In an effort to spur development of clean coal-fired power plants and coal gasification technologies, the U.S. Treasury and Energy departments (DOE) last week awarded $1 billion in federal tax credits to nine companies. The Energy Policy Act of 2005 (EPAct) authorized the incentives to help move advanced coal technologies into the marketplace.

“There is more energy available in U.S. coal than in nearly all of the oil in the world, and these tax credits will help us find ways to use coal in an environmentally sensitive way,” DOE Secretary Samuel W. Bodman said in a statement presented to the National Coal Council’s annual fall meeting in Washington, DC. “The combination of government incentives and private sector innovation will harness America’s technological strength to ensure clean, secure, affordable and reliable energy.”

Bodman said DOE hopes the funding will lead to technological improvements, bringing the power industry closer to the development of near-zero emission power plants. Advanced coal technologies face cost, integration and reliability hurdles that must be overcome if they are to be widely deployed, according to DOE, which believes tax credits will accelerate the widespread use of these technologies and assist in driving down their overall cost.

The coal technologies fall under two different tax credit programs: one for qualifying advanced coal projects and another for qualifying gasification projects. Congressional authorizations included a total of $1.65 billion in tax credits to spur investment in the advanced clean coal facilities, including $350 million in tax credits for advanced gasification projects.

Initially, a total of 49 applications were received. DOE analyzed the proposed projects for technical and economic feasibility and for consistency with energy policy goals. It then passed along the results of its analysis to the Internal Revenue Service, which made the tax credit certifications.

The first round of tax incentive winners included the following companies and their project locations — two companies chose not to be publicly named:

Tampa Electric said it expects its proposed Polk Unit 6, a 630 MW integrated gasification combined cycle (IGCC) facility, to be in service in 2013. The Polk County project received $133.5 million in clean coal tax credits.

“This state-of-the-art IGCC plant would utilize coal, an abundant lower-cost resource to produce reliable electric power for our customers in the most environmentally sensitive manner possible,” said Chuck Black, president of Tampa Electric. “These tax credits would also represent significant customer savings.”

Tampa Electric said it was the first utility in the nation to commercialize IGCC technology in partnership with the DOE’s clean coal technology program by developing the Polk Power Station in 1996. The Polk Power Station has been named as the cleanest coal-fired power plant in North America by Canada’s Energy Probe Research Foundation.

Duke Energy’s proposed Edwardsport integrated gasification combined cycle (IGCC) and Cliffside pulverized coal plant projects were awarded $133.5 million and $125 million in federal clean coal tax credits respectively.

Duke Energy CEO James E. Rogers said the awards represent “major milestones” for the projects, both of which would be built on Duke Energy power plant sites and would include the retirement of existing coal units. The 630 MW Edwardsport project is located in Edwardsport, IN, and is currently being reviewed by the Indiana Utility Regulatory Commission. The 1,600 MW Cliffside project is located in Cliffside, NC, and is currently being reviewed by the North Carolina Utilities Commission.

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