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Energy company drops plans to develop coal plant in Illinois

LNG Industry,

Plans to develop a US$ 3.5 million underground coal gasification (UCG) plant in Taylorville, Illinois, have been cancelled by Nebraska-based energy company, Tenaska.

Tenaska said in a statement that UCG plant was no longer viable, partly because lawmakers did not agree to a 30 year contract to purchase electricity from the plant, with the costs passed onto customers of utilities and competitive power suppliers.

The plant is one of several major coal-fuelled energy project proposals for Illinois that have been scrapped or repeatedly delayed. Tenaska indicated that lower costs of natural gas and renewable energy affected its decision.

Tenaska had pursued the project for more than five years.  It was supported by unions, which said the project would have created 2500 construction jobs and 150 permanent jobs.

The decision to cancel the planned UCG plant is another blow to US coal mining, as the country continues to favour using shale gas and other cheaper alternative fuels to gas, with US coal exports continuing to rise.

The plant would have converted Illinois coal to synthetic gas, which would have been used to create electricity. Emissions would have been captured and stored underground.

Dave Fiorelli, Tenaska’s president of development said in a written statement, “We take a conservative approach to development, working to ensure projects will have a long-term market for their power before we begin construction.”

Tenaska faced strong opposition from Exelon Corp., Illinois’ largest electricity provider, and manufacturers that said large businesses would have to pay more for power.

Edited from various sources by Samuel Dodson.

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