November 30, 2007 / 11:52 PM / 12 years ago

Kentucky advanced-coal project obtains air permit

HOUSTON, Nov 30 (Reuters) - A proposed coal-gasification power plant in Kentucky will move forward after obtaining an air permit from Kentucky environmental regulators, the developer said Friday.

Michael McInnis of MDL Holding Co said the Kentucky Division for Air Quality issued an air permit for the 630-megawatt Cash Creek integrated gasification combined cycle (IGCC) plant planned for Henderson County, Kentucky.

“Our project is moving forward and receiving this permit is an important milestone,” McInnis said.

He said the project needs additional regulatory approval before construction is scheduled to begin next year. Operation of the plant is expected in 2011 or 2012, McInnis said.

Earlier this year, GE Energy Financial Services, a unit of General Electric (GE.N), said it acquired a 20 percent equity interest in the company developing the Cash Creek project. No terms were disclosed.

IGCC is viewed as a technology to allow coal and other petroleum-based fuel to be burned to produce electricity while reducing dangerous pollutants before they are released into the atmosphere.

Gasification allows for the separation of pollutants currently regulated in the U.S. — nitrogen oxide, sulfur dioxide and mercury — from the gas before burning it, and may allow for the capture of carbon dioxide, a greenhouse gas, blamed for global warming.

Only a few coal-gasification projects are moving forward in the U.S., while several have been canceled along with numerous traditional pulverized coal-fired projects, according to government data, amid increased public concern about climate change,

In recent weeks, two high-profile gasification projects in Florida have been scrapped. Sponsors Southern Co. (SO.N) and TECO Energy’s TE.N Tampa Electric utility, cited uncertainty about potential Florida regulation on greenhouse gas emissions. (Reporting by Eileen O’Grady; Editing by Christian Wiessner)

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