Dive Brief:
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Mississippi Power’s integrated gasification combined-cycle (IGCC) project in Kemper County, Miss., has notified the U.S. Securities and Exchange Commission (SEC) that the plant will be further delayed and, as a result, cost estimates need to be adjusted upwards again.
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Mississippi Power has moved the startup of the project to Nov. 30, from Oct. 31, saying the delay will cost an extra $33 million.
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The IGCC plant would be the first commercial scale power plant to combine technology to turn coal – in this case lignite from a nearby mine – into synthesis gas that is burned in conventional gas turbines.
Dive Insight:
The cost of Mississippi Power’s 582-MW Kemper IGCC project has more doubled since its inception, with costs continuing to rise.
The original cost was supposed to be about $2.9 billion, and it was originally supposed to be online in 2014. But construction delays and cost overruns have beleaguered the project. In July, Southern Co., Mississippi Power’s parent company, added $9 million to the costs, raising total costs to $6.8 billion. With its most recent notification, total costs are now $6.9 billion.
The recently announced $33 million increase comprises $5 million for repairs, modifications and mechanical improvements and $28 million related to the schedule extension.
The delay is related to ash build up in one of the two gasifiers that entered service in July. The other gasifier entered service in September and is still running.
In the SEC filing, Mississippi Power noted that the project’s startup date could face further delays and that certain enhancement projects could add to costs. Delays could add about $17 million per month to costs, according to the filing.
In addition to financial problems, the delays and cost overruns have sparked legal problems. In May, the SEC launched an investigation into the rising costs of the Kemper project.
