Questions and Answers

The Edwardsport plant will be the first major baseload power plant built in Indiana in more than 20 years – a much needed addition to our state’s energy sources. As we decided what kind of generation to build, fuel cost and availability were major considerations. In Indiana we have abundant coal reserves, a relatively low-cost option compared to other fuels.

Meanwhile, environmental regulations continue to tighten around air emissions. We chose to pursue coal gasification because it helps us control emissions as environmental regulations become more stringent.

The coal gasification process converts coal into a synthesis gas (syngas) and produces steam. The hot syngas is processed to remove sulfur compounds, mercury and particulate matter before it is used to fuel a combustion turbine generator. The heat in the exhaust gases from the combustion turbine is recovered to generate additional steam. This steam, along with that from the syngas process, then drives a steam turbine generator to produce electricity.

Coal gasification has seen worldwide use in chemical plant applications since the early 1900s. Through U.S. Department of Energy clean coal programs, it was developed for applications on a wider scale in the 1980s and demonstrated in a commercial setting in the mid-1990s. Currently, there are 16 sites worldwide, four of which use coal/petroleum coke for the sole purpose of generating electricity. One of those sites is the Wabash River Station in West Terre Haute, Ind. This plant was part of a Department of Energy demonstration project.

The plant will be one of the cleanest, most efficient coal-fired plants in the world. Asuming the plant operates 100 percent of the time, it will emit approximately 68 percent less sulfur dioxide, nitrogen oxide and particulates than the plant it replaces, which only operated about 30 percent of the time. It will also emit dramatically less mercury.  In addition, the Edwardsport plant will provide more than 10 times the kilowat-hours of electrical energy. While some emissions increase because of the size and greater usage of the plant compared to the recently-retired, smaller facility, the rate of emission per megawatt-hour for all emissions will be significantly lower. In addition to lower emission rates, this plant will use less water, generate less solid waste, and be more efficient than a conventional pulverized coal plant.

The plant could not be built without incentives that might make the IGCC technology a viable economic choice for Indiana customers. The benefits to the local/regional economy include:

• The plant will use 1.7 - 1.9 million tons of coal per year, a boost for local and state economies.
• A total investment of approximately $2.88 billion.
• Increases in state and local taxes paid.
• Estimated property taxes to be paid in years 1-10 are approximately $37 million.*
• Estimated property taxes beginning year are approximately 11 $5 million.*
  * Estimated property taxes reflect 2009 pay 2010 tax rates.

The IGCC plant will use an average of 11 million gallons of water per day as compared to the plant it replaces that used 188 million gallons per day. The plant will use well water.

We will have the option of transporting coal by rail or truck, with rail as the preference.

If trains are used, we estimate needing about three to four trains weekly with 75 to 100 railcars per train. If trucks are used, we estimate 240 per day will be needed to deliver coal. An additional 40 trucks would be needed daily to transport plant byproducts from the facility. If the rail spur is used to transport plant byproducts such as sulfur or slag out of the facility, we estimate needing about two to three railcars of sulfur daily and five to six railcars of slag per day. Whether or not we use the rail spur for these types of deliveries will depend mostly on the economics of train and truck transportation at the time.

The plant should use between 1.7 and 1.9 million tons of coal per year.

The IGCC plant will employ between 110 and 120 people.

Duke Energy believes this technology makes sense in a future where there will be carbon dioxide regulations. While there are no cheap energy options, reduction of carbon emissions from this plant will be less difficult and costly than from other types of fossil fuel plants primarily because carbon dioxide can be removed from the syngas prior to combustion; whereas, with other fossil fuel plants, the carbon compounds will have to be removed from the much more voluminous exhaust gases. Subject to final approval by the Indiana Utility Regulatory Commission, we are planning to study the costs, plant impacts and a potential schedule related to capturing a portion of the carbon dioxide from the plant, and then compressing and piping the carbon dioxide deep underground for permanent geologic storage.

Carbon capture includes a variety of methods for removing carbon dioxide from the emissions of industrial sources such as power plants, refineries, ethanol plants and other industrial facilities in order to help stabilize atmospheric levels of carbon dioxide. Carbon sequestration is the term used to describe a broad class of technologies that are just now being researched and developed for capturing and permanently sequestering, or storing, carbon dioxide. Once the carbon dioxide has been captured, it could possibly be stored safely in deep underground geologic formations (geologic sequestration). We have proposed studying the capture and sequestration of a portion of the plant’s carbon dioxide emissions.Carbon capture includes a variety of methods for removing carbon dioxide from the emissions of industrial sources such as power plants, refineries, ethanol plants and other industrial facilities in order to help stabilize atmospheric levels of carbon dioxide.

We have proposed studying the capture and sequestration of a portion of the plant's carbon dioxide emissions.

We are currently estimating the plant will cost approximately $2.88 billion to construct. The rate impact of the construction costs will be partially reduced by more than $460 million in local, state and federal tax incentives. The company is proposing to cap the project’s construction costs to be passed along to customers at $2.72 billion, excluding financing costs on that amount. Duke Energy also is proposing rate-related adjustments that will lower the overall customer rate increase related to the project from an average of about 19 percent to about 16 percent. The average residential, homeowner impact would be about 14 percent. The proposal is subject to Indiana Utility Regulatory Commission approval.

The main byproducts from the coal gasification process are elemental sulfur and vitrified slag (similar to gravel). These products are useful in other industries and will be stored in an environmentally safe manner with the intention to market them for sale. If they are not sold, disposal will be in an environmentally suitable, permitted landfill.

The buildings will be larger than the old plant, and there will be much more light associated with the new structures. The exterior lighting will be similar to a modern industrial plant (such as the GPC grain processing plant in Washington, Ind.), and more light will be visible to the surrounding area compared to the existing plant. The plant also will be equipped with a gas flare. The flare is a way of burning off the gas produced by the coal gasification process when the operation of the generating equipment is interrupted or if the gas is out of specification. The size and scale of this flare is very large. At times, when it is necessary to burn the flare, large quantities of light and heat will be created. Although the light may be very bright, especially at night, facility managers will do everything they can to prepare the community for these occasional events.