Monday, February 27, 2023

As costs started soaring at Kemper coal-gasification plant in Mississippi, Southern Company execs turned to deception about the facility's mounting problems

The Kemper Plant near De Kalb, Mississippi


Part One

Most of the reporting on the scandal engulfing Southern Company has focused on mismanagement, cost overruns and other issues at the Vogtle Nuclear Plant in Georgia. But that's not the only place where Southern Company has stepped in doo-doo. In fact, you might say Southern has problems across a swath of the South -- east of Alabama (in Georgia), in Alabama (via chicanery at Alabama Power and Matrix LLC) and west of Alabama (near De Kalb, Mississippi) at the Kemper Plant (also known as Plant Ratcliffe) about 30 miles north of Meridian.

Kemper was supposed to be a shining example of coal gasification technology, a process designed to turn coal into gas. But it hasn't turned out so well. An E&E News article (dated Oct. 26, 2021) carried the glaring news that "The Kemper project (had) just collapsed." From the article, by reporter Kristi E. Swartz:

One of the nation’s largest symbols of carbon capture technology — the Kemper project — has collapsed into a pile of debris, highlighting the strategy of one of the nation’s largest utilities as it aims to decarbonize its fleet.

The project, which was half of a multimillion-dollar power plant in Mississippi intended to gasify lignite coal and store its captured carbon emissions, was imploded by Southern Co.’s Mississippi Power unit earlier this month because the equipment was no longer needed. The facility, Plant Ratcliffe, captured worldwide attention and was supposed to host the first commercial-scale carbon capture project on a large coal plant in the United States.

But what was known as “Kemper” for most of its construction life stopped after delays and increased costs prompted Mississippi utility regulators to say in 2017 the facility could run on natural gas only.

What did the project's failure mean to the people of Mississippi? The Mississippi Free Press addresses that question in a Nov. 11, 2022 article titled "Power for Southern People, Not the Southern Power Company." Artis Burney calls it a "disaster" and goes on to write:

In 2016, construction began on the Kemper Power Plant, touted as the pinnacle of  the movement to bring "clean coal" to America ( The plant  . . . was intended to be the largest of its kind and a proof-of-concept for future plants to follow -- then spent the next 11 years trying and failing to become operational, while Southern Company, the monopoly that owned it, lobbed the costs of its ill-conceived venture off on Kemper County residents.

Ill-conceived? That leads us to a report at The UK Guardian, under the headline "How America's clean coal dream unravelled; Exclusive: Kemper power plant promised to be a world leader in ‘clean coal’ technology but Guardian reporting found evidence top executives knew of construction problems and design flaws years before the scheme collapsed." Writes reporter Sharon Kelly:

High above the red dirt and evergreen trees of Kemper County, Mississippi, gleams a 15-story monolith of pipes surrounded by a town-sized array of steel towers and white buildings. The hi-tech industrial site juts out of the surrounding forest, its sharp silhouette out of place amid the gray crumbling roads, catfish stands and trailer homes of nearby De Kalb, population: 1,164.

The $7.5-billion Kemper power plant once drew officials from as far as Saudi Arabia, Japan and Norway to marvel at a 21st-century power project so technologically complex its builder compared it to the moonshot of the 1960s. Its promise? Energy from “clean coal”.

“I’m impressed,” said Jukka Uosukainen, the United Nations director for the Climate Technology Centre and Network, after a 2014 tour, citing Kemper as an example of how “maybe using coal in the future is possible”.

Kemper, its managers claimed, would harness dirt-cheap lignite coal – the world’s least efficient and most abundant form of coal – to power homes and businesses in America’s lowest-income state while causing the least climate-changing pollution of any fossil fuel. It was a promise they wouldn’t keep.

Last summer the plant’s owner, Southern Company, America’s second-largest utility company, announced it was abandoning construction after years of blown-out budgets and missed construction deadlines.

“It hit us hard,” said Craig Hitt, executive director of the Kemper County Economic Development Authority. Some 75 miners, roughly half living inside Kemper County, have already been affected in a region where unemployment is 7.1% compared to a national average of just 4.1%.

“It was going to be the biggest project in the history of the county, possibly in the state of Mississippi,” Hitt said. Instead, this year, Kemper County was home to one of the first large coal-mining layoffs of the Trump era.

Southern Company officials have tried their best to blame someone (or something) else. That does not fly, based on The Guardian's research, writes Kelly:  

Company officials have blamed the failure on factors ranging from competition from tumbling natural-gas prices to bad weather, bad timing and plain old bad luck.

But a review by The Guardian of more than 5,000 pages of confidential company documents, internal emails, white papers, and other materials provided anonymously by several former Southern Co insiders, plus on- and off-record interviews with other former Kemper engineers and managers, found evidence that top executives covered up construction problems and fundamental design flaws at the plant and knew, years before they admitted it publicly, that their plans had gone awry.

