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Southern Company, KBR to help drive global adoption of 21st century coal gasification technology

October 29, 2012

ATLANTA, Oct. 29, 2012 /PRNewswire/ — Southern Company – through subsidiary Southern Generation Technologies, LLC – and KBR, LLC, of Houston, Texas, have formed an alliance to market 21(st) century coal technology, Transport Integrated Gasification (TRIG(TM)), to power companies worldwide. This innovative coal gasification process can provide power companies an efficient means to generate electricity using an abundant, low-cost fuel – low-rank coal – while significantly reducing carbon emissions. The technology, which was developed by Southern Company and KBR under the sponsorship of the U.S. Department of Energy (DOE), can support coal-based generation with carbon dioxide emissions comparable to those of a natural gas plant, providing a viable solution for clean coal generation in the U.S. and around the world.

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Through this partnership, Southern Company and KBR will contribute their proven technical and marketing expertise, respectively, capitalizing on each company’s strengths in expanding TRIG(TM) technology to worldwide markets.

“Through the development of TRIG(TM) technology, we’ve found a way to preserve coal as an important, low-carbon energy resource for America,” said Southern Company Chairman, President and CEO Thomas A. Fanning. “By leveraging this example of American energy innovation worldwide, we will help ensure more customers have access to clean, safe, reliable and affordable energy produced by an abundant and underutilized coal resource.”

More than half of the world’s coal reserves consist of low-rank coal, such as lignite and sub-bituminous coal – the types that TRIG(TM) was developed to utilize. China alone is expected to add more than 300,000 megawatts (MW) of new coal-based generating capacity by 2035, while India and other parts of Asia are projected to add more than 100,000 MW in that same time frame. As electricity demand around the world continues to grow, TRIG(TM) is particularly suited to be part of the portfolio of technologies that can cleanly meet customers’ energy needs while utilizing low-cost, abundant fuel resources.

In the U.S., Mississippi Power, a Southern Company subsidiary, is using TRIG(TM) as the basis for its state-of-the-art integrated gasification combined cycle (IGCC) facility under construction in Kemper County, Miss. An abundance of Mississippi lignite located adjacent to the plant site will be gasified to create clean, safe, reliable and affordable energy for customers for the next 40 years. Since emission controls are built into the coal gasification process, the project is expected to have fewer sulfur dioxide, particulate and mercury emissions than traditional pulverized coal technology while capturing at least 65 percent of the carbon dioxide (CO(2)) produced, with resulting CO(2 )emissions comparable to those of a similarly sized natural gas plant.

TRIG(TM)( )technology incorporates numerous design and efficiency features that significantly improve a facility’s cost, reliability and emissions performance, as well as water withdrawal requirements, compared with traditional coal-fired generation.

In the case of the Kemper County project, the byproducts are expected to significantly offset the cost of the fuel of the plant. For example, the carbon captured at the Kemper County energy facility will assist in enhanced oil recovery, enabling the production of more domestically sourced oil and increasing America’s energy security when the IGCC facility enters service, scheduled for 2014. Enhanced oil recovery is a well-established method for increasing oil production by injecting CO(2) into depleted oil wells to force more oil out of the ground.

As part of a diverse portfolio of energy resources, TRIG(TM) technology can be designed and configured to help meet U.S. Environmental Protection Agency rules.

With the signing of this agreement, KBR acquires exclusive global licensing rights for power generation in addition to its existing rights in industrial applications of TRIG(TM). Southern Company will provide engineering and technology expertise and draw on its operations experience in support of KBR’s sales, marketing, licensing and design efforts.

“This new collaboration between KBR and Southern Company will utilize the respective strengths of each organization to deploy commercial TRIG(TM) licensed processes worldwide and accelerate the adoption of TRIG(TM) in the marketplace,” said Bill Utt, KBR chairman, president and chief executive officer. “It brings to bear the best of KBR’s global technology sales and delivery focus and Southern Company’s technology and operations experience to deliver the most comprehensive, innovative, low-rank coal gasifier and IGCC combination available.”

The DOE-sponsored project that led to the development of TRIG(TM) technology is an example of America’s longstanding commitment to finding meaningful solutions through innovation.

Prior to this agreement, Southern Company and KBR licensed TRIG(TM) to the Tian Ming Electric Power Company for a facility under construction in China.

Through its ongoing commitment to energy innovation through proprietary research and development, Southern Company is advancing the full energy portfolio, or “all the arrows in the quiver” – 21(st) century coal, new nuclear, natural gas, renewables and energy efficiency.

Southern Generation Technologies, LLC was formed in 2010 to license advanced power generation technology developed and owned by Southern Company and its subsidiaries.

KBR is a global engineering, construction and services company supporting the energy, hydrocarbon, government services, minerals, civil infrastructure, power, industrial and commercial markets. For more information, visit www.kbr.com.

With 4.4 million customers and more than 43,000 megawatts of generating capacity, Atlanta-based Southern Company (NYSE: SO) is the premier energy company serving the Southeast. A leading U.S. producer of clean, safe, reliable and affordable electricity, Southern Company owns electric utilities in four states and a growing competitive generation company, as well as fiber optics and wireless communications. Southern Company brands are known for energy innovation, excellent customer service, high reliability and retail electric prices that are below the national average. Southern Company is leading the nation’s nuclear renaissance through the construction of the first new nuclear units to be built in a generation of Americans and is demonstrating its commitment to energy innovation through development of a state-of-the-art coal gasification plant. Southern Company has been recognized by the U.S. Department of Defense and GI Jobs magazine as a top military employer and listed by DiversityInc as a top company for Blacks. The company received the 2012 Edison Award from the Edison Electric Institute for its leadership in new nuclear development, was named Platts’ 2011 Power Company of the Year and is continually ranked among the top utilities in Fortune’s annual World’s Most Admired Electric and Gas Utility rankings. Visit our website at www.southerncompany.com.

Certain information contained in this release is forward-looking information based on current expectations and plans that involve risks and uncertainties. Forward-looking information includes, among other things, statements concerning the completion of the Kemper integrated coal gasification combined cycle facility (“Kemper IGCC”) and fuel costs. Southern Company cautions that there are certain factors that can cause actual results to differ materially from the forward-looking information that has been provided. The reader is cautioned not to put undue reliance on this forward-looking information, which is not a guarantee of future performance and is subject to a number of uncertainties and other factors, many of which are outside the control of Southern Company; accordingly, there can be no assurance that such suggested results will be realized. The following factors, in addition to those discussed in Southern Company’s Annual Report on Form 10-K for the year ended December 31, 2011, and subsequent securities filings, could cause actual results to differ materially from management expectations as suggested by such forward-looking information: the impact of recent and future federal and state regulatory changes, as well as changes in application of existing laws and regulations; current and future litigation, regulatory investigations, proceedings, or inquiries; available sources and costs of fuels; state and federal rate regulations and the impact of pending and future rate cases and negotiations, including rate actions relating to fuel and other cost recovery mechanisms; regulatory approvals and actions related to the Kemper IGCC, including Mississippi Public Service Commission approvals, potential U.S. Department of Energy loan guarantees, the South Mississippi Electric Power Association purchase decision, utilization of investment tax credits, and the outcome of any further proceedings regarding the Mississippi Public Service Commission’s issuance of the certificate of public convenience and necessity; and the ability of counterparties of Southern Company’s affiliates to make payments as and when due and to perform as required. Southern Company expressly disclaims any obligation to update any forward-looking information.

SOURCE Southern Company


Source: PR Newswire