Everything you ever wanted to know about why coal is the fuel of choice for the United States Of America

US$15bn plan for hydrogen power generation projects

The world will continue to make extensive use of fossil fuels, such as natural gas and coal, for power generation for the foreseeable future.

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However, technology now allows this to be done more cleanly by creating hydrogen from fossil fuels. The hydrogen is used as the fuel gas to generate electric power from turbines in a power plant. The carbon dioxide (CO2) produced can be captured, transported and stored safely and permanently in deep geological formations such as oil and gas fields.
Emissions
Power generation accounts for some 40percent of manmade CO2 emissions. By combining hydrogen power generation with carbon capture and storage in one integrated project, 90percent of the CO2 in the fuel is captured so that it does not enter the atmosphere and a substantial step is made towards tackling the climate change issue.
In an effort to further develop this technology, BP and GE have announced that they are to collaborate on power, carbon capture and sequestration technologies (Fig.1).
“The combination of our two companies’ skills and resources in this area is formidable, and is the latest example of our intent to make a real difference in the face of the challenge of climate change,” said BP’s Vivienne Cox. “BP and GE's strategic approaches to developing increasingly cleaner, lower carbon power options are closely aligned and our skills and strengths are highly complementary.”
“Tomorrow’s energy mix will include hydrogen – and GE and BP are taking the lead in ensuring progress begins today,” said David Calhoun of GE. “This initiative will demonstrate that our companies’ leading-edge technologies can make hydrogen production efficient, reliable, and economical for large-scale, commercial power production. Our financial strength will ensure it happens now globally, changing the way we envision our energy future.”
BP has already announced plans for two such hydrogen power projects with carbon capture and sequestration, one in Scotland and the other in California, USA (see The big two). Both are to use GE technology. Subject to appropriate regulatory and fiscal regimes being in place, and necessary due diligence, the companies have an ambition to develop 10–15 further projects over the next decade, including the plants in Scotland and California.
Subject to further exploration, the current expectation is that the most appropriate structure may be through creation of a joint venture to invest in hydrogen power projects and a joint development agreement for development of related technology.
As a first step, BP and GE would jointly participate in the two hydrogen power projects with carbon capture and sequestration that BP has announced already.
The companies will apply some of the world’s leading technologies, project experience and assets to optimise the integrated design.
Reforming technology
The collaborative effort will draw upon the companies’ technologies and experience in areas such as coal gasification, reforming technology, gas turbines and carbon capture and storage.
“The combination of coal gasification and carbon capture and sequestration is crucial for clean coal development and presents great opportunities for countries with substantial reserves of coal such as the USA, China and India,” noted Lewis Gillies, BP’s Director of Hydrogen Power.
“GE and BP are combining our resources to develop economically attractive, breakthrough technologies in the area of hydrogen to power. This will allow power producers to use abundant, low-cost fossil fuel resources to generate electricity with very low CO2 emissions,” said Edward Lowe, general manager of GE Energy’s gasification business.
In addition to the complementary nature of the technologies and experience of the two companies, the collaboration is expected to be further strengthened by the global reach of each of the partners.
GE’s operations in Houston and BP’s operations in London will form the core groups for the hydrogen power collaboration.
Hydrogen power and carbon capture and sequestration is a key part of BP’s growing low-carbon power generation business, BP Alternative Energy. This business, launched in 2005, combines BP’s interests in hydrogen power with BP Solar, BP’s photovoltaic company, and the company’s interests in wind power and natural gas-fired power generation. BP anticipates investing US$8bn (E6.3bn) in BP Alternative Energy over the next decade reinforcing its determination to grow its businesses ‘beyond petroleum’.
The big two
In Peterhead, BP together with Scottish and Southern Energy plan to build a 475MW hydrogen fired power plant based on natural gas. It would sequester 1.8million t/y of CO2 4000metres below the seabed in the Miller oil field where the gas will enable the production of 40million barrels of oil that would not otherwise have been recoverable.
Meanwhile, the other US$1bn (E787m) plant is to be located alongside BP’s Carson refinery, about 20 miles south of Los Angeles, and be capable of producing 500 MW of low-carbon generation, enough power to serve 325000 Southern California homes.
This plant would take petroleum coke, a refinery
by-product and synthetic form of coal, to create the hydrogen.
The plant will capture and store fourmillion t/y of carbon dioxide which, like the Peterhead project, will enable incremental oil production.
Investment decisions
BP and Edison Mission Group hope to finalise project investment decisions for Carson in 2008 and bring the new power plant online by 2011. Its potential benefits include:
Providing 500MW of new clean generating capacity for Southern California at a time when state agencies are predicting possible power supply shortages during the coming years.
Eliminating four million tons of CO2 per year from the atmosphere by sequestering it underground.
Enabling additional production from existing California oil fields, producing previously unrecoverable oil reserves by injecting the CO2 into oil reservoirs, where the CO2 would be permanently stored.
Boosting the Southern California economy with 1000 construction jobs and 150 permanent operational positions.
Increasing the diversity and supply of US indigenous fuels available to generate electricity.
Preserving limited fresh water sources by using recycled and treated city wastewater for plant needs.
California Governor Arnold Schwarzenegger describes the plant a perfect fit for the state: “With our strategic growth plan, a commitment to air quality, and innovative projects like this hydrogen plant, I know we can have clear skies, improve our quality of life and build a stronger, more vibrant economy for California.”
Final project investment decisions will follow further study by the partners and review by the California Energy Commission and the South Coast Air Quality Management District.
BP and EMG are beginning project discussions with state and federal government agencies and local stakeholders and are exploring options for selling the electricity the plant would generate. BP is in discussions with Occidental Petroleum to develop options for sequestering the CO2 in Occidental’s California oilfields.
However, BP points out that the costs of hydrogen power are higher than those of traditional power plant fuels. As a result, it says, the project will depend, in part, on incentives provided in the Federal Energy Policy Act of 2005 for advanced gasification technologies.
In addition, adds the company, continued progress on the California Public Utilities Commission’s electricity ‘resource adequacy’ procurement policies will encourage this first-of-its-kind facility