FutureGen Project Stopped

The FutureGen Project, a clean coal demonstration plant that would have included carbon capture and sequestration (and was #8 on My Top Energy Stories of 2007) has been cancelled. The culprit? Cost overruns of about 80%, and a lot of competing projects. It turns out that carbon sequestration isn’t cheap, and the DOE decided the price tag was too high for this project:

U.S. pulls the plug on funding for FutureGen

The Department of Energy on Wednesday officially quashed a $1.8 billion clean-coal project slated for central Illinois, leaving the experimental venture to capture carbon emissions dependent on Congress for survival.

The FutureGen Industrial Alliance was cooperating with the Energy Department to develop a coal-fired power plant designed to gasify and store carbon emissions deep within the Earth, a process known as sequestration. But the Energy Department withdrew its support because of ballooning cost estimates on what was initially supposed to be a $1 billion project.

The surprise move transformed a short-lived celebration after Mattoon, Ill., was selected last month as the plant’s home into a legislative battle, once the Bush administration chose instead to spread funding across multiple facilities planned nationwide.

Carbon sequestration, however, is certainly not off the agenda:

During a conference call Wednesday, Deputy Secretary of Energy Clay Sell said circumstances have changed since the program’s conception in 2003, noting there are 33 applications to build similar coal power plants. Under the new plan, the Energy Department would fund the capture and storage of carbon emissions, while utilities cover the cost of power generation. The Department of Energy estimated the new plants would join the grid starting in 2015.

FutureGen executives were confused by the decision:

Department of Energy officials in April expressed reservations about rising costs, leading to a series of meetings with FutureGen executives that failed to produce a meaningful conclusion. Mudd said his organization does not understand the rationale behind the Energy Department’s announcement, noting that its decision squanders four years spent reviewing the science and regulatory framework in a historically unprecedented effort.

It’s not so hard to understand. When you have huge cost overruns, you run the risk of having your project cancelled. It’s the same in industry. I know it is very easy to underestimate project costs, because I have seen it done again and again. That’s why I always take those claims of “We will produce (ethanol, biodiesel, gasoline) for less than $1/gal” with a big grain of salt.

44 thoughts on “FutureGen Project Stopped”

  1. That’s why I don’t count ’em until they are sold to an end-user.

    Certainly it’s fun to keep an eye on future promises, but they aren’t chickens until they are hatched.

  2. I have some contacts with one of the partners in FutureGen. They are very disappointed. Their perspective is that government bureacracy and procurement rules were driving a good deal of the cost overruns.

    From a taxpayers perspective, this seems a very expensive demonstration plant. CO2 sequestration will go ahead without it. DOE is looking at modifying existing units to capture CO2. There are several power plants in Illinois or eastern Indiana that could be retrofitted.

    Back in the 1980s DOE held a similar contest for the supercollider. It came down to Texas and Illinois, Illinois won and the project got cancelled for cost overruns. It is deja vu all over again.

  3. Having run a small furniture manufacturing shop, and having planted eucalyptus farms, I can vouch: Add up your anticipated costs, then double, when you start.
    On the other hand, one tends to get better and better over the years, and costs per unit start going down.
    I do worry some start-ups are being thrown out with the bathwater.
    In capitalism (the best system, IMHO) there is a chicken-and-egg problem. Why research something that can’t make money, but something cannot make money until it has been researched and developed and commercializd.
    But, in the long-run, problems do get solved.

  4. Wind and Solar-thermal are hatched chickens too

    Unless there’s some difficulty with it I don’t know about, it seems to me hot-rock geothermal should also be in that category.

    Somebody (RiceFarmer, maybe? can’t remember who) posted here recently about how $95 oil has things troubled just beneath the surface in Japan – but it seems to me that, aside from Iceland, there’s no country better positioned to go geothermal in a big way (assuming that seismic activity is a good predictor of a region’s geothermal resource).

