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Frequently
Asked Questions
Tenaska Trailblazer Energy Center (TTEC) Q&A’s
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Q: What is the Tenaska Trailblazer Energy Center?
A: The proposed Tenaska Trailblazer Energy Center (“TTEC”) is being designed as a state-of-the-art conventional coal-fueled electric generating facility located just east of Sweetwater, Texas. The TTEC will qualify as an Advanced Clean Energy Project as defined by the Texas Legislature. It is unique in that it will be designed to capture 85% to 90% of the carbon dioxide (CO2) it produces during normal operation and deliver it to the Permian Basin for use in enhanced oil recovery efforts. The project is being developed by Tenaska, Inc., a highly respected developer of clean, efficient electric generation projects throughout the United States.
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Q: Who is Tenaska?
A: Tenaska is a highly regarded developer of clean, efficient electric generating facilities. Although its corporate headquarters are in Omaha, Nebraska, Tenaska is very much at home in Texas. Its Business Development group and its power marketing affiliate are headquartered in the company’s Dallas regional office. Tenaska has developed four power plants in Texas, two of which it still owns and operates. Tenaska is nationally known for its environmental stewardship -- in 2006, Tenaska was listed in benchmarking studies by the Natural Resources Defense Council for having the best record in the United States for fleet-wide average emissions of nitrogen oxides and carbon dioxide, and the third best record for sulfur dioxide.
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Q: Where will the Tenaska Trailblazer Energy Center be located?
A: If the TTEC moves forward in Texas, it will be located on more than 2,400 acres of undeveloped land Tenaska has acquired approximately nine miles east of Sweetwater, Texas.
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Q: What is the timetable for the Tenaska Trailblazer Energy Center?
A: Permit applications currently are being prepared and filed. If the project proves to be financially viable, we expect financial close to occur and construction to begin in 2011, with commercial operation slated for 2016.
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Q: What will the Tenaska Trailblazer Energy Center use for fuel?
A: The project as proposed near Sweetwater would use low-sulfur, sub-bituminous coal from the Powder River Basin. The coal would be delivered to the plant site via rail. One advantage of the site that has been acquired for the project is that two rail lines border the plant property, so all the rail facilities required to serve the TTEC will be constructed on project property.
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Q: What kind of technology will the Tenaska Trailblazer Energy Center employ?
A: The TTEC will be a conventional pulverized coal-fueled unit utilizing supercritical steam generating technology to produce electricity using low-sulfur Powder River Basin coal. The term “supercritical” refers to the use of steam at higher temperatures and pressures to drive the turbine, which generates the power. The use of these higher temperatures and pressures results in cleaner, more fuel-efficient power generation. The TTEC will use the best available technology at the time engineering and purchasing decisions are made. Tenaska is still determining the best type of carbon capture technology to use for the project. CO2 capture equipment is used successfully in other industrial processes around the world. We believe that an amine absorption system will work when scaled to our needs; we also are investigating other appropriate technologies that may be available that meet our needs. Regardless of the capture system chosen, the project will capture CO2 from the plant’s flue gases, remove moisture from the CO2, compress it and deliver it under pressure via a pipeline to the oil fields in the Permian Basin. There, it will be used for enhanced oil recovery efforts, which result in the CO2 being stored in deep underground rock formations.
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Q: If Tenaska wants to capture CO2, why is it building a conventional pulverized coal plant instead of an Integrated Gasification Combined Cycle (“IGCC”) plant?
A: There are several reasons Tenaska believes a conventional pulverized coal plant is a better choice for the TTEC:
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Fuel. IGCC technology works best with low moisture, high energy content (BTU) coal like the bituminous coals found in the eastern United States. We believe pulverized coal technology is more appropriate for the high moisture, lower BTU coal from the Powder River Basin that will be the fuel for the TTEC. |
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Elevation. Pulverized coal technology is more appropriate for the elevation near Sweetwater. IGCC technology works best at elevations closer to sea level. |
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Desire to advance different technologies. Tenaska is developing an IGCC project in Illinois using bituminous coal. We believe it is important to develop both technologies. |
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Q: How much water will the Tenaska Trailblazer Energy Center use? Where will it come from?
