The Department of Energy will issue a final determination on the fate of its cooperative agreement with Summit Power’s Texas Clean Energy Project on July 15, a DOE spokesperson told GHG Daily on Tuesday. “The Department of Energy (DOE) informed Summit Texas Clean Energy, LLC, (STCE) on June 10, 2016, of its pending intention to discontinue the cooperative agreement for the Texas Clean Energy Project (TCEP) for failure to achieve the technical objectives for phase 1,” the spokesperson said by email.
Summit has been struggling to reach financial close, a milestone that must be met for the cooperative agreement to stay in effect. DOE in mid-May pushed back the deadline for the project to meet financial close, giving the company until July 7.
The project, should it survive, will be a 400-megawatt coal integrated gasification combined cycle power generation facility that will incorporate carbon capture and storage. Being built outside the city of Odessa, TCEP was initially billed at $1.9 billion but is now expected to cost $3.9 billion. The original forecast completion date of June 2014 has been pushed back to after June 2018.
The department awarded Summit a total of $450 million for TCEP. As of February 2016, when DOE suspended funding for the project, the department had reimbursed Summit approximately $116 million in project costs, or approximately one-third of its total commitment.
The department’s decision to back away from TCEP should not be seen as a comment on the quality of the project, but simply as a decision of financial responsibility, the spokesperson said: “These first-of-a-kind projects often experience delays and other risks in their development. The Department therefore must balance the flexibility needed for these projects to succeed while also taking seriously its responsibility to protect taxpayer dollars when we determine that a project is not meeting important milestones.”
Summit has remained tight-lipped on the impending decision. “We continue to work with DOE on a path forward for our project. We have no further comment at this time,” CEO Jason Crew told GHG Daily by email.
