Indiana Utility Regulators Approve Duke Energy Clean Coal Power Plant

The Indiana Utility Regulatory Commission granted Duke Energy permission today to construct a technologically advanced clean coal power plant in Edwardsport, Ind.

If the project proceeds, it will be the first commercial-scale coal gasification power plant built in the United States in the last 10 years. The approximately 630-megawatt plant will use advanced integrated gasification combined cycle (IGCC) technology.

“In the Midwest, coal is plentiful and low-cost, and finding ways to burn it cleanly is fundamental to meeting our customers’ demand for power,” said Duke Energy Indiana President Jim Stanley. “The Edwardsport facility could very well be the cleanest coal-fired power plant in the world once it’s completed. It fits Indiana’s energy plan to turn homegrown natural resources into an economic engine and be self-reliant for power. It’s part of our overall plan to meet growing customer needs with cleaner coal technology, energy efficiency, and renewables.”

An air permit is still necessary from the Indiana Department of Environmental Management. If that permit is approved, Duke Energy could begin construction early next year and start producing power from the site by early 2012.

The company has selected its existing power plant site in Edwardsport, Ind., as the location for the new plant. Upon completion of the project, the existing plant -- with coal and oil units built between 1944 and 1951 – will be retired. The new plant will be able to produce nearly four times as much power as the existing plant at Edwardsport, with much less environmental impact, including 45 percent less carbon dioxide emissions per net-megawatt hour.

The plant will cost approximately $2 billion to construct. That cost will be offset by more than $460 million in local, state and federal tax incentives. The plant will result in an average electric rate increase of approximately 16 percent phased in from 2008 through 2012.

An average of 800 to 900 construction workers over a three-year period, with a peak work force of 2,000, will be needed. Ongoing plant operations would employ approximately 100 people.

“We’ve received tremendous support for the project,” Stanley said. “Knox County residents unified to embrace this project and move it forward. The federal, state and local tax incentives help close the gap between the higher costs of building a cleaner coal gasification plant compared to traditional technology.”

Integrated gasification combined cycle technology uses a coal gasification system to convert coal into a synthesis gas (syngas). The syngas is processed to remove sulfur, mercury and ash before being sent to a traditional combined cycle power plant, using two combustion turbines and a steam turbine to efficiently produce electricity.

The technology could also remove the carbon dioxide from coal during the syngas conversion process to enable it to be stored or sequestered in underground geologic formations. Indiana utility regulators also were supportive of Duke Energy studying capture and sequestration of a portion of the plant’s carbon emissions. If the study is successful, carbon dioxide capture and sequestration equipment could be added to the plant.

“Coal gasification technology holds tremendous promise to reduce carbon dioxide emissions to address increasing concerns and evidence of global climate change,” Stanley said.

Duke Energy Indiana’s Wabash River Station is the site of the 260-megawatt Wabash River Coal Gasification project, which was one of the first demonstrations of using coal gasification to produce electricity.

Duke Energy’s Indiana operations provide approximately 7,300 megawatts of safe, reliable and competitively priced electricity to more than 770,000 electric customers, making it the state’s largest electric supplier.