Reuters reported that Duke Energy Corp raised the cost estimate for its Indiana coal gasification project a third time recently by 9.6% to USD 2.98 billion excluding financing costs.

Duke said the higher price tag up from USD 2.72 billion or USD 2.88 billion with financing was due to unfavourable productivity trends, higher material needs and construction changes at the 618-MW Edwardsport integrated gasification combined cycle plant which is 95% complete.

The IGCC process converts coal into a synthetic gas which can be stripped of sulfur, mercury and particulate matter before being used to fuel a combustion turbine to produce electricity. The process also allows for carbon dioxide to be captured before the fuel is burned.

Duke has been pursuing the Edwardsport project in Knox County, Indiana, since 2005 as its fleet of aging coal-fired power plants faces shutdowns due to increasingly stringent air pollution standards.

Only a few IGCC projects in the US are moving forward due to rising costs engineering challenges and a lack of regulation to reduce carbon emissions.

Duke said it has spent about USD 2.9 billion on Edwardsport through September 30 including USD 200 million in financing costs.

Edwardsport is expected to begin operating in 2012.

(Sourced from Reuters)