Trailblazer Energy Center

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The Trailblazer Energy Center was a supercritical coal plant proposed by Tenaska Inc to be built east of Sweetwater, Texas, USA. In June 2013, Tenaska announced that the project, along with its proposed Taylorville Energy Center in Illinois, was being cancelled. The company cited cheaper natural gas, falling prices for alternative energy, and uncertainty over state and federal energy regulation.[1]

Background

The company has stated that the proposed plant has been designed to capture 85 to 90 percent of the CO2 produced from combustion and deliver it by pipeline to Permian Basin oil field for use in enhanced oil recovery. The gross rating of the project is 765 megawatts (MW), but the power demands of the Carbon Capture and Storage technology lower the net capacity to 600 MW.[2]

In January 2012 the company estimated that the plant would cost USD$2,800,000,000 to USD$3,300,000,000 for the coal plant plus the CCS unit. Tenaska also stated that "owner’s costs, interconnects, financing fees, and interest during construction" were estimated to cost "an additional USD$1,000,000,000 to USD$1,250,000,000." The all up cost is therefore estimated to be between $3.8 billion and $4.55 billion.[3]

In December 2010 Tenaska received its air quality permit from the Commissioners of the Texas Commission on Environmental Quality. The company stated that "Trailblazer’s air quality permits are required in order to begin construction on the power plant. However, a number of other tasks and contracts must be completed before construction can begin, including engineering and design studies, securing customers for the electricity and CO2, and securing state, federal and local incentives designed to encourage development of carbon capture and storage projects."[4]

Despite regulatory approval, Tenaska is holding back from the project. In January 2012 the company submitted a report to the Global Carbon Capture and Storage Institute, an Australian government-funded agency. In its report Tenaska stated:[5]

"One of the well-known challenges with CCS is the cost – primarily in terms of the capital cost and energy consumption. Under current market conditions, power plants with CCS cannot compete with those without CCS. The strategic location of the Project provides the ability to sell CO2 into the mature Permian Basin EOR market. This defrays some of the costs of CCS. However, the current CO2 market prices are insufficient to cover the entire costs of CO2 capture. In addition, the CO2 prices vary as a function of oil prices, which introduces uncertainty in this revenue stream over the life of the Project."
"Thus, the Project requires some recognition of the value associated with capturing CO2 in order to be economic. With the status of the USA political climate (which is notably different than in 2007 when Tenaska launched the Project) the timing for such recognition and, thus, further Project development, is uncertain. As such, on the engineering side, the Project is currently in the documentation stage and will undergo only very slow development until the key Project signals change. Overall project development will continue to advance in the areas that are required to maintain an “early mover” position. Some of these areas include water supply, maintaining the air permit, lobbying, legislative support, and local community interaction on the Project."

Towards the back of the report, Tenaska states that "Tenaska placed the PC Plant [Pulverized Coal] FEED [ front-end engineering and design] study on hold at a stage of partial completion. During the CC [carbon capture] FEED, this created challenges in defining interactions between the two plants. Before the next phase of study for the CO2 capture plant, the PC FEED study will need to be completed."[6]

The company also stated that "upon completion of the FEED study, Tenaska will update Project economics using the FEED study cost and performance results. The economic modeling will formally confirm the current economic challenges facing the Project. As a result, Tenaska will focus on the following to maintain the first-move status, including:

  • Monitor federal carbon capture incentives/legislation/regulations;
  • Maintain / progress environmental permits – key permits would include storm

and treated wastewater discharge (if required);

  • Continue sourcing water supply opportunities; and
  • Continue dialogue for off-take agreements.

Upon a change in these key areas, Tenaska will revisit the Project economics. When the economics are favorable (emphasis added), Tenaska will engage Fluor to plan for completion" of updated engineering and cost estimates.[7]

Another indicator that the company has put the project on the back-burner is that the last media release issued by the company on the project was December 2010.[8]

Project Launch

Tenaska announced the project -- dubbed by the company as the "Tenaska Trailblazer Energy Center" -- at a media conference held on February 19, 2008 at Texas State Technical College, West Texas. Speaking in support of the proposal were Sweetwater Enterprise for Economic Development Executive Director, Ken Becker; County Judge Tim Fambrough, State Representative, Susan King; Tenaska Manager of Business Development, Helen Manroe; and Tenaska Vice President of Environmental Affairs, Greg Kunkel.[9]

