How a US energy company tried to sell its failing ‘clean coal’ project to the world

The Kemper Project under construction. XTUV0010, CC BY-SA 3.0Below is an article published by Greenpeace’s Energy Desk about the latest scandal involving the Kemper County CCS project.  This is extremely relevant to the bioenergy with CCS (BECCS) debate: Kemper County was one of two flagship CCS projects supported by the Obama government.  The other, FutureGen2, was previously canceled after huge losses, cost overruns and delays and the total refusal by companies or banks to invest in it. On paper, Kemper County’s technology is state of the art, superior to other CCS technologies: It is an Integrated Combined-Cycle Gas Turbine (ICCG) power station with CCS, which, if it worked reliably and affordably, would be cleaner and more efficient than other technologies.  But reality is clearly very different from the theory, as this case illustrates.
It also illustrates the dangers of ‘learning by doing’ strategies about such complex and expensive technologies (leaving aside the impacts of coal mining and of biomass sourcing): Even a few unsuccessful projects like this swallow huge sums of money and, as the Kemper County case study shows, it’s often the poorest communities who’re paying the price of such failures.

The company behind America’s flagship ‘clean coal’ project tried to push the technology on countries around the world, even after they discovered its profound problems, Energydesk can reveal.

Last month a New York Times investigation chronicled the spiralling costs, missed deadlines, technical issues and administrative chaos at Southern Company’s coal gasification facility in Mississippi.

The Kemper project, as it is called, is currently more than $4 billion over budget and more than two years late, with Southern now promising it will begin delivering ‘clean coal’ power no later than September 30th.

Engineers who have worked on Kemper expect the project’s Kemper’s start-date to be delayed yet again — until 2017.

Dodgy deal

A new look into Southern’s PR operations over the past few years suggests that selling the technology abroad was central to the project’s business model, and the company pursued that in spite of the mounting problems.

In December 2015 the company announced that it had signed a letter of intent with South Korean firm Alps Energy to “evaluate the deployment” of the Kemper technology at one of its power plants.

By this time, Southern was well aware of the crisis unfolding at the plant.

But the South Korea deal has been perhaps the most concrete success of the global ‘clean coal’ offensive, standing out among Southern’s attempts to hawk the technology in Poland, Norway, China, Romania, Serbia and Australia.

nytimes

New York Times

Dirty secrets

To understand just how important the international sales element was to Southern, you need look no further than a 2008 memo from Mississippi’s then-Governor Haley Barbour in which he describes the project as a “key piece of America’s and the world’s energy future”.

Less than a year later the company touted a deal with China for its clean coal technology – a proprietary process called TRIG (transport integrated gasification) – even though Kemper hadn’t even broken ground.

Around this time Southern CEO Tom Fanning wrote to the Energy Secretary urging him to divert focus from the bigger FutureGen CCS project in Illinois (the government pulled the plug in 2015) because Kemper was “now ready for commercial deployment” — and that it was being discussed for licensing in China and Australia.

That didn’t end up happening.

Hidden crisis

By 2012, Southern’s subsidiary Mississippi Power had already concealed cost overruns of $366 million, and a year later admitted the project was $1 billion more expensive than anticipated.

In late 2013, an earnings call revealed massive losses and serious delays, with Fanning admitting that they “made a mistake on the engineering”.

The scandal had already cost the jobs of two of Mississippi Power’s top executives, including president Ed Day.

That, however, didn’t stop Southern and the US Department of Energy from taking Norway’s minister of petroleum and energy, along with seven other energy ministers, on a tour of the facility a month later.

Hey Poland

In 2014, months after a whistleblower told Southern officials – including Fanning – that the company had broken the law and misled investors over its false schedule and budget, a top executive flew to Poland for the Wroclaw Global Forum.

There, Karl Moor tried to sell the country on the Kemper technology, claiming the plant was already running and “utilising 65% of the CO2 and sending three and a half million tons of CO2 down a pipeline for enhanced oil recovery” — things that still haven’t actually happened.

“Our first response should be to get Poland the technology so that they can use their native lignite in a strategic way,” Moor said.

“For some reason the Department of Energy for the last 20 years has been helping us develop a technology aimed at Poland’s coal,” he added.

Six months later Fanning and the US Energy Secretary were doing the same thing in Turkey.

Consequences at home

As Southern eyes international deals, the deeply deprived Mississippi county of Kemper wrestles with the plant’s unfulfilled jobs and tax promises.

As Fanning spoke in Philadelphia at the end of July, reaffirming the project’s September 2016 start-date, Kemper residents were called to an emergency meeting on a proposed 41% tax hike to pay the county’s crumbling schools.

The region’s public services have been starved of revenue as long-time homeowners were forced to move in order to make room for the facility’s gigantic footprint.

DeKalb, the town nearest the plant, had to eliminate its police department due to a lack of money.

