If Southern just abandoned coal and used the turbines it’s already testing to burn natural gas, it could cut the cost of construction by more than half and generate more electricity for the grid, according to Ashby Foote, president of the Bigger Pie Forum, a Mississippi-based free-market non-profit representing ratepayers and businesses. Unless natural gas prices top $10 a British thermal unit for years and years, the plant will never cost less than a similar gas one, he said, citing a Mississippi Power document from 2009.
“If that’s the break-even point, this is going to be a big loser,” Foote said in an interview, citing the current drop in gas prices following the hydraulic fracturing boom. “This will be a drag on prosperity in Mississippi for the next 40 years.”
The Department of Energy’s technology laboratory joined with scientists from Southern and engineering giant KBR Inc. (KBR) to design a system based on one used in refineries that would chemically transform low-grade coal — the lignite with high moisture and ash content — into so-called syngas.
“There are a lot of low-ranked coals around the world,” said Mike Knaggs, director of the office of major demonstrations at the Department of Energy, said in an interview.