TXU Corp.’s ambitious plans for a build-out of coal-fired generation in Texas stumbled Wednesday when a pair of state administrative law judges (ALJs) recommended denial of an air emissions permit for a 1,600 MW plant in central Texas.

The ALJs said TXU’s plans to use low-nitrogen oxide burners and selective catalytic reduction (SCR) would not be effective with lignite, the low-grade coal that TXU proposes to burn at its Oak Grove plant. They said lignite has greater amounts of ash and moisture than other coals. “No commercial unit exists in the United States that uses SCR with lignite as Oak Grove proposes,” the ruling said.

The judges’ recommendation goes to the Texas Commission on Environmental Quality, which can accept or reject their opinion.

The proposed plant site is in Robertson County, TX, 120 miles south of Dallas.

Thursday Babcock Power Environmental Inc., a subsidiary of Babcock Power Inc., said it was awarded a contract for the air quality control systems (AQCS) for the Oak Grove plant. Fluor Corp. will provide engineering, procurement and construction (EPC) services for the plant’s two units. This contract will include a performance guarantee that the AQCS will control air emissions to levels that meet or exceed draft air permit limits on key emissions.

Babcock’s contract has an approximate value of $200 million and includes the design and supply of two wet flue gas desulfurization (WFGD) systems, two SCR systems, sorbent injection system for mercury control and two fabric filters. When complete, the plant will include two supercritical pulverized coal-fired boilers, each generating 860 MW of electricity.

Earlier this year, TXU said it would add 6,400 MW of new coal-fired generation, including the Oak Grove plant, in Texas, in addition to 2,200 MW of capacity previously announced (see Power Market Today, April 21). The company also said it would cut plant emissions levels by 20%. TXU said it plans to invest $10 billion in the new power projects, including a $2 billion investment in coal-gasification technology research and $500 million in emissions controls. The 11 new power plants would be located mainly at existing facility sites in the state, and eight of the projects would be fueled with coal from the Powder River Basin in Wyoming.

Wednesday TXU said it would buy another $1.7 billion worth of power generation equipment for its Texas coal-fired build-out. According to a regulatory filing, about $600 million will be spent on steam turbines and $1.1 billion will be spent on boilers. Deliveries of new equipment will be from September 2007 through November 2008.

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