- The U.S. Department of Energy was preparing to cut funding to a Texas clean coal project, when its backers triggered an informal dispute resolution, buying more time to build support.
- DOE made the decision to pull funding in May, but Bloomberg reports the agency had given Summit Texas Clean Energy LLC, the project's developer,time to show it had firm agreements for the project's funding.
- The Texas Clean Energy Project has faced criticism for years of delay and concerns over the project's inability to secure commercial debt and equity project financing.
The financial difficulties and missed deadlines from the Texas clean capture project highlight challenges facing similar projects, such as Southern's Kemper coal gasification plant.
Critics of Summit's clean coal project are frustrated by what they see as the federal government's reticence to pull the plug on successful projects.
"This has officially reached the point of absurdity," Lukas Ross, who campaigns for Friends of the Earth, told Bloomberg. "This project should have been killed a long time ago, and no loophole should be allowed to keep it on life support."
In 2010, DOE awarded a $1.7 billion cooperative agreement under the initiative for TCEP, which was estimated to cost $1.9 billion. DOE's share of the project costs was $350 million, and it later increased its commitment to $450 million.
Summit is responsible for the rest of the project's funding, but has struggled to find support.
In April, a special report from DOE explained the agency's reasons for ending financial support. "Due to Summit’s inability to obtain the required commercial debt and equity project financing and the adverse effect of changing energy markets on the demand for coal-based power plants, we are concerned about the viability of the Project and the Department’s continued involvement," the agency wrote.
Last year, University of Michigan researchers said a new economic analysis showed carbon capture was significantly more expensive than previously estimated. Earlier attempts to discern the cost of operating capture technology estimated the additional annual cost at $29 million. Michigan's research found the number close to $126 million.
In its report, DOE said that as of February the project had remained in the first phase, and the agency had reimbursed Summit approximately $116 million in project costs, or approximately one-third of its total commitment. That initial phase, including decisions on the technology, schedule, and cost baselines, was originally scheduled for completion more than five years ago.