Their public statements helped to prolong the notion that their “clean coal” power could be affordable, costing Southern’s customers and shareholders billions, giving false hope to miners and firing dreams that American innovation had provided a path forward for “clean coal” technology at a reasonable price.

In other words Southern Company officials were dishonest, and their deception wound up costing other people a lot of money: Their hopes for Kemper were a "pipe dream," Kelly writes:

“It was exciting times, but it turned out to be like a mirage,” said Brett Wingo, a former Southern Co engineer who first went public with his concerns about Kemper’s construction delays in a front-page New York Times investigative report in 2016 and is now suing the company over alleged retaliation. “It was a cool trick – on all of us.”

Kemper’s failure will have a profound impact on international plans to slow climate change which rely heavily on the rapid development of technology to capture carbon and store it, technology that has so far shown little progress.

The United States has spent hundreds of millions in federal taxpayer funds chasing the chimera of clean coal. Donald Trump has been particularly vocal about his support for clean coal. “We have ended the war on American energy and we have ended the war on beautiful, clean coal,” he said in this year’s State of the Union address.

Kemper promised a way forward. But the documents show that while Southern Company management presented a rosy picture of Kemper’s prospects to the public, numerous structural problems with the project had emerged during construction and internal documents questioned the very foundation of the plant’s viability.

In a 24 April 2013 earnings call, for example, Southern’s CEO Tom Fanning regretted Kemper’s newly announced first budget blowout, a $540-million hike, but described “tremendous progress” on construction and said “the scheduled in-service date” was achievable.

Fanning, it turned out, was painting a picture that was far too pretty:

Several former Southern engineers explained in interviews that construction workers often lacked the right gaskets, bolts and pipe hangers necessary to connect up Kemper’s more than 900,000 linear feet of pipes – but managers ordered them to install the piping anyway.
The orders were “just to show work was being done”, one engineer who worked on Kemper said, requesting anonymity because he still works in the tight-knit utility sector, and describing the inoperable maze of pipes as a “pony show” for the state’s Public Service Commission.

Bosses pressured engineers to turn in impossible cost and schedule estimates, former construction manager Kelli Williams and Wingo both recounted. They faced strong pressure to alter construction planning documents to fit budget goals, they said, even if they had strong reasons to doubt workers could actually achieve what the resulting plans required.

These construction snafus and planning pressures help explain how Kemper ballooned from a $2.4-billion construction project to one that cost $7.5-billion.

But Kemper’s flaws weren’t limited to construction problems. They went right to the heart of the power plant’s “clean coal” design.

What does that mean? Kelly explains:

Perhaps the single most important number for a power plant is its availability rate – the percentage of the time it can be up and running versus down for maintenance and repairs. Southern told the federal authorities that achieving 80% availability was a “key performance target” for Kemper, vital to proving that “clean coal” could be affordable.

After construction was under way, Southern Co hired a consultant called World Oil Services to run the numbers again. World Oil concluded Kemper’s design meant it could only be up and running on coal just 30-45% of the time during its first three to five years.

A 2 May 2014 in-house analysis also presents availability rates far lower than the company’s public numbers, concluding clean coal availability would gradually rise from 25% and not reach its “key” target for nearly a decade.

The figures suggest Southern’s plans for running an affordable “clean coal” plant were a pipe dream or, at best, unachievable for a decade. By the time Southern called it quits, Kemper had produced electricity from just coal for only about 100 hours.

Southern Company's failure at Kemper is not a surprise to everyone:, writes Kelly:

Instead of delivering the promise of clean coal Kemper has shattered them, in the meantime leaving locals out of work and shareholders out of pocket.

“We told them years ago that this was a facade,” said Louie Miller, director of the Mississippi chapter of the Sierra Club. “I think there’s going to be a big scrap metal sale at some point.”

Next, in Part Two: Mississippi Power, a subsidiary of Southern Company, has a lengthy history of dubious actions, and many of those weigh heaviest on communities of color.


legalschnauzer said...

Here is interesting background on coal gasification from a scientific journal:


Coal gasification by which coal is converted into a fuel gas rich in hydrogen and carbon monoxide has been undertaken industrially for over 200 years. The oil crises of the 1970s prompted a renewed interest in advanced coal utilization technologies. One technology, integrated gasification in combined cycle (IGCC), allowed generating power from coal at high efficiency with low emissions. This sparked research, development, and commercialization of these plants during the 1980s and 1990s. More recently, some of the coal gasification plants have addressed not only the issue of carbon capture and sequestration but also polygeneration strategies, varying the usage of the clean syngas between power production and chemical synthesis.

This chapter reviews and summarizes the current status of coal gasification worldwide. Despite the closure of several of the most relevant commercial coal gasification plants in Europe and the United States, gasification has increased in recent years, particularly in China. Moreover, technologies have diversified. In the following sections, the current status of coal gasification is presented and discussed. Information has been compiled according to continent and countries. The most relevant cases are discussed in more detail.

legalschnauzer said...

