Southern Co. gives up on 'clean coal' project

Citing significant scheduling delays, malfunctioning equipment and cost overruns, The Southern Co. suspended the coal gasification portion of its Kemper, Miss., power plant on June 28 and will run solely on natural gas.

The plant was meant to be a showpiece for proponents of clean coal, as well as bring thousands of jobs to rural Mississippi, but "equipment meant to turn the coal into gas and remove at least two-thirds of the carbon dioxide from it to keep it out of the atmosphere never worked as designed," reports Henry Fountain of The New York Times.

The plant had been running mostly on natural gas while engineers attempted to fix the coal gasification equipment. Because of that and other delays, the project was three years behind schedule and cost $7.5 billion, $4 billion over budget. Southern tried to secure additional funding with electric-rate increases, but regulators blocked the move, reports Nasdaq. 

Southern announced the suspension of the project in the wake of last week's ultimatum from the Mississippi Public Service Commission to redesign the project's plans and run the plant solely on natural gas, according to Nasdaq.

Southern CEO Tom Fanning said he stands by the project. "Carbon capture works; we've proved it," he said in an interview with E&E News. "While we've had a lot of financial challenges there, when you think about it, the technology works."