'Clean coal' plant for Jamestown boosted: State will support research, engineering

By David Robinson

Jun. 11, 2008 (McClatchy-Tribune Regional News delivered by Newstex) -- JAMESTOWN -- A proposed "clean coal" power plant in Jamestown got a boost Tuesday when the state agreed to provide nearly $7 million in state funding for research and engineering work needed to advance the still-developing technology that the plant would use.

The announcement by Gov. David A. Paterson signals the state's support for efforts to build "a new-age coal plant right here in Jamestown" that would use a new type of technology to reduce harmful emissions and potentially allow the carbon dioxide produced at the plant to be captured and safely stored underground.

Up to $6 million of the state funding would help pay for research and engineering work that the project's developer, the Jamestown Board of Public Utilities, needs to do to prepare a comprehensive proposal to win federal funding that is expected to become available for power plants using advanced coal technology.

"It means a lot to the Department of Energy, and nationally, that the state is stepping out so strongly behind this project," said David Leathers, the Jamestown utility board's general manager. "That's a difference maker."

Supporters of the Jamestown plant believe the project could help turn Western New York into a leader in the development of cleaner-burning coal technology, while also creating construction jobs and a potentially lucrative long-term source of business for the local operations of firms such as Dresser-Rand Group (NYSE:DRC) and Praxair.

Environmental advocates, however, criticized the state's backing for the $285 million project, arguing that the Paterson administration is investing in unproven technology at a time when the state is facing severe budget woes.

"It's like gambling with taxpayer money," said Jackson Morris, an air and energy program associate at Environmental Advocates, an Albany-based environmental group. "There's no guarantee that if we invest this money that the project will actually go forward."

Walter Simpson, the cofounder of the Western New York Climate Action Coalition, said the Jamestown municipal utility could meet its energy needs without building a new coal plant by investing in renewable energy, such as wind power, and also focusing on energy conservation.

"The plant's not needed," Simpson said. "There are cleaner alternatives, and, no matter how you look at it, it's going to be a very expensive plant, producing very expensive power."

The Jamestown project, which would generate about 50 megawatts of electricity, is less than one-tenth the size of the $1.6 billion advanced coal power plant that NRG Energy (NYSE:NRG) is proposing to build at the Huntley Station in the Town of Tonawanda.

That project won a statewide competition in the waning days of the Pataki administration in December 2006 to be the site for a new advanced coal plant that would replace the aging boilers at what environmentalists have criticized as one of the nation's dirtiest power plants.

But the state has stopped short of giving the project the go-ahead until additional funding, aid or cost savings can be found to make the electricity produced at the new plant competitively priced. NRG and state officials are continuing to work on ways to make the project economically viable, Paterson said.

Paterson said the state's investment in advanced coal technology in Jamestown could help make New York a leader in the development of a less-polluting method of producing electricity using the nation's ample coal resources. At a time when the economy is weak, Paterson said, the Jamestown project is a good use of state money, given the potential for new jobs should the technology prove to be successful.

The University at Buffalo also is interested in creating an education and research center in carbon capture and sequestration that would be associated closely with the proposed plants in Tonawanda and Jamestown.

The state funding will spearhead a research initiative by a group calling itself the Oxy-Coal Alliance that includes industrial gases firm Praxair, compressor manufacturer Dresser-Rand, Lancaster environmental services firm Ecology & Environment, construction services firm Foster Wheeler (OTCBB:FWLRP) (NASDAQ:FWLT) , Battelle Labs, UB and power plant operator AES Corp. (NYSE:AES)

The state also is providing an additional $800,000 to study the Southern Tier geology to determine whether the carbon dioxide that is captured at the Jamestown power plant could be stored safely and securely more than a mile below the Earth's surface.

"This really allows us to keep this team active with engineering and support" as the Jamestown utility board works on the application it expects to make for federal funding, possibly late this year or early next year, Leathers said.

The Jamestown plant would be a demonstration project for a coal-burning technology advanced by Praxair, known as oxy-coal. That process uses oxygen during the combustion process and recirculates the flue gas to remove contaminants.

By the end of the process, the remaining gas is largely carbon dioxide, which is believed to cause global warming. The carbon dioxide then could be captured and compressed before being transported by pipeline to an underground storage site.

The challenge, however, is that there currently is no economical way of sequestering carbon dioxide on a large scale. And the advanced coal combustion technologies also are in the development and testing stage.

"We think the technology will work," Paterson said. "Right now, the process is sort of expensive."

For the Jamestown plant to move forward and be economically viable, it also must receive federal funding for advanced coal demonstration projects through the Department of Energy. The next round of grants is expected to be awarded in mid-to late 2009. If the project receives the necessary funding and the required state permits, the plant could begin operation as early as 2013.

"They're looking for projects that are material and affordable," said Charles McConnell, a Praxair vice president. "To find that blend here in Jamestown is rather unique."

Environmentalists, however, said the plant is based on technology that is unproven and expensive.

drobinson@buffnews.com

Newstex ID: KRTB-0019-25912267