The thoroughbreds of mine-mouth generation

1 January 2002

US coal giant, Peabody Energy - the world's largest coal company - is currently planning two major coal-fired power projects, one in southern Illinois and one in western Kentucky. These are illustrative of the renewed interest that coal-fired generation has enjoyed in the United States.

Peabody Energy's two planned coal generation projects, with an installed capacity of 1500 MWe each, provide, the company believes, a model for future mine-mouth baseload pulverised fuel power plants.

Costing about $1.5 billion apiece, both will be highly competitive, Peabody believes, even with natural gas, and both will exploit the company's massive coal reserves (estimated at 9.3 billion tons) and make use of some of its substantial land holdings (which amount to more than 300 000 acres).

A permit application was filed for the Illinois project, to be called the Prairie State Energy Campus, in October. Located on the western edge of Washington County, the campus is to include an adjacent 6 million ton-per-year underground coal mine that will fuel the generating plant, which is sited on Peabody property.

Designed with what the company describes as "advanced environmental controls" to enable the use of the region's high sulphur coals, the Prairie State Energy Campus is expected to be among the cleanest coal-fuelled plants in the Midwest, says Peabody.

Why a "campus"? Because the facility will offer an "outreach program to local colleges and universities to provide academic research opportunities involving energy and environmental technologies, carbon management or biofuel production", says Peabody.

"Events of the past year have taught us that reliable, low-cost energy is essential to our economy, and that energy independence remains a top priority for America," said Peabody Chairman and Chief Executive Officer Irl F Engelhardt. "We believe that the elements of America's energy crisis remain in place, although they are temporarily masked by soft economic conditions. America will address its energy strategies in due course, and we believe that clean, low-cost electricity from coal will remain the cornerstone of America's long- term energy supplies."

It is estimated that Peabody's coal products provide the fuel for more than 9 per cent of the electricity generated in the United States.

The plan is have the Prairie State plant in operation by 2006/2007, with facility development beginning in late 2002 or early 2003 Prairie State is expected to create 400 to 500 permanent jobs and is projected to inject $40 to $60 million in annual economic benefits to the region. The plant will provide electricity to Illinois, Indiana, Missouri and elsewhere throughout the Midwest.

Nearly half of the electricity produced in Illinois comes from coal-fuelled generation and the state is ranked as the USA's seventh largest producer of coal, producing about 30 million tons per year. The Prairie State Energy Campus is expected to contribute to a resurgence of coal production in the Illinois Basin - the heart of the Midwest energy system -which houses the United States' second largest reserves. Prairie State is also the first project that will apply for Illinois tax incentives designed to promote coal-based generation. In fact this has been a key factor in making the project viable.

Desulphurisation technology, using a wet limestone system, is projected to remove about 97 per cent of Prairie Island's sulphur dioxide emissions, allowing the plant to use the region's high sulphur coals. Advanced combustion technologies and selective catalytic reduction will achieve low NOx emissions, while advanced fabric filtration and control devices are projected to remove 99.9 per cent of particulate matter.

Some six months earlier, in spring 2001, Peabody applied to the State of Kentucky for an air permit relating to the western Kentucky project. This project, the Thoroughbred Energy Campus - also with an outreach mission - will be located near Central City in Muhlenberg County, on approximately 4500 acres of property controlled by Peabody. Like Prairie State, the power plant will be adjacent to its own coal mine, which will be developed as part of the project. Kentucky is the USA's third largest coal producer.

The Throughbred power plant is expected to start generation in 2005.

Cleaner coal

Both Prairie State and Thoroughbred, each consisting of two 750 MWe units, are expected to use essentially the same coal power generation technologies. Extensive modelling and engineering have already been completed on the Thoroughbred plant, which is expected to help speed the Prairie State project's development.

Both are modelled to be among the cleanest coal-fuelled plants east of the Mississippi River.

Carbon dioxide emissions are anticipated to be as much as 5 per cent lower than comparable Midwestern coal-based plants, as a result of improved boiler and steam turbine efficiencies and an investment by Peabody in planting trees that absorb carbon dioxide. Nevertheless, the boilers will use subcritical rather than supercritical steam conditions.

Peabody expects to manage initial project permitting, mine development and mine operations for both projects. The company is planning to secure partners for the projects to manage power plant construction, operation and power marketing.

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