    And what seems particularly attractive about geothermal is that NIMBYism potential should be at an absolute minimum: no emissions (unlike coal or NG), nothing visible above the horizon (unlike wind), no possibility of radiation or catastrophic accident (unlike nuclear), minimal above-ground real-estate needed (unlike solar), and nice stable baseload capacity with technology already available and in commercial use today (unlike wind/solar).

    Add those up and it seems like you could put geothermal generating stations right in the heart of cities, right where generating capacity is most needed, and VASTLY reduce both transmission loss and the need for any additional powerline infrastructure.

    It seems like such a slam-dunk that it makes me wonder what I must be missing! Why aren’t countries like Japan pursuing this in a huge way right now?

  5. Heh, I should not have forgotten geothermal when it generates 11% of my power. In fact it dwarfs solar and wind for my region (Southern California Edison). Fractions of my supply:

    1% Solar
    1% Small Hydro
    2% Biomass & waste
    3% Wind
    9% Large Hydro
    11% Geothermal
    18% Coal
    22% Nuclear
    33% Natural Gas

  6. SaskPower’s clean coal project was also shelved last year after the initial study re-projected the cost at $3.8 billion. The original estimate was $1.5 billion.

    Either cost is irrelevant, there is approximately 2.6 billion tonnes of lignite coal here. Without something forcing carbon sequestration, there is no reason to spend any extra capital over expanding traditional coal fired plants.

    The company I used to work for sponsored Al Gore to come up here and speak last year. He soaked us for $250k for a couple of hours and denied any media coverage that he wasn’t getting paid for. If he actually was interested in spreading his global warming message, disallowing any news coverage wasn’t a good move locally. The general consensus was that he had a quaint dog-and-pony show out to make a buck and that killed whatever good he could have done. It was -52C with the wind chill this past Tuesday… that makes “Global Warming” a tough concept to sell to the locals. Dog The Bounty Hunter did a show here and got better public opinion for what he had to say and his work with youth.

    Anyway… Al got his money, Saskatchewan promptly ignored him and my brother-in-law is still running the big digger at Poplar River, feeding into a traditional coal plant built in the 1980’s. The power company isn’t going to pay for sequestration and 3.8 billion is a substantial expenditure on a population of 1 million.. the public isn’t going to fund it either.

  7. ==Nuclear power – ’nuff said.==

    The problem being Nuclear power costs just as much as FutureGen.

    FutureGen was canceled because it was pushing $6500/KW cost.
    greyfalcon.net/costlycoal2

    $4000-$6000/KW for Nuclear is similarly stupid.
    greyfalcon.net/costlynuclear
    greyfalcon.net/h2nuke
    greyfalcon.net/nuclearvideo

    SolarThermal/Geothermal/Wind/CIGS-Solar is shooting for more of the $2000/KW range.
    (i.e. Competing with cost of fully amortized existing US coal plants that don’t follow the new clean air regs)

    Like FutureGen, Nuclear is just too damned expensive.

    (And before you mention France, England, Russia, or China, those nuclear power plants are all operated by federal monopolies. So the “market” doesn’t even really come into play.)

  8. Al is a bad man, therefore there is no AGW … I think we covered that.

    (For the record, I will not turn down $250k lecture fees. It will be amusing to see the deniers line up next and claim they’d leave that on the table.)

  9. Off-topic, but I would like to hear who you all think the next president is going to be. Personally, I think Hillary’s goose is cooked.

  10. I didn’t say I had a negative opinion of Al or that I don’t believe AGW is a serious issue. I would be willing to personally pay a substantial amount for clean power. I have put a lot of personal effort and a fair bit of cash into developing my ideas around renewable energy.

    I’m not in the majority. If you asked most local residents if they were willing to pay $10,000 per household for a new carbon sequestration coal power plant, they would say “No, my power bill is too high now”. They also think that the phone bill is too high and the phone company sponsoring Al was a waste of money.

    I also wouldn’t take $250k to do a powerpoint presentation on a topic that is a moot point. But again, I’m not in the majority.

