The largest environmental story to break this month has been The New York Times' exposé of the Mississippi-based Kemper Project's mismanagement, delays, inflated costs, and alleged fraud, making a mockery of the NCPO's plans to convert Thailand from natural gas to 'clean coal'.
The Thailand Power Development Plan 2015-2036, adopted by the NCPO via a cabinet resolution on June 30, 2015, seeks to add three coal-fired power plants by 2024, namely the 800MW Krabi Plant in 2019, the 1GW Thepa Plant Unit 1 in 2021, and the 1GW Thepa Plant 2 in 2024, followed by several more gigawatts going into the 2030's. One of the key goals of the 2015 Plan is “Increasing coal power generation via clean coal technology due to its relatively low fuel cost, and high reserves of coal” while weaning Thailand off natural gas, which Thailand will run out of this century.
What The New York Times exposé reveals is the fundamental flaw in this plan – the fact that 'Clean Coal Technology' (CCT) is immature at best and extremely costly to the taxpayer at worst. While fuel costs are indeed low, so low that coal mining companies are going out of business, building an actual CCT power plant which not only reduces particulate emissions but more importantly captures CO2, the leading greenhouse gas, is actually extremely costly. The Kemper Project, a medium-sized plant at only 582 MW, is three times over budget, at 6.6 billion USD.
The plant's technology will turn coal into natural gas, making it an integrated gasification combined cycle plant, only the second in the US to use "transport integrated gasification" (TRIG) technology – which, however, produces huge quantities of CO2. The Kemper Plant is due to be the first 'true' CCT plant in the US and is a flagship commitment for the Obama administration's attempts to make coal acceptable in an economy where 40% of the US energy mix still comes from coal. Using carbon capture and sequestration or carbon capture and storage (CCS) technology, the plant intends to capture up to 65% of the carbon dioxide (CO2) emissions. It should be emphasized that this still means tonnes of CO2 will be emitted annually, with the plant not even being competitive with natural gas in this regard.
Kemper is the most expensive power plant in history per watt of electricity generated. The economic justification for the plant relies on three premises. Firstly, Mississippi is rich in coal, especially lignite, which means transport costs for the coal to get to the plant are relatively low. In contrast, Thailand will mainly not be using local coal but will be importing its coal from Indonesia under an ASEAN understanding, thus being reliant on the cost of oil – at the same time making the NCPO's claims to be championing energy security seem hollow.
Secondly, the CO2 that is captured is intended to have an economic use in the case of the Kemper plant. It is to be sold to oil-fields sixty miles away, via a pipe, in order to perform enhanced oil recovery or CO2-EOR. This is basically fracking for oil using CO2 instead of water and can increase yields of an oil field by 30-60%. In the case of Thailand, there is no CO2 EOR option, meaning a key question is what will happen to the Thailand's CO2 from the Krabi and Thepa plants. While it could end up pumped under the sea, this adds significantly to cost and is subject to leakage in a poorly managed project.
The third economic justification is that foreign countries, such as Thailand, will queue up for the Kemper Plant's technology, thereby making it financially economical. However, as The New York Times points out, not only do you need to be located next to a coal mine and within reach of oil companies which want to buy your CO2 for the economics to be viable, but you also need a decent management system to make a new technology work. Instead, the Kemper plant is two years over target and as a penalty has to pay back $234 million in tax credits to the US Internal Revenue Service. The overruns have led to the parent company, Southern Company, as well as its subsidiary, Mississippi Power, being investigated by the US Securities and Exchange Commission. It is also being sued by one of the oil companies it was due to supply with CO2 for failing to deliver, and it has been found to have acted illegally in firing a whistle blower who exposed mismanagement and poor quality workmanship.
This is not a model Thailand should be adapting, still less the Chinese version of CCT likely to be adopted by Thailand via a consortium of Ital-Thai and the Power Construction Corporation. The latter is a subsidiary of Sinohydro Corporation, a Chinese state-owned power company with no track record of CCT which will almost certainly seek to rip off Kemper's technology. It should also be noted that the economics of clean coal technology do not work in China, where rich children go to school under giant inflatable domes.
Chinese people playing sport in Beijing, which is trying to sell CCT to Thailand
Rich children playing sport under a giant inflatable dome in Beijing
Simply put, CCT will not help Thailand in implementing its Intended Nationally Determined Contribution to the Paris Agreement – in any case only a pathetic reduction in its greenhouse gas emissions by 20 percent from the projected business-as-usual (BAU) level by 2030 from a 2005 baseline. For a country with a capital city which is one of the ten most vulnerable coastal cities in the world and which may well have to be evacuated before the end of this century, one might expect a more pragmatic approach. In terms of global leadership, while Thailand is the Chair of the G77 this year, the country recently failed to demonstrate enough vision regarding its energy plans under either the Paris Agreement or the UN Sustainable Development Goals frameworks to leverage its status to acquire a temporary seat on the UN Security Council. Finally, with serious protests from Thailand's Thai Malay community in the South over the proposed CCT Krabi plant, the NCPO risks simply driving another nail into its own coffin come the referendum.