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Is ‘clean coal’ the answer for us?

A week or so ago, Mississippi Power announced its filing for a certificate of public convenience and to build a 582-megawatt Integrated Gasification Combined Cycle (IGCC) power plant in Kemper County. The state-of-the-art plant, Mississippi Power said, represents the first advanced gasification generating facility with carbon capture capabilities in Mississippi, and one of the first in the country.

The press release went on to state that the new plant is necessary for Mississippi Power to meet the needs of its customers in Mississippi and to help reduce the cost of fuel to those customers.

“This plant will diversify our fuel sources and will produce energy at lower and more stable costs than any other fossil fuel option,” said Anthony Topazi, Mississippi Power president and chief executive officer. “By creating an additional fuel alternative — Mississippi lignite – this project creates significant energy cost reductions for our customers, such that over its life, the energy savings more than offset the cost of building the plant.” He noted that along with IGCC technology, a diverse portfolio of generation resources such as renewable biomass, and energy efficiency and conservation initiatives, all play a crucial role in meeting customers’ rising electricity needs.”

There are lots of questions that need to be asked, however.

For most of us, what exactly is lignite?

Lignite, according to the almighty Wikipedia, often referred to as brown coal, is a soft brown fuel with characteristics that put it somewhere between coal and peat. It is considered the lowest rank of coal and it is used almost exclusively as a fuel for steam-electric power generation. Up to 50 percent of Greece’s electricity and 25 percent of Germany’s comes from lignite power plants.

Sounds like a slam dunk.

Great for Mississippi. Great for keeping down our dependence on foreign oil. Great for the economy.

But there sure are a lot of folks out there unhappy about the possibility of a new lignite power plant (or “clean coal” plant) being built in Mississippi or anywhere else, for that matter.

In a story in last week’s Wall Street Journal, many in Europe are beginning to re-think the IGCC plants.

According to the story, German utility RWE AG (RWE.XE) doesn’t plan to build new coal and lignite-fired power plants in western Europe, due to the restrictive rules governing the European Union’s carbon dioxide emissions trade.

“As a result of full auctioning of CO2 rights from 2013 RWE will suspend large scale coal or lignite power plant projects in western European countries such as Germany and the U.K.,” Johannes Lambertz, chief executive of the company’s power generation unit RWE Power, told Dow Jones Newswires last week.

Such power plant projects will be suspended until power prices are high enough to offset the additional costs.

To be fair, the power plants aren’t being banned or shut down, but it is going to be cost prohibitive to run the plants based on the new environmental regulations being put in place.

That brings us back to Mississippi. While the lignite power plant may sound good for the moment, is there going to come a time in the future when the same type of environmental regulations put a financial strain on this $2.2-billion project?

The Kemper County project is not set to be completed until 2013. With a new, Democratic, environmental-friendly administration in the White House, there is every likelihood that more stringent regulations will be put in place by the time the project is finished.

However, President Barack Obama while on the campaign trail did promise that his Department of Energy would enter into public-private partnerships to develop five “first-of-a-kind” commercial scale coal-fired plants with clean carbon capture and sequestration technology. During the transition, Obama seems to have been as good as his word by tapping Harvard’s John Holdren, a strong proponent for clean coal technology that uses carbon dioxide capture and storage.

For sure, Mississippi, as The Clarion-Ledger pointed out, needs additional “baseload” energy production as demand for electric power increases. Volatility in the fossil fuel markets is as visible as the nearest gas station. And the environmental impact of greenhouse gases is beginning to be understood and feared even in rural Mississippi.

But there are just as many scholars out there that believe there is no such thing as “clean coal” and that we, as a nation, should be investigating true green technology to help power the country through the rest of the century.

We hope every “I” has been dotted and every “T” crossed where this project is concerned.

Contact MBJ managing editor Ross Reily at ross.reily@msbusiness.com.

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