  11. If someone would pay me $250K even once I’d do a PowerPoint show on AGW. I think Rohar’s point was that Gore tells us he wants to raise awareness about AGW but when given the opportunity to generate publicity he chose not to. That does call in to question his motives.

    You can’t compare FutureGen at $6500/kW to wind or solar without figuring in the cost of backup power. Unless of course you don’t need electricity when the sun doesn’t shine and the wind doesn’t blow.

  12. Heh, Al had a big year building huge public awareness. I don’t think he lacked in 2007 for media access.

    Kinda funny in fact to suggest that a guy who made dozens of TV appearances and scored a Nobel was not using his time wisely.

    On:

    You can’t compare FutureGen at $6500/kW to wind or solar without figuring in the cost of backup power. Unless of course you don’t need electricity when the sun doesn’t shine and the wind doesn’t blow.

    Sure, there is an upper limit to what you can do with wind and solar, but at 1-2% we aren’t close to it in CA.

  13. Yeah, but he’s always playing the same, stiff character. I want to see Al Gore team up with Jackie Chan and Chris Tucker to stop AGW in Rush Hour IV.

  14. Odograph: Al is using his time wisely. His time and his money are very precious to him. The event was well promoted, but he blocked televising any portion of his presentation, not advertising the event. This was debated in the legislature. If you didn’t have the $50-$75 to hear his message, you could go on greenhouse gassing to your heart’s content for all Al cared. I think he deserved the Nobel and an Oscar, but he definitely didn’t get the locals convinced we should quit burning coal.

    Anyway.. Google understands this with their Renewable Energy Cheaper than Coal (RE<C) initiative. I understand this with a very long term outlook with the SHPEGS project. Renewables have to be base load reliable, safe, location independent and cheaper than coal to succeed. The personal pocketbook prevails over things that are good for the environment in the majority, and that makes Al’s message good to hear but useless to everyone but him.

  15. “If you didn’t have the $50-$75 to hear his message, you could go on greenhouse gassing to your heart’s content for all Al cared.”

    That’s a very odd interpretation.

    … maybe Gore assumed they’d catch him on Leno (or Ellen).

    (I’m confused by this “$50-$75” element. If the organizers were trying to recoup their $250K, they might very well frown on Al diluting their offering.)

  16. … its decision squanders four years spent reviewing the science and regulatory framework …

    “regulatory framework”. Remember Superfund? — the big government plan to clean up toxic waste sites. Spent billions of dollars — most of it on lawyers, not so much on actual clean up.

    Can’t drill for oil & gas hardly anywhere. Hard to find a place to put a wind turbine. Destructive forest fires every year because the forests can’t be thinned. Can’t build a nuclear power plant. Now can’t even do CCS.

    Someday, as a society, we are going to have to make a choice: do we use our limited resources to pay for lawyers yakking, or do we use those resources to do something constructive?

  17. Offshore ocean wave energy conversion (OWEC…always with the acronyms) is the best of all possible worlds in the “green alternatives”. It has ten times the energy density of wind, it is essentially large wind power captured over a giant expanse, and it doesn’t disappear, doesn’t stop making electricity when the sun goes down. Go far enough offshore and you do not have permitting, sea creature interference (virtual bio-desert) nor are you creating a huge eyesore, displacing what is in place (as with these gigantic mega-arrays with solar.

    Key needs:(1) robotic maintenance and construction, not a single human leaves dry land (2) tension leg circular platform rings 20 meters beneath the waves (3) aggregating the wave power mechanically BEFORE converting it to electricity. Too many current ideas use a lot of copper, magnets, and transmission lines. That has to be re-thought.

    Look at how ridiculous the first successful steam engine looked compared to seventy years later. IMO the current expensive systems are way way too overbuilt.

  18. “Somebody (RiceFarmer, maybe? can’t remember who) posted here recently about how $95 oil has things troubled just beneath the surface in Japan…”

    Yes, that was me, and the situation is serious. Subsidies to the rescue.

