An aerial view of Mississippi Power’s Kemper Project clean coal power plant.

Why the Kemper Project clean coal power plant can’t get started

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By   /   February 8, 2017  /

Mississippi Power continues to struggle to get its Kemper Project clean coal power plant operational. None of the issues keeping the facility from getting up and running have easy solutions.

The challenges include:

  • Operational costs that make mothballing the gasifiers and associated equipment and running the turbines on natural gas an increasingly attractive alternative.

    Photo by Mississippi Power
    OVERHEAD: An aerial view of Mississippi Power’s Kemper Project clean coal power plant.

  • The need for more nitrogen gas for startup than Kemper’s on-site plant can provide.
  • The problem-plagued coal-feed system that crushes, filters and dries out high-moisture lignite coal mined on site before supplying it to the facility’s two gasifiers.
  • Issues with the ash removal system, which eliminates ash from the drying coal before it heads to the gasifier.
  • The refractory coatings of the two gasifiers that protect the thin metal shell from the 1,800-degree heat and pressure required to turn lignite into a natural gas-like substance called synthesis gas to fuel Kemper’s electricity-generating turbines.
  • The plant needs to be reliably operational to fully test the gas cleanup system that removes 65 percent of the carbon dioxide from the syngas stream, along with sulfuric acid, anhydrous ammonia, for sale to off-site customers.

Mississippi Power’s monthly filings with the U.S. Securities and Exchange Commission don’t go into great detail on why Kemper is struggling to reach operational status. More detail can be found in the monthly independent monitor reports by engineering firm URS, which was hired by the Mississippi Public Service Commission to be its eyes and ears on the Kemper Project site.

Natural gas would be a cheaper fuel

At the behest of the PSC, the utility is conducting an updated economic viability analysis comparing the gasifier with an equivalent natural gas-fueled combined-cycle generating plant. Kemper began running on natural gas in August 2014; the most recent round of testing on syngas began in July.

A 2010 analysis — that used much lower building and operational costs for Kemper — conducted by an outside firm says the break-even point for ratepayers on Kemper would require natural gas prices at $11 to $12 per million British Thermal Units. Today’s natural gas prices aren’t even close to that mark, topping out at $2.92 per million BTUs on the New York Mercantile Exchange.

In its original plans, the utility said it would take five years to get the plant in sustained operation on primarily syngas once it reaches its commercial operation date, which is now scheduled for late February. That means natural gas — which is needed to blend with the syngas during startup — will be a part of Kemper whether or not the utility decides to mothball the gasifer trains.

The company’s plans will be revealed when it has to file a new rate case by a June deadline.

The chicken and egg question is an apt metaphor to describe Kemper’s issues. As designed, the plant is supposed to run in a steady-state operation, constantly generating electricity from syngas converted from lignite coal and byproducts for off-site sales.

The problem is getting the plant started in the first place.

Nitrogen shortage

One of the issues detailed in the most recent IM report from December was the lack of capacity in the on-site, 100-ton per hour capacity nitrogen plant, which has necessitated the company have 30 to 40 trucks filled with nitrogen from off-site vendors on standby. The plant requires nitrogen for startup and doesn’t have enough from its on-site plant to accommodate starting up both gasifiers at once.

Coal-feed system

To get Kemper up to full capacity, the coal-feed system needs to improve.

The plant has six coal-feeding trains, three for each gasifier, to provide a constant flow of processed lignite to each gasifier. That capacity is more than 400,000 pounds per hour, a massive scale-up from the Southern Company’s demonstration plant in Wilsonville, Ala.

According to testimony before the PSC, the Wilsonville plant ran on Mississippi lignite fed at the rate of 5,600 pounds of lignite per hour for three test periods that totaled only 75 days.

Reaching the designed 400,000 pounds of lignite per hour capacity has been a struggle because the company has been forced to replace binding valves and clogged filters. The coal-feed system also had a serious accident in October during a test, when 1,750 degree syngas backed up into it after a pin fell out of the actuator of a large rotary valve.

If the facility can’t feed lignite at the designed rate into the downstream elements — such as the gasifier, gas cleanup system and turbines — it won’t be able to reach steady-state operation and will be perpetually beset with issues as it’s started up and stopped again.

Numbers for operations and maintenance costs bear this out. The company admitted in a recent filing that it will cost $1 billion over the first five years the plant is operation, a 288 percent increase over original estimates.

Ash removal

Problems with the ash removal system, which is part of the lignite preparation process, have sidelined the plant twice,  in November 2016 and in October 2015. The IM says in its latest report that the ash removal system could present problems as the utility tries to get Kemper operational. The IM says that suppressing the associated dust, which can damage equipment and instrumentation, is still a problem.

Refractory coatings

The utility had to replace the refractory, a heat-resistant coating on the inside of the gasifiers, that resulted in another delay last February. Without the two-layer refractory, 1,800-degree syngas would easily burn through the thin steel of the outer shell during operation.

The IM, in testimony before the PSC in March 2016, found that treated sand circulated in one of the gasifiers to simulate lignite during testing caused damage to the refractory. The sand, heated slowly to 1,200 degrees, tunneled into the harder, outer refractory layer through cracks and eroded away the softer, inner layer in a phenomena known as rat holing.

The IM has warned in its reports that further problems with the refractory coatings in the gasifier could arise during testing and operations, which could require one or both to be shut down for repair.

Gas cleanup system

One of the pitfalls of the slow buildup to full operation of the Kemper Project is the lack of testing for the part of the plant that makes its environmental promises possible. The gas cleanup system is designed to remove 65 percent of the carbon dioxide present in the syngas stream and also clean the syngas of deadly hydrogen sulfide, anhydrous ammonia and sulfuric acid for sale to off-site customers.

Byproduct sales were once projected as a key revenue source for the utility, but the plant will need to be in steady, reliable operation to realize any sales. Also, the lone remaining CO2 off-taker, Denbury Onshore Resources, has an exit clause in its contract with Mississippi Power that will allow it to void the agreement if the plant isn’t supplying CO2 by July. The IM says in its latest report that it is also concerned about issues with this part of the plant.

The watchers are watching

The multitude of problems with the $7.092 billion plant — which was supposed to be operational in May 2014 and was supposed to cost $1.8 billion when it was announced in December 2006 — haven’t escaped the notice of Moody’s.

The credit-rating firm announced Monday it had placed Mississippi Power on review for a possible downgrade after the announcing last week it will delay the plant’s operational date until later this month.

“The review of Mississippi Power’s ratings considers the declining competitiveness of the Kemper integrated combined cycle plant as project costs have continued to rise, operating costs are increasing, and natural gas prices remain low,” Michael G. Haggarty, Moody’s associate managing director, said in a news release.

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