THE ENERGY INDUSTRY TIMES - AUGUST 2017 4 Americas News Southern calls time on Kemper gasifiers Siân Crampsie The USA’s first clean coal gasification plant with carbon capture and storage is unlikely to ever operate using coal as a fuel, it has been revealed. Regulators in the US state of Mississippi in June rejected a request by Southern Company for electricity rates to be increased in order to recoup the costs of building the over-budget, much-delayed Kemper integrated gasification combined cycle plant. Southern then announced that it would suspend operations and startup activities on the gasification portion of the Kemper plant, which has been operating as a combined cycle power plant using natural gas for almost three years. The move is a blow for clean coal proponents but has highlighted the difficulties of developing state-ofthe art clean coal facilities and the need for such plants in an era of low natural gas prices and strong growth in renewables. Mississippi regulators have also asked Southern Company for a proposal that keeps the plant operating as a natural gas fired combined cycle unit. Southern says that it still wants to recover some or all of the $3.4 billion of costs from the project. In a stock exchange filing Southern said that its subsidiary, Mississippi Power Co., “would be required to recognize a charge to income in the second quarter of 2017 for those unrecovered costs, in addition to any other costs required to be incurred”. Southern began commissioning the Kemper plant in late 2016, achieving first electricity the facility’s two gasifiers. However it reported problems with the coal gasifiers in June 2017 and said that the problems would take 18-24 months to repair. The 582 MW plant, initially projected to cost $1.8 billion, has so far run up a bill of over $7.5 billion in construction and engineering expenses. Southern has delayed full start-up of the plant at least five times in 2017 alone. Southern close to Vogtle takeover Siemens closing Southern Nuclear and Georgia Power are closing in on plans to take over the construction of two new nuclear units at the Vogtle plant in Georgia, USA. The two companies have inked a deal with Westinghouse, the project’s original contractor, to assume control of the engineering, procurement and construction (EPC) contract, and hope to have it approved by the start of August. Westinghouse filed for bankruptcy in March, throwing nuclear construction projects at Vogtle and at the V.C. Summer nuclear plant in South Carolina, into disarray. The new service agreement will give Southern Nuclear and Georgia Power EPC support as well as access to the intellectual property of Westinghouse needed for the expansion of Vogtle. It also includes ‘parental guarantees’ from Westinghouse owner Toshiba of $3.68 billion. The agreement will come into effect once all the necessary approvals have been obtained, Southern Nuclear said. These include approvals from the bankruptcy court, it added. Toshiba is expected to make an initial payment of $300 million to Georgia Power in October. In South Carolina, South Carolina Electric & Gas Company (SCE&G) said it had extended an interim agreement with Westinghouse in order to allow it to continue construction of units 2 and 3 at the V. C. Summer nuclear power plant while assessing its options for the site. Westinghouse is building two 1250 MW AP1000 reactors at the site, with operations due to start in 2020. Environmentalists have called on SCE&G to halt construction of the V. C. Summer expansion project because it is behind schedule and will prove expensive for consumers. SCE&G owns 55 per cent of the V. C. Summer project, while stateowned utility Santee Cooper owns the other 45 per cent. Santee Cooper is proposing two rate increases that would raise its customers’ monthly electric bills by an average of $12.30 by 2019, largely to cover financing costs for the reactors. Those increases, which still need final approval, would be in addition to rate hikes in 2016 and 2017. SCE&G’s parent company, SCANA Corp., has said abandoning the project is an option. CEO Kevin Marsh told commissioners in April that other options include finishing one or both reactors. Roughly one-third of the project is complete. Vogtle units 3 and 4 are expected to start operating in 2019 and 2020, adding 2.4 GW to Georgia Power’s portfolio. They will be the first in the USA to use Westinghouse’s AP1000 advanced pressurised water reactor technology. Ontario factory Dramatic changes and increasing competition in the global wind energy market has forced Siemens to announce the closure of its blade manufacturing plant in Ontario, Canada. Siemens Wind Power Limited, part of Siemens Gamesa Renewable Energy, said that the closure would affect 340 employees at the plant in Tillsonburg. “This was a very difficult decision that was taken only after assessing all the options,” said David Hickey, Head of the Siemens Gamesa Business in Canada. “The harsh reality is that, in order to remain competitive, we must constantly evaluate our global manufacturing footprint.” Siemens said that significant changes in global and regional markets, combined with physical limitations at the Tillsonburg plant, had driven the decision. Increased competition had driven a 66 per cent reduction in blade prices over the last seven years, while larger blade designs were increasingly in demand. “The significant investments necessary to bring the plant in line with current market requirements would result in costs that could not be competitive in the global markets,” Siemens said in a statement. Solar expands in Brazil Renewable energy capacity in Brazil is growing steadily and installed solar photovoltaic (PV) capacity is expected to achieve growth of over 300 per cent this year. According to the Brazilian Association of Photovoltaic Solar Energy (Absolar), installed PV capacity in Brazil will reach 1000 MW by the end of 2017, a 325 per cent surge over the end-2016 figure of 235 MW. The growth in PV capacity this year has been achieved thanks to investments of Reals4.5 billion ($1.3 billion), and the fact that the PV sector was not affected by Brazil’s economic crisis, Absolar said. Under Brazil’s recently-released 10-year energy expansion plan, the government shows that up to 13 GW of solar PV could be installed in the country by 2026. Overall, the energy expansion plan predicts that non-hydro renewable will account for 48 per cent of Brazil’s energy mix by 2026, and that installed capacity will increase by 64 GW to 212 GW. Funding outlined in the plan, published by the Ministry of Mines and Energy and Brazil’s Energy Research Agency (EPE), contain about $306 billion for the oil and gas sector, $114 billion for electricity, including hydropower, and $10 billion into biofuels. n Brazilian regulator Aneel has approved eight renewable energy plants with a combined capacity of 148 MW for commercial or test operations. The plants include the 29 MW Sao Vicente wind farm and the 30 MW UFV Lapa 2 solar PV farm. n Gasifiers hit problems in June n Southern to negotiate over cost recovery n 325 per cent growth in 2017-07-26 n MME, EPE publish expansion plan
Energy Industry Times July 2017
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