Here is more about the science behind coal gasification:

Underground coal gasification (UCG) is a process that converts deep, un-mineable coal resources into syngas, which can then be converted into valuable end products such as electric power. This paper provides a summary of the options to combine UCG with electric power production and focuses on commercial-scale applications using a combined-cycle power plant including integration options and syngas cleanup steps. Simulation results for a UCG power plant with carbon capture are compared against the results for an equivalent Integrated Gasification Combined Cycle (IGCC) plant using the same feedstock. Relative capital cost savings for a UCG power plant are estimated based on published IGCC process unit costs. The UCG power plant with carbon capture is shown to provide a higher thermal efficiency, lower CO2 intensity, and lower capital cost than an equivalent IGCC plant. Finally, the potential of UCG as a method for producing cost-effective, low-emissions electrical power from deep coal is discussed and some of the challenges and opportunities are summarized.

legalschnauzer said...

Three factors that doomed the Kemper Project:

Complex Technology

An engineer’s report filed with Mississippi utility regulators in May outlined a laundry list of problems with the gasification part of the plant, whose final price tag may have been around $7.1 billion. Problems included: chronic coal dust suppression issues; tube leaks in the synthetic gas cooler; insufficient process water capacity; and a too-small nitrogen plant, which required trucks to haul gas to the plant.

Those troubles point to the first of three factors that doomed the clean-coal portion of Kemper County: overly complex technology.

IGCC technology can be thought of as a chemistry set bolted onto what is now a well-established gas-fired power plant. The chemistry set exists to strip out methane from the coal feedstock along with a range of byproducts that can be sold commercially or disposed of.

Rise of Natural Gas

But even as the plant’s planned in-service date slipped, a fundamental shift was under way in the economics of electric power generation. Hydraulic fracturing technology was making natural gas supplies more abundant, reliable, and low cost. For the first time in perhaps 100 years, coal’s reign as king of fuels for power generation could be seriously challenged.


Indeed, Kemper County’s economic viability began to come into question in early 2017. Long-term natural gas price forecasts began to suggest that the coal plant may have become uncompetitive when compared to existing natural gas combined cycle units at a nearby power plant.

In a 19 February earnings conference call, Thomas Fanning, chairman, president, and CEO of Southern, said: “When we had this plant certificated (in 2010), we all thought that gas prices were going to be double digits.” By 2016, however, that assessment had changed. The result was a “reduction of gas price forecasts of 25 to 30 percent.”

In this way, hydraulic fracturing threw a wrench into the prospects for clean coal technology like IGCC. Indeed, history may tell that the plant was already a relic even as the first shovelfuls of dirt were being turned.

legalschnauzer said...

Forbes on syngas, natural gas, and Kemper Plant:

As an Integrated Gasification Combined Cycle (IGCC) plant, Kemper would have used a gasifier to convert locally-mined lignite coal to syngas, which would then drive a combined cycle turbine as in a normal gas plant.

But Kemper had construction delays and cost overruns, spending 7 years and 7 billion dollars trying to use coal in the plant, more than twice the projected costs. The Department of Energy kicked in $382 million in grants, and in 2014, the state legislated that $800 million of Kemper costs be passed on to ratepayers.

So when Mississippi Power asked regulators for permission to charge customers even more to cover new costs, the state’s Public Service Commission said no.

Instead, the Commission ordered the facility to use only natural gas and to stop the coal gasification part of the plant, unless they wanted to finance it themselves, thus ending the clean coal aspect of Kemper.

Southern Company Chairman and CEO Thomas Fanning said, ‘We believe this decision is in the best interests of our employees, customers, investors and all other stakeholders.’

The attempt to make coal clean is a good one. In an IGCC plant, coal is combined with oxygen and steam in the gasifier to produce the syngas, which is mainly hydrogen and carbon monoxide (CO). CO is combined with water to produce even more hydrogen and CO2.

legalschnauzer said...

More from Forbes --

The gas is then cleaned to remove impurities, such as sulfur, and the syngas is used in a gas turbine to produce electricity. Waste heat from the gas turbine is recovered to create steam which drives a steam turbine, producing more electricity, making the facility a combined cycle plant.

Additional hydrogen can be produced and the CO can be converted to CO2 which can then be captured and stored or used for things like enhanced oil recovery, providing the plant with carbon capture and sequestration (CCS) capabilities.

The problem with Kemper may be that it tried to do two things at once – the gasification and the carbon capture.

Gasification is a good way to produce clean-burning hydrogen for fuel cells. Hydrogen and other coal gases can be used to fuel power-generating turbines, or as the chemical building blocks for a wide range of commercial products, including diesel and other transportation fuels.

But reliability, availability and cost have been challenges facing development and commercialization of these types of plants, as they have been significantly more expensive than conventional coal-fired plants and face significant technical challenges. This is what killed Kemper’s clean coal future.

Anonymous said...

Go read this. You can see how they boxed him after reporting the complaints:

Interview here:

legalschnauzer said...

Thank you for sharing, @5:47. Very interesting information.