Duke Energy Corp.’s (DUK - Free Report) Edwardsport Integrated Gasification Combined Cycle (IGCC) plant has come online. Located in Knox County, Ind., near Vincennes, the plant has an electric generation capacity of 618 megawatt (MW).
This advanced technology coal gasification plant is one of the world's cleanest coal-fired power generating facilities. The technology used by the plant gasifies coal, strips out pollutants and then burns the clean gas to produce electricity. The IGCC plant thus mitigates the harmful effects of burning fossil fuel for the generation of electricity.
The advantages of the plant are many, particularly with regard to environmental concerns. With approximately 70% less emissions of sulfur dioxide and nitrogen oxide and other particulates, the plant generates 10 times as much power as the former plant at Edwardsport used to produce. Indeed, the plant has the capability to reduce carbon dioxide emissions per megawatt-hour by approximately half compared to the plant it replaces.
Also, the plant generates sulfur and slag for agricultural and construction materials as byproducts. These byproducts are marketable and the revenues generated from these products will be passed on to customers. Again, the plant consumes less water than a conventional coal-fired plant.
Additionally, the plant performs its corporate social responsibility and has been a job-creator during a dull economy. During its peak construction period, about 3,500 construction workers and other professionals worked on-site.
Edwardsport will replace about 500 megawatts of older coal-fired generation that the company has recently retired or expect to retire in the near term due to new regulations implemented by the Environment Protection Agency (EPA). In February this year, the company announced the closure of two of its coal-fired power plants, Buck and Riverbend, two years earlier than scheduled. These plants were operating irregularly in recent years and the company expected operations to have become more infrequent in the future.
The company has thus been investing in new plants, retiring older plants as well as working on the modernization and upgrade of plants to reduce emissions across its service area. Since 2007, the company has invested approximately $6 billion in new plants and has retired up to 6,800 MW of older coal capacity. Duke Energy has invested another $7.5 billion for plant upgrades.
The technological advancements notwithstanding, the truth lies in the fact that Edwardsport is a coal-fired plant. The current scenario calls for more stringent air quality standards and cleaner energy. Also, energy companies have to abide by the rules of the EPA to produce clean power from renewable sources. Hence the coal-fired plant still stands the risk of harsh environmental regulations. The company presently retains a short-term Zacks Rank #3 (Hold).
However, well-placed stocks worth considering now are Companhia Paranaense de Energia (ELP - Free Report) , CPFL Energia S.A. and ALLETE, Inc. (ALE - Free Report) . While Companhia Paranaense de Energia and CPFL Energia hold a Zacks Rank #1 (Strong Buy), ALLETE, Inc. carries a Zacks Rank #2 (Buy).