CRS REPORT RAISES QUESTIONS ABOUT FUTUREGEN TIMELINE

Tamar Hallerman
GHG Monitor
4/12/13

A recently released Congressional Research Service report questions the planned schedule for the $1.65 billion FutureGen 2.0 carbon capture and storage project. Congress’ non-partisan research arm said in the report, made public this week, that recent delays following the oxyfuel-combustion project’s pre-front-end engineering and design phase are making it increasingly harder for the Department of Energy’s flagship CCS project to stay on schedule. It questions whether the retrofit project, planned for a 200 MW unit at a mothballed coal- and oil-fired facility in western Illinois, can spend the entirety of its $1 billion American Recovery and Reinvestment Act (ARRA) grant—while meeting all of its DOE benchmarks—by the federally-mandated Sept. 30, 2015 deadline. “Delays in FutureGen’s project development may have made full-scale demonstration of CCS technology by 2015—the year that federal stimulus funding for FutureGen expires—difficult to accomplish,” the report says,

The report characterizes the project as still in “early development” and says that securing additional funding will be another major challenge moving forward as costs increase. “Remaining challenges to FutureGen’s development include securing private sector funding to meet increasing costs, purchasing the power plant for the project, obtaining permission from DOE to retrofit the plant, performing the retrofit and then meeting the goal of 90 percent capture of CO2,” the report says. Beyond the $1 billion in ARRA dollars allocated to the project, the industry coalition backing the project, the FutureGen Alliance, must cover all additional costs incurred during the development process. But as the project moves forward and cost estimates increase—as is typical with most major projects during the engineering and design phase—there could be fewer companies around to pick up the tab. The Alliance most recently lost the backing of two Illinois companies that once flirted with joining the industry consortium—Exelon and Caterpillar.

Project Moves Ahead Amid Legal Threat

The status report on the project comes at a critical point in time for the project. While FutureGen won two major victories in December and February when state regulators approved a 20-year power purchase agreement (PPA) and DOE greenlighted a 16-month front end engineering and design phase, the project is facing a legal challenge from utilities and other industry groups opposed to its PPA. In addition to preparing for a legal battle, FutureGen Alliance also continues to hash out the details of its PPA with state regulators and must soon submit a Class VI Underground Injection Control permit application to the Environmental Protection Agency’s regional office for the CO2 sequestration aspect of the project. All the while, the project developers must stick to their tight timeline moving forward since they are already months behind their initial schedule.

In a written statement to GHG Monitor this week, FutureGen Alliance CEO Ken Humphreys said that the project remains on schedule to meet its 2017 operations date as approved in its 20-year PPA with the state of Illinois. “While the project must expend its federal ARRA funding by 2015, non-federal funding fills the financial needs of the project after 2015,” he said.