    Now on geothermal, it is often said that Japan has good geothermal resources, as evidenced by all the hot springs. But those hot springs are consuming so much of that resource that it’s running out in some areas. The prefecture (state) where I live is famous for its hot springs, but now they have trouble maintaining water temperature. Three years ago my own municipality spent a fortune drilling and building a bathing facility. Last year the temperature fell, and it was downgraded to a “mineral spring.” The water has to be heated for bathing. The bottom line is that there is only so much hot water to go around, and a lot of it is already used by hot springs. So, although I have no statistics to offer you here, my subjective assessment is that large-scale geothermal use would be much facilitated by curtailing hot spring use, but who’s going to agree to that?

  19. Some of you are probably aware of the debate now raging in Japan over the gasoline tax. Yesterday on the radio I listened to lawmakers duke it out in the Diet (parliament). One side says that the price of gas (about to rise again) is killing the household finances of the middle class, and so the tax must be allowed to expire on March 31. The other side says that the tax is needed for road construction and maintenance. Both sides are right. This is the Catch-22 relationship between fuel taxes and road maintenance. Discontinue the tax and you can keep people on the roads, but you can’t maintain them. Continue the tax and you can maintain the roads, but people can’t afford to drive on them. At the end of the debate the argument had gone nowhere.

  20. Road taxes do offset maintenance, but if the true initial cost of roads as well as their maintenance (this includes law enforcement and those types of services) it is estimated that the added “tax” to fuel users would have to top $12/gal in taxes alone.

    Much of the infrastructure is paid from the general tax fund here in the USA. Look at the signboards posted on many CalTrans projects and staggering sums come from the feds.

  21. Scott makes a good point, and that in fact buttresses my argument that people do not realize the true cost of maintaining the infrastructure for motor vehicle transport. That is why merely coming up with the energy for vehicle propulsion will provide only part of what is needed to keep the car culture running.

  22. Odo – look who else has an IMDB page: Ann Coulter and Newt Gingrich

    My point on solar/wind vs. baseload power generation is that it is an apples to oranges comparison. Proponents of alternatives like to point out the cost per kWh but forget that these sources don’t run 24/7. What works for a few percent of the power load won’t work for 20 or 30%.

    The other problem is dispatching. Every power generator wants to be dispatched at 3pm on a hot July afternoon when prices are at their peak.

    There is no offshore power grid, and subsea transmission lines are very expensive. Offshore wind/wave power might serve some niche markets (Cape Wind comes to mind πŸ™‚ but at best can only be a small part of the solution.

  23. King of Katy echos what would have been my response re. wind and solar. They’re helpful but they can’t be the main part of the answer. Re. ocean power, I’ll believe it when I see it. Aside from the logistics of running all the physical plant back to shore, I’d wonder what the scale would have to be and what ecological impact would be. Re. GeoThermal, there aren’t a lot of great natural sites, certainly not enough to meet our needs. Artificial GT using oil-drilling technology is intriguing but likely to be costly. Also the heat differential being exploited aint huge. Finally, note that hot-rock GT is not renewable on human time scales – it amounts to mining heat from the rock, and once it’s tapped out, it won’t warm back up in less than geologic timescales. Re. nuclear power, sorry if I don’t buy the usual anti-nuke FUD regarding costs. Our remaining nuke plants are among the cheapest sources of electricity we have right now, next to coal. France is making a go of nukes. Cost alone can’t be the determining factor anyway – there is resource depletion which argues against coal, and there is baseload reliability which argues against many of the renewables.

  24. I’m sorry but I can’t buy the idea that we should not use economical solar/wind (if we can and if it exists) because some day we might exceed a limit.

    Obviously, you use it up to some reasonable limit, right?

    (And if your complaint is only about that far future … you are complaining too early. Come back later πŸ˜‰

  25. Odograph — non-one has any problem with using “economical solar/wind (if we can and if it exists)”.

    The issue that some of us have is with forcing the inappropriate, unsustainable use of UNECONOMICAL solar/wind through subsidies, taxes, mandates etc.