A: Trailblazer is expected to be the first Texas coal-fueled power plant to use “dry cooling” technology on a large scale. Dry cooling greatly reduces the amount of water required to operate the plant. Under normal operating conditions the plant will require approximately one million gallons of water per day. Using dry cooling, the maximum potential water use will be two million gallons of water per day. Traditional wet cooling at this plant would have used approximately 10 million gallons of water per day.
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Q: How much electricity will the Tenaska Trailblazer Energy Center produce?
A: With carbon capture and dry cooling technology, the TTEC will produce approximately 765 MW gross and 600 MW net of baseload generation – enough to power about 600,000 homes.
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Q: How will the Tenaska Trailblazer Energy Center affect the ability of West Texas wind generators to get their power to market?
A: Tenaska has filed an interconnection request with the Electric Reliability Council of Texas (“ERCOT”), the group that manages the transmission system in most of Texas. ERCOT will decide what upgrades are necessary to reliably bring power from the TTEC to market. It is possible that the upgrades required for TTEC could benefit wind producers as well.
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Q: What will this plant do to electricity rates?
A: The addition of a baseload coal plant in a natural gas-dominated market like that which exists in Texas will tend to reduce the overall cost of power. According to the Electric Reliability Council of Texas (ERCOT), the organization that manages power delivery for 85 percent of Texans, there currently is an imbalance of fuel sources among Texas power generators, with 72 percent of Texas’ electric generating capacity being fueled by natural gas. This leaves Texas electricity customers subject to natural gas supply interruptions and price spikes. A look at the electric rates in states where coal is the dominant generating fuel underscores coal’s importance in keeping electric prices low. According to the U.S. Department of Energy, the states with the lowest residential electricity rates in 2006 were Idaho, West Virginia, Wyoming, Kentucky and Utah. In Idaho, 74% of the total generating capacity in 2006 was fueled by water (hydroelectric). In West Virginia, 90% of generating capacity was fueled by coal; in Wyoming, 87%; in Kentucky, 72%; and in Utah, 73%.
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Q: What will be the project’s economic impact on the Sweetwater area?
A: The TTEC will provide 1,500 to 2,000 jobs at the peak of construction, and will create more than 100 good-paying permanent jobs. The estimated construction cost of the project is more than $2 billion, while the total cost of the project, including financing costs and other fees, is estimated to be more than $3 billion. The project will cause a regional ripple effect, leading to hundreds of additional jobs in industries like manufacturing, healthcare, retail trade, finance, insurance, professional and technical services in the Sweetwater area. The CO2 captured by the project will help oil producers in the Permian Basin recover approximately $1 billion of additional oil annually.
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Q: Why not capture all of the CO2 produced by the project?
A: No existing or near-term technology will capture 100% of the CO2 from a power plant. We believe it is important to advance existing technology that will capture the vast majority of the CO2 produced.
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Q: Is the storage of CO2 used in enhanced oil recovery a proven technology?
A: Yes. Permian Basin oil producers have been using and storing CO2 as part of enhanced oil recovery for more than 30 years, proving that CO2 can be stored in deep, underground rock formations. The CO2 captured by the TTEC will be injected and monitored in accordance with established Railroad Commission of Texas procedures. In addition, Texas House Bill 3732 provides tax incentives that only can be obtained after a determination by the Railroad Commission of Texas that long-term sequestration of the captured CO2 is assured. Additional federal rulemaking regarding CO2 sequestration also is expected to begin in 2008, and these additional rules should be in place before the TTEC begins operation.
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Q: Is there an existing market for CO2 on a scale that would use all of the CO2 that the Tenaska Trailblazer Energy Center will capture?
A: Yes. Tenaska believes it can sell all of the CO2 it can capture to oil producers in the Permian Basin.
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Q: Does Tenaska have experience building projects like this one?
A: Tenaska has a group of highly experienced employees who have developed many innovative large-scale power plant projects. No one had built a plant that could dispatch power into more than one of the nation’s three electrical grids on a commercial scale until Tenaska developed a way to do so. Tenaska’s Ferndale cogenerating plant in Washington State was one of the first gas-fueled plants to use selective catalytic reduction to lower nitrogen oxides (NOx) emissions. Tenaska used wastewater to grow hay at the Tenaska Frontier Generating Station in Texas, and employed wastewater to cool a plant it developed in Cleburne, Texas. In Pakistan, Tenaska led development of a plant using low-BTU fuel that previously had been thought to be uneconomical, saving that nation billions of dollars in fuel imports. Tenaska’s employees are problem solvers and leaders in innovative energy generation, and we are pioneers again with the Tenaska Trailblazer Energy Center.