On the same day as the announcement, Tenaska filed an application for an air permit with the Texas Commission on Environmental Quality. "The final decision to proceed with the project will be made in 2009 based on a number of factors, including the availability of local, state and federal incentives; final project cost estimates; and projected market prices for electricity and CO2. Current estimates of these factors make the project appear to be economically feasible," Tenaska stated.[10]

The company stated that "construction could begin in late 2009 and be completed in 2014."[10] On the day of the announcement, Environmental Defense Fund (EDF) issued a statement of qualified support for the project. "We look forward to discussing with Tenaska ways to make legally binding the promises they have made concerning the capture and storage of their carbon dioxide emissions so that we do not oppose their applications for a permit," EDF's director of the Texas Regional Office, Jim Marston, stated.[11]

In March 2009, Tenaska CEO David Fiorelli said the company is waiting to see what cap-and-trade legislation or other measures Congress implements before going ahead with the project. The plant will use about 25 percent of its energy to capture and compress carbon dioxide. Adding carbon capture equipment will increase the project costs by 40 percent. Given these figures, "there has to be a pretty compelling economic reason that you would want to use 25 percent of power and increase your capital cost so substantially," Fiorelli said.[12]

It was announced in July 2010 that Fluor would be supplying the Trailblazer Energy Center with the company's carbon capture technology. The power plant is designed to capture 85 to 90 percent of the carbon dioxide (CO2) emissions and send it through a pipeline to be used in enhanced oil recovery. The company stated that it had done all of the initial design and engineering work on Trailblazer and is the project’s construction contractor.

Tenaska received an air permit for the power plant in December 2010. Earlier in 2010, the Environmental Defense Fund dropped its opposition in the TCEQ permit case after Tenaska agreed to limit water use and to sequester most CO2 produced by the plant.[13]

Coal supply

Tenaska stated in January 2012 that sub-bituminous coal for the project would be supplied from an Arch Coal's [Powder River Basin]] mines under a 20-year agreement.[14]

Funding

Tenaska moves forward with DOE funding

On March 3, 2010 Tenaska announced that its Taylorville station would cost $3.5 billion and would go on-line in 2014. The plant would burn coal to produce syngas. The company stated that the plant would be a "net reducer" of CO2. The plant plans to use carbon capture and storage to displace up to 50 percent of its CO2 emissions. Tenaska also said it still needs Illinois environmental regulators to issue an air permit as well as the U.S. Department of Energy, which agreed to give the project a $2.6 billion loan guarantee, to complete an environmental review of the proposed project. The facility will be located on a 713-acre site near the town of Taylorville, which is located approximately 35 miles southeast of the capital of Springfield.[15]

Arch Coal Financing

On March 12, 2010 it was announced that Arch Coal purchased a 35 percent minority equity stake in the developing Trailblazer Energy Center. Arch stated that they will supply Trailblazer with its fuel needs for its first 20 years of operations. Coal burned in the plant will come from Arch's mines in the Powder River Basin. Arch believes that the plant will eventually utilize so-called "clean coal" technology. In 2009 Arch donated $1.5 million to the University of Wyoming for research on carbon sequestration.[16]

Tenaska receives $7.7 million from non-profit carbon capture group

In October 2010 it was announced that Tenaska will receive $7.7 million in grant money to be used for an engineering design study of carbon capture technology in its proposed Trailblazer plant. The money is coming from the Global Carbon Capture and Storage Institute, an Australia-based organization that receives financial backing from the Australian government. The not-for-profit organization’s membership includes the governments of the United States and more than a dozen other nations, as well as companies in the coal and power industries, including Tenaska. The grant “provides international recognition of the really pioneering role that Trailblazer is expected to play to reduce carbon emissions,” said Helen Manroe, Tenaska’s manager of development.[17]

Tenaska’s Trailblazer is one of six projects to receive funding from the institute in awards. The only other American project to receive funding is another Tenaska effort, a plan still in its early stages to retrofit with carbon capture technology a coal-fired power plant in Louisiana.[17]

April 2010: EDF OKs Plant

In April 2010, the Environmental Defense Fund announced, alongside Tenaska Energy, that the group would not oppose the issuance of air quality permits for the Trailblazer Energy Center, in light of the plant's "advanced environmental features." Tenaska and the Environmental Defense Fund signed an agreement under which the company agreed that the plant, which could open as early as 2015, will contain equipment designed to capture "at least 85 percent" of the carbon dioxide produced by the plant. Tenaska plans to sell the gas to Denbury Resources for "enhanced oil recovery" in west Texas oil fields.[18] The company also agreed to "limit" water usage at the plant to an average of 1 million gallons daily - two million gallons on days when power demand is especially high.[19]

