Coal Investing News