Nov 26 2009
According to Duke Energy Indiana, for the Edwardsport coal gasification plant, which is under construction at Southwest Indiana, the modification of design for further growth can add $150 million to the total project cost of $2.35 billion. Duke Energy Indiana has submitted this information to the Indiana Utility Regulatory Commission (IURC) as a part of the semi-annual update.
Yet, Duke Energy Indiana has to determine how much fund needs to be added, to the available contingency fund of $150 million, to complete a project like this. Duke Energy Indiana has requested the Commission to plan a schedule by a proceeding in the coming session during March 2010. At that time, the project’s main engineering schedule will be completed and the company can provide a revised and detailed cost estimate.
Duke Energy Indiana will be examining the future cost projections, which are associated with procurement, engineering, labor and plant start-up, during the next few months. By next spring, Duke Energy Indiana will be able to calculate labor costs which will determine the final cost of the project.
According to Jim Stanely, President, Duke Energy Indiana, the company has worked with General Electric, Bechtel and design firms to carry out an early engineering study, and as engineering progressed, the expectations of the project has also increased. The engineering requirements, such as, more steel, piping, electric cable and other building materials increased than the original estimate of funds. As this is the first time, the technology has been used and there was no guidance on size and quantity, as it will be usually for a project with the specific design, which was constructed earlier. Earlier, Duke Energy Indiana has estimated that between 2009 and 2013 March, the project will show an 18 percent increase in customer rate. The company will be able to file revised rate impact estimates by March.
In the year 2007, the IURC granted permission to Duke Energy Indiana to construct the advanced coal power plant at Edwardsport in Indiana. The project is scheduled to be completed in the year 2012, and the commission has to approve any increase in cost for the plant. Advanced integrated gasification combined cycle (IGCC) technology will be used in the 630-megawatt plant. Apart from increased production, the plant will emit less amount of nitrogen oxide, sulfur oxide, and mercury. With the help of its efficiency also, the plant will be emitting 45 percent less carbon dioxide per megawatt-hour. The plant constructed by Duke Energy Indiana will receive $460 million as incentives from state, local and federal tax, to reduce the cost impact on customers. The old plant will retire once the new facility is completed.
Source: http://www.duke-energy.com/