The cost of Southern Co.’s Kemper County Energy Facility carbon capture and storage project in Mississippi continues to climb. The project, originally billed at $2.4 billion, now has a projected price tag of $6.66 billion after a new budget overage of $18 million, the company reported Friday in a monthly filing with the Securities and Exchange Commission. The price increase is “related to operational readiness and challenges in start-up and commissioning activities which includes the cost of repairs and modification to the refractory lining inside the gasifiers,” according to the filing.
“During March 2016, Mississippi Power has continued to conduct repairs and modifications to the refractory lining inside each of the gasifiers and to inspect and evaluate the need for additional refractory work, which could impact the projected in-service date and/or the related cost estimate for the Kemper IGCC,” the filing explains. Any update to the system’s schedule, which currently projects reaching full operation in the third quarter of this year, is expected to be announced in the next monthly status report to be filed at the end of this month. The project is almost three years behind schedule.
Extending the in-service date beyond Aug. 31 is estimated to result in additional costs of roughly $25 million to $35 million per month. That total “includes maintaining necessary levels of start-up labor, materials, and fuel, as well as operational resources required to execute start-up and commissioning activities. However, additional costs may be required for remediation of any further equipment and/or design issues identified,” the SEC filing says.
The project, a new-build, post-combustion CCS facility near the city of Meridian, has been producing energy with natural gas since August 2014. Once fully operational, the plant will use Mississippi lignite, a low-rank brown coal, to produce electricity. It will employ a custom integrated gasification combined cycle (IGCC) system and CCS technology to produce electricity from the coal with carbon emissions roughly equal to that of natural gas. The CCS and IGCC portions of the plant are not online.
