A group of Japanese firms, including Tokyo Electric Power Co., yesterday joined a group of American companies and the Electric Power Research Institute in financing a $300 million experimental power plant fueled by coal that will be transformed into gas.
The Cool Water Coal Gasification program will build a 100-megawatt power plant in the Mojave desert in Southern California that will be part of the Southern California Edison Company system.
The process involves changing 1,000 tons of coal a day into fuel gas, using water and oxygen to do so; the gas is then cleaned and fed into steam and gas turbines that generate electricity.
The plant is scheduled to begin operations in mid-1984. At the end of the 6 1/2 year pilot program, the California utility has the option to buy the plant and operate it commercially.
Funding for the alternate fuel program has come so far from the research institutes and private firms, but a proposal is pending before the federal Synfuel Corporation to provide some financial relief to the firms involved in the experiment if it is less successful than anticipated.
The government has been asked to provide up to $63 million to make up losses but would pay nothing if the experiment operates as projected, said Lawrence Papay, vice president of advanced engineering for the utility company and chairman of Cool Water Board of Control.
The plan is not a commercial project but a large experiment that the participants say will bring the industry closer to the point where commercial operations are feasible. Participants in the financing will get their money back without interest. "It's not a for-profit venture," said Papay.
The Japan Cool Water Program Partnership (named after another generating station) has pledged $30 million to finance the project. The Japanese group includes Tokyo Electric Power Co., which is the world's largest privately-owned utility; the Central Research Institute of the Electric Power Industry; Toshiba CGP Corp. and IHI Coal Gasification Project Corp.
The Electric Power Research Institute, the non-profit research and development agency of the electric utility industry, is providing $105 million of the funding. Texaco Inc. is providing $45 million, and Bechtel Power Corp., which is building the plant, and General Electric Co. are each providing $30 million. The remainder comes from Southern California Edison and the Empire State Electric Energy Research Corp., which is made up of seven New York state utilities.
Even with conservation and the development of alternate energy sources, Japan still depends on oil for 66 percent of its energy needs, said Kazuo Fujimori, chairman of the Japanese group.
Although the coal gasification process has been licensed for use in 96 plants in 21 countries, the Cool Water project is the first time that the gas will be used to generate electricity for consumer use, said James L. Dunlap, vice president for alternate energy for Texaco.