Abby L. Harvey
GHG Monitor
10/30/2015
Mississippi Power this week announced another cost estimate increase, this time totaling $110 million, for the Kemper County Energy Facility, a new-build post-combustion carbon capture and storage project under development near Meridian, Miss. Such overages are not new to Mississippi Power, a subsidy of Southern Co.: The project’s costs have grown consistently from its initial price tag of $2.4 billion to the current total of $6.427 billion.
The plant, once completed in 2016, will use Mississippi lignite, a low-rank brown coal, to produce electricity. It will employ a custom integrated gasification combined cycle (IGCC) system and carbon capture and storage technology to provide power from the coal with carbon emissions roughly equal to those of natural gas. The project’s captured CO2 will be used for enhanced oil recovery.
The latest cost estimate spike, according to a Mississippi Power filing with the Securities and Exchange Commission, includes a “further adjustment of approximately $20 million for the month of September related to challenges in start-up and commissioning activities as well as operational readiness and approximately $90 million related to the recognition of additional schedule costs through June 30, 2016.”
Regardless of the additional costs, the plant’s “in-service [is] still scheduled for the first half of 2016, consistent with our previous and current disclosure,” Southern Co. CEO Tom Fanning said during the company’s third-quarter earnings call on Wednesday. “As we’ve said many times in the past, we will not take shortcuts or sacrifice safety in order to expedite completion of the plant, and we remain committed to providing a world-class generating facility for customers,” Fanning said.
New Testing Milestone Reached
Fanning also noted that a key milestone fluidization test conducted at the plant last week has yielded better-than-expected results. “The fluidization test is a process in which sand is used as a substitute for lignite in order to test the flow of solids through the gasifier vessel. Not only does this process validate a critical component and scale-up of these technologies, but it also allows the operations team to test and fine-tune control systems beyond what is possible with simulators,” Fanning explained.
The test was performed on only one of the plant’s two gasifiers, with testing on the second expected before the end of 2015. “We are extremely pleased with the results so far. In fact, the tests are going even better than what we expected; and we will take valuable lessons learned into the testing of the second gasifier later this year,” Fanning said.
Fanning also said he expects the final large testing milestone at the plant, the conversion of lignite into syngas, to take place near the end of the year, but it “could be early January.” The CEO added that he has high hopes for that test as well. “The general belief is we’re going to be able to manipulate lignite a lot easier than sand. Sand is a denser material. They all felt that if we could pass this test the way we were doing, they really felt they’re going to be able to handle the lignite pretty well. So they’re feeling good,” he said.