October 2010: Judge dismisses chemical pollution concerns from carbon capture

After concerns raised by some environmental groups and a hearing in Austin in early 2010, state administrative law judges released an advisory proposal in October 2010 that called for Tenaska to lower its pollutions limits, with the judges citing lower pollution levels included in permits for new coal-fired plants elsewhere. The judges also recommended that additional pollution testing be done after emissions pass through carbon capture technology. The judges largely dismissed, however, the relevance of a Norwegian study cited by the Multi-County Coalition, who oppose the Tenaska plant. Wendi Hammond, a lawyer for the coalition, has said the research illustrated concerns about how chemicals known as amines—similar to ammonia—used in carbon capture technology could react to form harmful pollution. In the Austin hearing, an expert witness for Tenaska, toxicology consultant Paul Greywall, testified that other research found no such cause for concern about harmful pollutants coming from carbon capture technology. But the judges recommended pollution before and after emissions pass through the carbon capture process as a way to find out if the process results in higher emissions.[17]

July 2011: West Texas city allows Tenaska to purchase water

In July 2011 the City Council of the West Texas town of Stamford voted to allow Tenaska to buy the city's water. With Stamford's approval, Tenaska will now have access to approximately 250 million gallons of water a year. However, the company still needs to find hundreds of millions of gallons of water and needs to go through an appeal process on its air permit before construction of the plant can begin.[20]

PR Company Assisting Tenaska

Project Details

Sponsor: Tenaska
Location: Sweetwater, TX
Capacity: 765 MW (nameplate), 600 MW (net)[22]
Type: Supercritical with 85% - 90% carbon capture
Status: Cancelled

Citizen Groups

Articles and Resources

References

  1. "Developer pulls plug on Taylorville Energy Center," The State Journal-Register, June 21, 2013
  2. Tenaska Trailblazer Energy Center, project website, accessed May 2008
  3. Tenaska Trailblazer Partners LLC, "Final Front‐End Engineering and Design Study Report", Tenaska, January 2012, page 69.
  4. Tenaska, "Trailblazer Energy Center Receives Final Air Quality Permits: Permit Needed for Construction of One of First Carbon Capturing Power Plants in Nation", Media Release, December 14, 2010.
  5. Tenaska Trailblazer Partners LLC, "Final Front‐End Engineering and Design Study Report", Tenaska, January 2012, page 64.
  6. Tenaska Trailblazer Partners LLC, "Final Front‐End Engineering and Design Study Report", Tenaska, January 2012, page 62.
  7. Tenaska Trailblazer Partners LLC, "Final Front‐End Engineering and Design Study Report", Tenaska, January 2012, page 64.
  8. Tenaska, "Press Room", Trailblazer Energy Center website, accessed August 2012.
  9. Trailblazer Energy Center, "February 19th Trailblazer announcement", Trailblazer Energy Center website, accessed May 2008.
  10. 10.0 10.1 Tenaska, "Tenaska Proposes Nation’s First New Conventional Coal-fueled Power Plant to Capture Carbon Dioxide", Media Release, February 19, 2008.
  11. "Environmental Defense Welcomes Apparent Benefits of Capture and Storage Power Plant", Media Release, February 19, 2008.
  12. "Sweetwater coal plant ready for cap and trade rules," Standard-Times, March 30, 2009.
  13. "Tenaska clean-coal project gets Texas air permit" Reuters, December 14, 2010.
  14. Tenaska Trailblazer Partners LLC, "Final Front‐End Engineering and Design Study Report", Tenaska, January 2012, page 9.
  15. "Taylorville plant to cost $3.5 bln" Reuters, March 3, 2010
  16. "Arch Coal buys minority stake in Texas power plant" Business Week, March 12, 2010.
  17. 17.0 17.1 17.2 Jaime Adame, "Tenaska awarded $7.7 million in grant money" Reporter News, Oct. 12, 2010.
  18. "Company ties 2 planned power plants to emissions bill, financing" EE News, April 21, 2009.
  19. "Proposal for West Texas coal plant gets environmental group's praise" Star telegram, April 19, 2010.
  20. "West Texas city to give proposed coal plant water" Ramit Plushnick-Matsi, Associated Press, July 13, 2011.
  21. Tenaska, "Tenaska Proposes Nation's First New Conventional Coal-fueled Power Plant to Capture Carbon Dioxide", Media Release, February 19, 2008.
  22. "Development of the Tenaska Trailblazer Energy Center," Global CCS Institute, 2011

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