From: Reuters
Published November 14, 2007 06:09 PM

Southern Co scraps Fla. advanced clean-coal plant

HOUSTON (Reuters) - Southern Co and its partner have canceled construction on an advanced clean-coal power facility near Orlando, Florida, two months after breaking ground on the project, the companies said on Wednesday.

Citing uncertainty about potential state regulation on greenhouse gas emissions, Atlanta-based Southern Co and the Orlando Utilities Commission have scrapped plans for a 285-megawatt integrated gasification combined cycle (IGCC) facility at the Stanton Energy Center.

Instead, the partners will build a traditional natural gas-fired plant.

The $600 million Stanton IGCC plant is the fourth coal project in Florida to be dropped this year, but the first that was already under construction.

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A Southern Co spokesman said the possibility of an executive order from Florida Gov. Charlie Crist that would require power plants to capture and store carbon dioxide emissions "raised the level of risk" for the Stanton project.

Southern, which has been developing coal-gasification technology for a decade, continues to pursue advanced coal projects in other states, said spokesman Jason Cuevas.

The Stanton project was one of four selected by the U.S. Department of Energy under the President's Clean Coal Power Initiative, a $2 billion, 10-year effort to advance technology to meet growing demand for low-cost power and reducing carbon emissions blamed for climate change.

The IGCC process turns coal into gas for generating electricity, while significantly reducing emissions of sulfur dioxide, nitrogen oxides and mercury compared to traditional coal-fired power plants.

Last month, Crist said he did not favor construction of new coal plants in the state, but he stopped short of ruling out all new plants fired by the fuel.

"I'm not a coal fan, I'm just not. I really don't want it in Florida," Crist told the Reuters Environment Summit.

Crist has called on Florida's utilities to reduce greenhouse gas emissions to 2000 levels by 2017, to 1990 levels by 2025 and by 80 percent of 1990 levels by 2050.

TECO Energy's Tampa Electric utility dropped a plan to build a $2 billion IGCC expansion in October, citing regulatory concern and rising costs.

Earlier this year, Florida regulators denied a proposal from FPL Group, the state's largest utility, to build a $5.7 billion coal plant. Another plant was also scrapped.

Only a few coal-gasification projects are moving forward in the U.S., while several have been deferred along with numerous traditional pulverized coal-fired projects, according to government data.

Efforts to build a coal-fired plant with near zero emissions are now focused on FutureGen, a $1.5 billion public-private venture. FutureGen will test technology not only to gasify coal but to capture and store carbon dioxide underground permanently.

(Reporting by Eileen O'Grady; Editing by Marguerita Choy)

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