Carbon Capture and Sequestration Activity Heats Up for Southern Company

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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--As the Obama administration's massive federal energy bill continues its rapid movement through congressional committees, the Southern Company (NYSE:SO) (Atlanta, Georgia) has announced its participation in two carbon-capture initiatives.

Southern Company and Mitsubishi Heavy Industries Limited (TYO:7011) (Tokyo, Japan) announced plans in late May to build an amine-based carbon capture and sequestration (CCS) demonstration project that would capture carbon dioxide emissions from about 25 megawatts (MW) of Southern's coal-fired power plant near Mobile, Alabama. The project would begin operating in 2011. Southern officials would not provide cost estimates for the project, nor would they say when construction would begin.

The demonstration project, located at Plant Barry, a seven-unit, 2,525-MW generating station, will capture and sequester in a saline aquifer an estimated 125,000 tons of carbon dioxide annually over a four-year period, according to testimony given May 14 by Karl Moor, a vice president of Southern, before the U.S. Senate Committee on Natural Resources. The Electric Power Research Institute and the U.S. Department of Energy (DOE), among others, are partnering with Southern and Mitsubishi on this project.

Moor also told the Senate committee that Southern had a "further goal of developing a larger scale-up of this sequestration project that would feature the injection of 1 million tons of carbon dioxide per year for at least 4 years" into saline reservoirs in the Gulf Coast region.

Funding for this scale-up project, which will be 170 MW in size, was being sought from both the restructured FutureGen competition and the U.S. DOE's clean coal program, Moor said. Earlier this month the U.S. DOE announced it was reviving the long-stalled FutureGen project in Mattoon, Illinois, which the Bush administration had initially funded, but then suspended. It is not clear how the DOE's decision regarding funding for the FutureGen project, announced after Moor's testimony, could affect Southern's 170-MW CCS scale-up project.

The carbon capture technology to be used in the 25-MW demonstration project, called KM-CDR, was jointly developed by Mitsubishi Heavy Industries and The Kansai Electric Power Company Incorporated (TYO:9503) (Osaka, Japan), Japan's second-largest electric utility.

This technology has been proven on a smaller scale at a coal-fired power plant in Japan, and in commercial-scale natural-gas-fired power plants around the world, according to Southern. The 25-MW demonstration project would represent the largest coal-fired demonstration of this technology, the company added.

In a separate announcement also made in late May, officials at Southern and the DOE announced the creation of a new National Carbon Capture Center (NCCC), which will be operated and managed by Southern at its research and development complex near Birmingham, Alabama. The NCCC is expected to be fully operational next year.

The research facility will test various carbon-capture technologies, both post-combustion and pre-combustion, on a large enough scale to provide meaningful data and insights under real operating situations, DOE said. It estimated that the NCCC will create or sustain nearly 170 jobs during its five-year lifespan.

In addition to DOE and Southern Company, current participants in the NCCC project include: American Electric Power (NYSE:AEP) (Columbus, Ohio); Luminant, a unit of Dallas-based Energy Future Holdings, the privately held successor company to TXU; the Electric Power Research Institute; Arch Coal (NYSE:ACI) (St. Louis, Missouri); Peabody Energy Corporation (NYSE:BTU) (St. Louis, Missouri); and RioTinto plc (NYSE:RTP) (London, England). The center anticipates adding more partners as its work progresses, the DOE said. According to the DOE, overall funding will exceed $251 million over a period of five years. About $201.2 million will come from the DOE, and the participants will contribute about $50.3 million.

Southern Company operates more than 21,000 MW of coal-fired electric generation, which burns 75 million-80 million tons of coal per year, the company said. About 68% of the electricity produced each year by Southern's operating companies comes from coal.

Like many coal-burning utilities, Southern officials have stressed the importance of a balanced U.S. energy and environmental policy, one based on resource diversity and technological flexibility. About 50% of U.S. electricity comes from coal. Southern Company and other utilities see the various technologies for carbon capture and sequestration as critical aspects of a bridge to a cleaner energy future.

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