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Q: Why aren’t others building projects like the Tenaska Trailblazer Energy Center?
A: There are several reasons why others might not implement this technology. First, it hasn’t been done before. We have satisfied ourselves that the technology will work, but only after rigorous study. Second, the capital requirements are significant. Our project will spend more than one-half billion dollars to install the equipment required to capture, compress and transport CO2. We also will use power generated by the plant to run the CO2 capture, compression and dehydration equipment, in addition to using steam in the CO2 capture process that otherwise would have been used to generate electricity – resulting in internal consumption of the equivalent of about 200 MW of power that would be available for sale into the marketplace if CO2 capture were not taking place. The certainty of a revenue stream from sales of CO2 helps the project’s economics, and Texas’ incentives for advanced clean energy projects also are a factor in our decision to focus on Texas as our first choice for the project. In locations without nearby mature CO2 markets and clean coal incentives, it would be much more difficult to make such a project financially viable.
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Q: What incentives are available to the Tenaska Trailblazer Energy Center in Texas?
A: In May 2007, the Texas Legislature passed House Bill 3732, the Advanced Clean Energy Project legislation. It provides significant financial incentives to projects that include CO2 capture and meet specific standards related to the capture of mercury, NOx and sulfur dioxide (SO2). By meeting the standards set forth in House Bill 3732, TTEC also will meet or exceed all federal clean air standards. Tenaska also considers it likely that there will be federal legislation that will provide significant incentives for carbon capture and sequestration at electric generating facilities. Federal carbon capture incentives also are critical to the project’s economic viability.
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Q: Tenaska says that it is “proposing” or “considering” building the Tenaska Trailblazer Energy Center near Sweetwater. Just how real is this project?
A: Our initial modeling and feasibility assessments indicate the project could be successful in the Sweetwater area. Now we are entering into the second phase, which involves plant design work, obtaining engineering and construction bids, environmental permitting and determination of ultimate financial viability. It should be noted Tenaska will spend more than $10 million during this second phase – a considerable commitment to the Sweetwater area. The final decision to proceed with the project at the Sweetwater location will be made in 2009 based on a number of factors, including passage of federal carbon legislation, such as the proposed Lieberman –Warner bill, final project cost estimates and projected market prices for electricity and CO2. Other important factors include the ability to take advantage of the incentives contained in House Bill 3732 and the availability of adequate amounts of water.
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Q: If Tenaska determines the Sweetwater site is not economically feasible, is the project dead?
A: No. We believe the Tenaska Trailblazer Energy Center is an important step forward in the use of coal as a fuel for generating electricity. If it appears that the project is not viable near Sweetwater, Tenaska will seek to build it at another site where the economics might be more favorable.
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Q: When can I start applying for a construction or plant job at the Tenaska Trailblazer Energy Center?
A: It’s a little too early to talk about applying for jobs at the Tenaska Trailblazer Energy Center. Here’s why: Tenaska hopes to make its decision on whether to proceed with the Trailblazer Energy Center in early 2011. An important factor in Tenaska’s decision is passage of federal climate change legislation that could provide benefits for projects that capture carbon dioxide (CO2).
When Tenaska builds a power plant, it hires an EPC—Engineering, Procurement, and Construction—contractor. The EPC contractor performs design engineering and manages construction of the project. It also awards construction materials contracts. Tenaska has developed 12 large power plants in the United States, and its construction contractors typically have made a concerted effort to hire workers from the local area.
An EPC contractor was retained in mid-2009. If Tenaska decides to move forward with the Trailblazer Energy Center, construction on the project won’t begin until 2011, with peak construction anticipated between 2013 and 2014. The earliest applications for permanent employment at the Trailblazer Energy Center could be accepted is 2015 to allow time for training before projected commercial operation in 2016.
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1. www.eia.doe.gov/neic/rankings/stateelectricityprice.htm
2. www.eia.doe.gov/fuelelectric.html |
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