By Tim Bradner
Journal Reporter

The Alaska Industrial Development and Export Authority, owner of the idled $292 million new-technology coal power plant at Healy, says it is looking at "all options" for getting the plant restarted, according to Bob Poe, the agency's executive director.

An impasse between AIDEA and Golden Valley Electric Association of Fairbanks, the former operator of the plant, is continuing, Poe said.

There have been no talks or negotiations between the state authority and Golden Valley on an agreement to restart the plant.

AIDEA, which is paying about $9 million a year to maintain the plant and to make the payments on bonds issued to finance the plant, is now considering bringing in another company to operate the facility.

"One way or another, the power would be used by consumers in Interior Alaska," Poe said.

Meanwhile, both the U.S. Department of Energy and the senior manager for aerospace and defense contractor TRW, who developed the new coal-burning systems used in the plant, expressed dismay that the 50 megawatt plant isn't operating. The energy department invested $117.5 million in the plant to test new clean-coal environmental systems.

Jack Hardgrove, the now-retired TRW manager, said its systems haven't been given a fair trial, and that operating experience would demonstrate lower costs and an even better environmental performance than was shown in tests of the plant.

Hardgrove described the Healy plant as "a national asset" that should be operating to demonstrate the new environmental systems. Those could be used to retrofit large, polluting coal plants in the Midwest, he said.

The plant cost $292.3 million to build, including $117.5 million in Department of Energy coal research funds and a $25 million cash appropriation from the state of Alaska, with the balance funded by revenue bonds issued by AIDEA. The plant began operation in 1997 and after a start-up phase performed a year-long series of tests of the technology for the Department of Energy.

Golden Valley and AIDEA performed a 90-day commercial operating test, which ended in December 1999. The plant was shut down shortly thereafter when Golden Valley and AIDEA agreed to seek funds for retrofits.

The issue now is what those retrofits would consist of. Golden Valley wants to gut the new equipment and replace it with more traditional coal-burning systems. AIDEA wants a more limited retrofit of those parts of the plant which consultants said experienced problems.

Golden Valley says the new coal-burning and emissions-control systems in the plant don't work. AIDEA disagrees.

"Every consultant we've hired to look at this says the technology does work and that the plant needs more time operating to work out the bugs," said Poe. A limited retrofit to solve problems that have been identified would cost far less, he said.

Hardgrove said the controversy involves the coal-handling system and not the new coal-burning and environmental systems developed by TRW and engineering firm Babcock & Wilcox Co.

For its part, the Energy Department is satisfied with the project. "From the technology point of view, it exceeded my expectations," said Robert Kornosky, manager of the project for the agency's National Energy Technology Laboratory.

The new technology systems include a clean coal combustion system; a slagging combustor developed by TRW that limits formation of nitrous oxides; and a spray dryer absorption system developed by Babcock & Wilcoxthat removes sulfur dioxide and particulates.

TRW had performed small-scale tests of its new coal-burning system at combustion rates of 40 million British thermal units per hour. To successfully scale this up nine or 10 times to a utility-scale test at 350 million Btu per hour at the Healy plant "was a tremendous success," Kornosky said.

Tests conducted during an extended demonstration of the plant showed nitrous oxide and sulfur dioxide emissions at about two-thirds to half of the levels allowed under the air permits for the plant. Carbon monoxide emissions were also very low, Kornosky said.

Hardgrove thinks that with improvements to the plant's systems, the environmental performance could be increased substantially. He also thinks the technology may show a reduction in heavy metals in coal emissions, which could also be tested by the Energy Department if the plant were operating.

Kornosky believes the slagging combustor and a spray-drier absorber developed by Babcock & Wilcox holds promise for many older coal plants in the Midwest.

These now blend high-sulfur coal mined locally with low-sulfur coal shipped in from western states to meet air quality goals, he said.

Some plants might be able to retrofit with the systems demonstrated by Healy to meet air quality goals and eliminate the import of low-sulphur coal from the West, Kornosky said.

The plant demonstrated something for western coal plant operators, too. It showed that less-costly limestone can be substituted for injections of more costly lime to reduce sulfur dioxide emissions in spray-drier absorbers used in many western U.S. power plants.

Another objective of the project was to demonstrate use of low-quality waste coals that now can't be used by power plants, according to Tom Sarkus, director of the Energy Department's Coal Power Product Division.

"We have a lot of coal in the U.S. and we should use as much of the resource as we can. If we can produce less waste, it makes a lot of sense," Sarkus said.

He believes the disagreement between Golden Valley and the state over operating the plant has inhibited commercial sales of the new systems. "It would be a big help to have an operating plant as an ongoing demonstration," he said.

Golden Valley, however, doesn't want anything to do with the plant unless the new systems are entirely stripped. "This is a one-of-a-kind plant. There's no other like it," said Steve Haagenson, president of the utility.

A major concern of Golden Valley is dealing with operating problems that will crop up in new-technology equipment that isn't used anywhere else, Haagenson said.

Hardgrove argues that systems in the plant aren't new. Slagging combustor technology has been around for years, he said. He believes Golden Valley's management doesn't understand that the systems are based on very reliable, proven technology.

Poe said he's somewhat sympathetic to this but says Golden Valley knew the plant was experimental when it signed the power purchase and operating agreements. "They knew what they were getting into," Poe said.

TRW has also committed to support its technology, he said.

Poe said its doesn't make sense to spend another $125 million on top of $297 million already invested to replace the new coal combustion and emissions-control systems developed by TRW and Babcock & Wilcox.

Alaska Republican Sen. Frank Murkowski inserted a provision in the Senate's version of the energy bill passed this spring that would authorize a $125 million low-interest loan from the Energy Department to the state to make the conversion, including limited repairs.

Poe said even a low-cost federal loan would have to be paid back, and the higher cost would make power from the plant extremely expensive.

He said the repairs recommended by Harris Engineering, a consultant, would involve rebuilding parts of the coal-feed system that did experience problems.

A firm that represented Golden Valley, Duke Engineering, essentially agreed with that assessment, Poe said.