Dive Brief:
- The oft-delayed 582 MW Kemper coal gasification facility in Mississippi has been delayed again, with owner Southern Co. now saying it expects to begin full operations in January, the Atlanta Business Chronicle reports.
- In an 8-K filing with the U.S. Securities and Exchange Commission, the company said delays could cost the project an additional $25 million to $35 million each month to cover labor, materials, fuel and operational resources required to start the plant.
- Originally budgeted at about $2.8 billion, Southern subsidiary Mississippi Power began development in 2008. Costs have since risen to almost $7 billion.
Dive Insight:
Once complete, Kemper will be one of just two coal gasification facilities in the country and could create a model for reducing carbon emissions while giving an assist to the industry. While the project began generating power with traditional natural gas last year, the company only just announced its first steps to producing syngas in October of this year.
Now, officials say full startup will likely be delayed at least until January, marking its second delay in as many months. In November, the Mississippi pushed back the plant's startup date to Dec. 31.
The company defended its ever-climbing costs to federal officials, saying that further cost increases could result from several factors, including difficulties integrating the systems required for sustained operations, and sustaining nitrogen supply.
"Mississippi Power is also identifying potential improvement projects that ultimately may be completed subsequent to placing the remainder of the Kemper IGCC in service," the company said. "If completed, such improvement projects would be expected to enhance plant performance, safety and/or operations."
Those potential costs have yet to be fully evaluated, Southern said, and may be subject to a $2.88 billion cost cap imposed by state regulators.
