6 December 2005

The Governor of Pennsylvania, Edward G. Rendell, has launched “Energy Deployment for a Growing Economy” (EDGE) initiative, which reflects the growing interest in coal gasification in the USA. With up to $1 billion in state financing, the program will support the development of coal gasification technologies to produce a number of products, including synthetic gas, which can be used to make chemicals and consumer products, synthetic natural gas for home heating, as well as transportation fuels and electricity. Pennsylvania is a large producer of coal, which becomes an attractive alternative to the increasingly more expensive oil derived energy.

The EDGE program has been develop in cooperation with stakeholders from the coal, utility and related industries, as well as coal-to-liquid technology providers. The major players include Consol Energy, Foundation Coal, Shell Oil, General Electric, and US Steel Corp., who will launch its own “Pennsylvania Manufacturers for Coal Gasification” effort to work with other Pennsylvania businesses to bring new coal gasification resources on line.

To support the EDGE initiative, several financial and regulatory incentives have been proposed:

  • Priority funding through the Pennsylvania Economic Development Financing Authority (PEDFA) and the Pennsylvania Energy Development Authority (PEDA) for advanced coal gasification plants.
  • Allowing long-term contracts between project owners and customers, including electric utilities, for gas or electricity product. Such long-term agreements will be crucial in obtaining financial investment for the projects.
  • Permitting synthetic gas producers to operate without the burden of utility regulation when they serve and sell to limited purchasers such as chemical, manufacturing or industrial facilities. Without such a distinction, the producers would face a host of complex and costly regulations that are necessary when a company sells to the public.
  • Ensuring that electricity produced by these plants will be subject to the pricing and cost-recovery provisions of the state’s Alternative Energy Portfolio Standard. This will allow utilities involved in developing or owning these plants to recover relevant costs to support their investment.

The EDGE initiative has acknowledged that gasifying coal produces greenhouse gas (GHG) emissions, but—because the plants would be more efficient than conventional plants—the amount of GHG emissions could be actually reduced by up to 30%, according to Governor Rendell.

Source: PA Governor