    Wind & solar are being (have long been) used in market niches where they make sense — pumping up water for range cattle; powering road-side emergency phones; etc.

    The frustration comes from ill-informed people imagining that subsidized intermittent power supplies are the global answer. They are deceiving themselves, and thereby misleading others.

  26. Well, I suppose the rubber meets the road on “what’s economical?”

    If the most coal burning of the states had California’s electric rates they might see (a) a bit more conservation, and (b) see more renewables as “economical.”

  27. I’m sorry but I can’t buy the idea that we should not use economical solar/wind (if we can and if it exists) because some day we might exceed a limit.

    The argument gets frequently made that we don’t need any coal or nuclear because on a kWhr basis PV solar and wind are cheaper. I think we should be doing both.

    Texas is right behind you on electric rates. We are roughly 50% gas, 30% coal, 18% nuclear and 2% other. The 100% renewable plans are not much more expensive than the the tradiotional electric plans. The abundant wind supplies and the market support is driving wind power growth in Texas.

    The “do no fossil fuel” crowd is really voting to keep 1960s and 70s vintage pulverized coal plants running at the expense of cleaner more efficient plants.

  28. I agree that we don’t have the tech and/or infrastructure to do high ratios of solar/wind to other sources.

    The worst thing about the greens, if I may talk about “them” for a minute, is that they fought off our LNG terminals.

    I’ll take NG over coal any day of the week.

  29. “The 100% renewable plans are not much more expensive than the the tradiotional electric plans.”

    Not sure what you are referring to there, King.

    If you mean that the subsidized/mandated retail rate for “green” customers is not much higher than for ordinary customers — well, welcome to the crazy world of mandated price signals.

    If you mean that 100% of power generation could be replaced by so-called renewables at about the same cost, then you are a victim of misinformation.

    German utility Eon is a large wind-electric producer. To maintain reliable power, they have found that much wind-generated electricity has to be backed up (i.e. duplicated) by conventional sources. By the time wind power in Germany is fully built up, Eon estimates that the useful output from a turbine will be only about 4% of its nameplate capacity. (www.eon-netz.com)

    Strangely, their real world experience has not received much attention in the non-physical world of “green” energy enthusiasts.

  30. Every power generator wants to be dispatched at 3pm on a hot July afternoon when prices are at their peak.
    Solar should work pretty well for that, no? You might even build the panels facing west to maximize output at 3 pm (or whatever the peak demand time would be).

    Of course, much can be done to not build heat traps that need air conditioning even when the outside air is cool.

  31. One side says that the price of gas (about to rise again) is killing the household finances of the middle class, and so the tax must be allowed to expire on March 31.
    Objection! That’s just opinion.

    RF, do you have any numbers to back up the opinion? Such as a drastic drop in demand for gasoline? Figures to show public transport is bursting at its seams?

    This is the Catch-22 relationship between fuel taxes and road maintenance. Discontinue the tax and you can keep people on the roads, but you can’t maintain them. Continue the tax and you can maintain the roads, but people can’t afford to drive on them.
    Catch-22? More like Economics 101. Keep the taxes. If fewer people drive, you will have less tax for maintenance, but also reduced wear on the roads, meaning you need to spend less on maintenance, aka a self correcting system.

    At the end of the debate the argument had gone nowhere.
    Lawmakers can act pretty dim, especially when they pretend to be fighting for the little guy. High oil prices is the new reality, and no amount of hot air is going to change that.

    A US recession would give a nice break (from rising oil prices), but the other effects of that event would mean few get to celebrate low oil prices. At least we may get to see Hugo sweat…

  32. Kin’ – In Texas we have retail choice. I can sign up with any provider I want. There are several 100% renewable providers in the state. I currently pay $.11/kWh. The 100% renewable is running around $.13-.15.

