Clean Coal Power Initiative: Round 2

News Release

Release Date: October 26, 2004


Minnesota Company to Receive $36 Million to Construct Clean Coal Plant 
Project Expected to Create Around 1,150 Construction and High-Tech Jobs

DULUTH, MN - Secretary of Energy Spencer Abraham, joined by Minnesota Governor Tim Pawlenty and Senator Norm Coleman, today announced that a team effort led by Excelsior Energy Inc. of Minnetonka, Minn., has been selected by the Department of Energy to receive $36 million for the development of one of the cleanest coal-fired power plants in the world.

The award comes as part of President George W. Bush’s 2002 Clean Coal Power Initiative (CCPI) to invest $2 billion over 10 years to advance technologies that can help meet the Nation's growing demand for electricity while providing a secure, low-cost, environmentally sound energy source. 

Secretary Abraham noted, "Clean energy technologies like those pioneered here mean jobs for this region. It will mean more than 1,000 local construction jobs during the three years it takes to build the plant, and at least 150 permanent high-tech jobs when commercial operations commence. The Excelsior plant builds on the significant progress we have already made toward meeting America’s growing energy needs in an environmentally sound manner.”

Excelsior Energy Inc. and ConocoPhillips will construct and operate the 531-megawatt Mesaba Energy Project in Hoyt Lakes, Minn. The project will incorporate results from technology studies and lessons learned at the Wabash River Integrated Gasification Combined Cycle (IGCC) power plant in Terre Haute, Ind., to reduce costs and improve efficiency and availability for a next generation, oxygen-blown gasification plant using bituminous coal. The total cost for the coal-based demonstration project is $1.18 billion, of which DOE will contribute $36 million as the federal cost share.

The project was one of two selected to demonstrate advanced power generation systems using IGCC technology, a variation on a natural gas-fired combined cycle power plant in which a coal-derived gas (produced by the coal gasifier) replaces the natural gas. In a combined cycle plant two power generators, or cycles, are used in combination to generate electricity in a very efficient manner. 

The gas from the coal is first passed through a gas turbine to generate electricity; then the hot gas leaving the turbine is used to heat water to produce steam to power a steam turbine and generate electricity a second time. This approach increases the amount of electricity that can be generated from a ton of coal and does so in an environmentally sound manner. IGCC promises dramatically increased efficiency and reliability, improved environmental performance, reduced capital and operating costs, and flexibility to process both high- and low-rank coals. 

The Clean Coal Power Initiative 
The Clean Coal Power Initiative, under which this project was selected for funding, was initiated by President Bush in 2002. CCPI is an innovative technology demonstration program that fosters more efficient clean coal technologies for use in new and existing electric power generating facilities in the United States. Candidate technologies are demonstrated at full-scale to ensure proof-of-operation prior to commercialization. 

The technologies developed under the CCPI program will help maintain the Nation's abundant coal resources as a cornerstone of our future domestic energy portfolio, particularly for power generation. The priorities for this round of competition were technology advancements for gasification-based electricity production, advanced mercury control, and sequestration and sequestration-readiness.

Technologies emerging from the program will help to meet the President’s environmental objectives for America as outlined in the Clear Skies Initiative (CSI), Global Climate Change Initiative, FutureGen, and the Hydrogen Initiative. Early CCPI demonstrations emphasize technologies that apply to existing power plants and construction of new plants. Later demonstrations will include systems comprising advanced turbines, membranes, fuel cells, gasification processes, hydrogen production, and other technologies. CCPI, an industry/government cost-shared partnership, responds to President Bush’s commitment to increase investment in clean coal technology.

Successful implementation of CCPI will solve many of the environmental issues associated with fossil-fuel use and provide high-efficiency, low-cost, future generating capacity. 

Project Selection Process 
All projects selected under Round 2 of the CCPI program underwent an intensely competitive evaluation process. Evaluation criteria included the proposer's plan to share at least 50 percent of the cost of the project and a commitment to repayment of the government's investment in the demonstration project. Forty technical DOE evaluators reviewed 13 proposals. While competing for $300 million in federal funds, the estimated total cost of the 13 proposals was $6 billion.