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FutureGen chief sees challenges, but remains optimistic
MATTOON, Jun 18, 2009 (Herald & Review - McClatchy-Tribune Information Services via COMTEX) --
The FutureGen Alliance CEO repeatedly used the word "challenge" when referring to the road ahead for the $2.4 billion energy project during a visit to Mattoon on Wednesday.
Mike Mudd and the alliance have about six months to convince the U.S. Department of Energy that the final design and costs are viable for moving ahead with building the FutureGen power plant in Mattoon.
One challenge is closing the funding gap, now estimated at $700 million to $900 million under the current share of public and private funding. The new price tag for the coal-fueled power plant with long-term carbon dioxide sequestration is $2.4 billion.
Another challenge is adding nine more partners into the alliance, a group of energy companies and governments. The fee for those new members is between $20 million and $30 million each to help meet the private funding share.
But Mudd is confident everything will come together so construction on the near-zero emissions energy plant can start by 2010. That final decision from the DOE is expected in January.
"I'm invigorated," Mudd said with a smile while visiting the Coles Together office near Mattoon on Wednesday. "I love challenges. And I am surrounded by very smart and dedicated people at FutureGen. We can come up with smart solutions for this. And we will have a deal going to move ahead with building this plant."
The federal government announced last week it will commit $1.073 billion to the public-private partnership with FutureGen Alliance, which now includes 11 energy companies worldwide.
Mudd confirmed two companies have left the group to pursue other energy projects, including investments into lignite gasification and nuclear power.
"We started with seven. Then we had 13. We have 11 members now, but we expect to be losing more. But with aggressive recruiting we should bring the number up to 20," Mudd said. "During the Bush administration we were on the verge of adding new members before the rug was pulled out from under us."
Mudd was referring to the DOE decision in January 2008 to cut federal support for FutureGen due to spiraling costs -- the original estimate on the project several years ago was less than $1 billion -- and a decision to invest in multiple carbon capture sequestration test projects.
That decision came as a shock to Mattoon and Illinois officials a month after the FutureGen Alliance announced Mattoon won a national competition as the future site of the power plant. The goal of FutureGen is to combine coal gasification technology and underground storage of CO2 in order to make coal a more viable energy source for the world by reducing air emissions of greenhouse gases derived from burning the fossil fuel.
Energy Secretary Steven Chu has said the FutureGen proposal has merit. Subsequently, an agreement between the DOE and FutureGen was announced last week. That pact calls for a thorough design and cost study.
"What I see is very dedicated and professional people," Mudd said of the DOE staff working on FutureGen. "It is refreshing to be working with these people. There might be differences at the end of the day how we do this, but there is no lack of dedication of making FutureGen happen. I think that is why it has taken so long to get to this point."
But the alliance has its share of work with calculations on cost cutting or securing additional money.
Some of the cost-cutting measures relate to design changes or even financing moves that factor the value of the plant with a 275-million megawatt generation capacity that will not be online for another three or four years, Mudd said.
"We are sitting down and trying to figure different ways we can save money on this," he said.
Even with those cuts, the reality is FutureGen might need money from other federal energy funding sources, Mudd said. It remains to be seen if competition for other forms of energy, like nuclear power, might hurt those efforts.
"I hate to say we're competing. And I despise saying, 'coal or nuclear.' We should say coal and nuclear. We really need all efforts on energy right now," Mudd said.
hmeeker@jg-tc.com|238-6869
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