    Optimist – yes solar works well at peak times. But if you are a seller on to the grid you must get dispatched. Which means whoever manages the grid tells you they can take your power. A home PV solar system works differently and is not subject to dispatching. In most states if you produce more power than you need your meter runs backwards. That is OK for small distributed system. A large commercial PV solar would be very different. It would need preferential dispatching during its peak production. Often the time that EVERY power producer would like to get dispatched.

  33. Kin’ – In Texas we have retail choice. I can sign up with any provider I want. There are several 100% renewable providers in the state. I currently pay $.11/kWh. The 100% renewable is running around $.13-.15.

    Optimist – yes solar works well at peak times. But if you are a seller on to the grid you must get dispatched. Which means whoever manages the grid tells you they can take your power. A home PV solar system works differently and is not subject to dispatching. In most states if you produce more power than you need your meter runs backwards. That is OK for small distributed system. A large commercial PV solar would be very different. It would need preferential dispatching during its peak production. Often the time that EVERY power producer would like to get dispatched.

  34. Optimist said: “Catch-22? More like Economics 101. Keep the taxes. If fewer people drive, you will have less tax for maintenance, but also reduced wear on the roads, meaning you need to spend less on maintenance, aka a self correcting system.”

    Sorry, Econ 101 doesn’t work that way. The system is dependent on having lots of people and vehicles on the roads to commute, take their kids to school, go shopping, go out to eat, visit amusement parks, deliver goods, etc. So it’s not a “self-correcting system” if people don’t drive. It means the system will fall apart.

  35. ==The issue that some of us have is with forcing the inappropriate, unsustainable use of UNECONOMICAL solar/wind through subsidies, taxes, mandates etc.==

    You seem to be under the impression that Coal and Nuclear don’t receive and even larger degree of subsidies, preferential treatment.
    And aren’t considerably more expensive now than they once were.
    http://greyfalcon.net/costlycoal
    http://greyfalcon.net/costlycoal2
    http://greyfalcon.net/fossiltaxes.png
    http://www.washingtonpost.com/wp-dyn/content/article/2007/05/13/AR2007051301105.html
    http://gristmill.grist.org/story/2008/1/27/235918/579
    http://greyfalcon.net/costlynuclear
    http://greyfalcon.net/h2nuke
    http://greyfalcon.net/nuclearvideo
    http://www.lvrj.com/news/12655421.html
    http://www.lvrj.com/news/9954856.html

    By comparison, SolarThermal and GeoThermal have competative performance and cost. Without all those nasty externalities.
    http://thefraserdomain.typepad.com/energy/2008/01/solarreserve-fo.html
    http://www.geo-energy.org/publications/reports/May2007GEAUpdateonUSGeothermalPowerProductionandDevelopment.pdf

    Gone are the days of $2000/KW Coal/Nuclear Plants my friend.
    And here we are today with $4000-$6000/KW.
    Why? Largely because those economic externalities are slowly becoming internalized.

    By comparison, Renewables are starting to look mighty economical.

  36. By comparison, Renewables are starting to look mighty economical.

    If they truly are economical, they will get proposed. And they will get opposed by the usual greenies. And if they finally get built, they will get taxed. That’s when we will know that so-called renewables are for real.

  37. Sorry, Econ 101 doesn’t work that way. The system is dependent on having lots of people and vehicles on the roads to commute, take their kids to school, go shopping, go out to eat, visit amusement parks, deliver goods, etc. So it’s not a “self-correcting system” if people don’t drive. It means the system will fall apart.
    What system is that? Exxon-Mobil’s profit forecasts?

    We are not inherently dependent on cheap oil, as the last few years showed. $100/bbl and the world economy just keeps rolloing ahead. Next stop: $200/bbl. Or maybe $500/bbl.

    The subprime mess, OTOH, may well push the US economy into a pretty severe recession. Since US consumers have been acting as the world’s consumers, the pain will be widely shared. Note how the mere threat of a US recession has already pushed oil prices down $10 – 15/bbl.

    So for all its importance and value, oil trade responds to the economy (not the other way round) as does any commodity.

    But if you insist on believing the sky is failing, by all means, be my guest.

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