Duke Energy Indiana files cost update for IGCC plant
Duke Energy Indiana has said that design modifications and growth in the scope of its Edwardsport coal gasification plant under construction in southwest Indiana are projected to add approximately US$150M, or 6%, to the project's US$2.35B cost
Still to be determined is how much will need to be added over and above the US$150M as contingency funds necessary to complete a project of this size and type.
Duke Energy Indiana is asking the Indiana Utility Regulatory Commission to schedule a separate proceeding by next March, when most of the project's engineering will be complete, so that the company can provide a more detailed, revised cost estimate.
The company will use the next few months to examine future cost projections associated with labour, engineering, procurement and plant start-up. After next spring, labour costs will be a key variable driving the final project cost.
"We worked with General Electric, Bechtel and other design firms to perform an engineering study early on; however, as engineering progressed, the scope of the project has increased," said Duke Energy Indiana president Jim Stanley.
"The engineering has required more steel, piping, electric cable and other materials than originally expected," he added.
"Because this is the first time this technology has been used on this scale, there was not nearly as much guidance on size and quantity as there would be for a typical project with a design that had been constructed many times."
Previously, Duke Energy Indiana estimated the project would result in an average 18% customer rate increase between 2009 and 2013. By March, the company will file revised rate impact estimates.
The IURC granted the company permission in 2007 to construct the technologically-advanced clean coal power plant in Edwardsport, Ind. The commission will need to approve any cost increase for the plant. The project is scheduled to be completed in 2012.
The approximately 630-megawatt plant will use advanced integrated gasification combined cycle (IGCC) technology. The new plant will produce 10 times as much power as the existing plant at Edwardsport, yet it will emit less sulphur dioxide, nitrogen oxide and mercury than the much smaller plant it replaces. Due to the plant's superior efficiency, it also will emit 45% less carbon dioxide per megawatt-hour than the existing facility.
"The Edwardsport project is the first major new coal-fired power plant to be constructed in Indiana in more than 20 years," Stanley said. "It is key to modernising our Indiana generating fleet.
"Coal fuels the vast majority of electricity produced in this state and half of the power produced in the nation," he added.
"Coal gasification is a way to use an abundant, local resource and burn it cleanly with high efficiency. It's critical we find ways to further technologies like this."