And, if Southern sells its clean coal technology abroad, the County does not stand to receive any of the proceeds — as per the government agreement.

We got in touch with Southern Company for comment and will update this piece if they get back to us

Miserable failure at Kemper “clean coal” plant indicates future failure of “clean bioenergy” climate solution

The Kemper Project under construction. XTUV0010, CC BY-SA 3.0Bioenergy with Carbon Capture and Storage (BECCS) was granted a huge boost of support by the IPCC’s “mitigation” Working Group in their 5th Assessment Report. Since then growing attention has been given to this technofix as the main approach to removing CO2 from the overloaded atmosphere. This is in spite of the fact that there are currently no operating commercial-scale BECCS projects*, and there is ongoing serious debate over the climate and other impacts of all large scale bioenergy. There are also serious concerns about costs, feasibility and safety of underground storage.

Perhaps the best indication we have for the feasibility of large scale BECCS, which the IPCC is relying on to avoid catastrophic climate change, is the current generation of coal CCS projects. These have been under development for many years under the popular guise of “clean coal”.

On 5th July the New York Times provided a disturbing evaluation of the Kemper “clean coal” plant in Mississippi, USA, a hugely over-hyped and over-priced energy project that industry and policy-makers claim to be a solution to climate change, despite mountains of evidence that it is only making matters worse.

Kemper is one of several such projects. SaskPower’s Boundary Dam facility in Saskatchewan, Canada, is supposedly the first commercial-scale coal CCS plant in the world. It sends some CO2 to an oil field, which is then used to pump out otherwise inaccessible oil reserves, called “enhanced oil recovery”. They are actually paying fines to the oil company for failing to deliver the contracted amount of CO2. How this project is billed as a “solution” to climate change is baffling.

FutureGen in the USA is another project – an integrated gasification combined cycle (IGCC) coal power station with CCS that collapsed after over $175 million had been spent. Then came FutureGen 2.0, a scheme to retrofit an old coal plant like the Boundary Dam with CCS, which suffered the same fate after over $200 million of public money had been spent.

Then there is the White Rose project in the UK. It would have been the first new coal plant to be built in the UK since the 70’s, coming right at the time when coal is supposedly being phased out. Developers went even further in their rhetoric, saying that this would be the first “negative emissions” plant in the world, since it would burn some biomass in the mix. The argument is that all bioenergy is “carbon neutral”, so capturing the CO2 would render it “carbon negative”. Yet the project was to source coal from mines in Colombia and Russia that have resulted in violent conflict with communities, and wood from the Southern US, where the world’s most biodiverse temperate wetland forests are being felled and turned into wood pellets. Coal mining and deforestation cannot be “solutions” to climate change. Thankfully the project collapsed, after millions had been spent on feasibility studies.

Billions in public funds are being spent on these horrendously misguided projects, money that could be allocated instead to genuine attempts to reduce emissions and restore ecosystems. These projects are giant infrastructure projects that are pitched as progressive and innovative solutions to climate crisis, but in reality are a part of the problem, and always result in more damage and emissions once you peel back the greenwash.

Applying CCS to coal plants is simply a desperate attempt to throw a lifeline to an industry that should have been ended years ago. But the impacts of coal mining, the fact that mining itself is inherently polluting and destructive, and invariably results in harm to the communities near to it or displaced for it, is never a consideration.

The Kemper “clean coal” plant must now take first prize as the biggest failure of these projects. Regardless of whether it is ever finished and operates satisfactorily, it has failed before ever being switched on. The New York Times’ detailed and shocking article lays bare the level of corporate wheeling and dealing at Kemper. The article is based of the account of a whistle-blower, who is a former employee at the plant. We really recommend that this article is read.

The massive failure of “clean coal” projects like Kemper and the others described above are a clear warning for the future of BECCS. BECCS is touted as a means of delivering negative emissions based on entirely faulty carbon accounting that assumes all bioenergy – even cutting down forests to burn in coal plants – is “carbon neutral”, and that capturing the carbon will miraculously result in the removal of CO2 from the atmosphere. BECCS has long been discussed in climate geoengineering debates, where it is presented as one of the more “benign” or “soft” approaches to tweaking the climate (at least in comparison to spewing sulphate particles into the stratosphere, or dumping iron into the ocean).

Now climate scientists within the IPCC Working Group 3, largely dominated by economists rather than experts on energy technologies or ecology, have promoted the whole concept of BECCS as “essential” to stabilising our climate. Promoting technofixes that are currently non-existent, and for which we have very clear indications they can never work, is nothing short of grossly irresponsible.

 

* Except for one plant in Illinois, USA, that captures some CO2 from ethanol fermentation. This is being called BECCS and “negative emissions” by industry proponents. However, not even the plant’s operators claim that it achieves negative emissions, as the emissions associated with ethanol production outstrip what is being captured.