Rising costs and mismanagement weaken the case for coal’s future.

By David Z. Morris
July 1, 2017

After running billions of dollars over budget and falling years behind schedule, an effort to generate power from gasified coal – part of the push for so-called ‘clean coal’ – was indefinitely suspended this week. The Kemper County plant, owned by Southern Company and its subsidiary Mississippi Power, will continue to operate using natural gas.

The immediate cause of the suspension was a move by regulators to block utility rate increases. Those increases would have funded continued development at the plant, which has experienced ongoing technical challenges. They would also have come at a time when natural gas prices are low and renewable energy prices are declining steadily.

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The Kemper County coal-gasification effort was intended to use gasification and carbon capture techniques to generate energy from coal with far lower greenhouse gas emissions than a conventional coal plant. That idea underlay campaign promises from President Donald Trump to rejuvenate the U.S. coal industry.

But the project was already in deep trouble when Trump was making those promises. By July of last year, it was already well behind schedule and $4 billion over budget, and had used hundreds of millions of dollars in federal energy subsidies. The failures were attributed by some to mismanagement specific to the Kemper County project, but they nonetheless provide ammunition for skeptics of the clean coal concept itself.

The plant’s operators say its future will hinge on decisions by the Mississippi Public Service Commission.

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