The developers of a proposed $2 billion power-plant project in California that would capture and store carbon-dioxide emissions hope to succeed where the U.S. government has, so far, failed.
Hydrogen Energy International, a joint venture of British energy giant BP PLC (BP) and Australian mining company Rio Tinto PLC (RTP), aims to build a facility in California's Central Valley that will convert coal and a fuel-oil byproduct called petroleum coke into hydrogen, which would fuel enough electricity generation to power more than 150,000 homes. Ninety percent of the carbon dioxide produced would be captured and stored underground for use in enhanced oil recovery at an adjacent field.
Amid a broad push in Washington to jump-start development of technologies to slash the country's greenhouse-gas emissions, Hydrogen Energy California has received the biggest share, $308 million, of funding under the Department of Energy's Clean Coal Power Initiative.
The project faces a daunting road, however. Carbon capture-and-storage systems aren't yet commercially viable and experts say it could take years to reach that point. Long-term underground storage of carbon dioxide hasn't been achieved, and such technology would raise the cost of producing electricity by 20%-50%, according to various estimates.
Setbacks have plagued other "clean coal" power projects, most notably FutureGen, a proposed government-backed plant in Illinois. After being scrapped over ballooning costs by the Bush administration, FutureGen was brought back to life earlier this year, garnering renewed support from the Obama administration. But the project's developers have been forced to slash costs to fill a funding gap, even after dialing back the project's emissions-cutting target to 60% from 90%. In addition, two of the project's biggest power-sector backers, American Electric Power Co. (AEP) and Southern Co. (SO) walked away from FutureGen in June, looking at their own projects.
"Carbon capture and sequestration is an idea, not a practice," said Carl Zichella, director of western renewable programs for the Sierra Club, an environmental group. "I'm not saying it can't be done, but it hasn't been proven. It could take decades and billions upon billions of dollars."
Hydrogen Energy International is confident it can stay on track with its project, which would eliminate more than two million tons of greenhouse gases a year from the atmosphere. While a final cost estimate won't come until early-stage engineering and design work is done, Hydrogen Energy International gauged its costs as carefully as possible to avoid overruns, spokeswoman Tiffany Rau said.
"The recent DOE award we were given had a lot to do with how much homework we'd done and how much specificity we had about the costs of pieces of equipment and other engineering and design work," Rau said. The project's cost is likely to fluctuate with commodity prices, however, she said.
And while capturing and storing 90% of the CO2 emitted by the plant would be "relatively difficult," it isn't impossible, said Robert Remick, director of the hydrogen and technologies systems center at the National Renewable Energy Laboratory in Golden, Colo.
In addition, one potential advantage the California project - which would require state regulatory approvals - has over some other plans is the proximity of a market for the CO2: Occidental Petroleum Corp.'s (OXY) Elk Hills oil field.
Hydrogen Energy International's plan looks sound enough to Edison International (EIX) unit Southern California Edison Co. that the utility is investing $30 million in the project. Although carbon-capture and storage systems are still in the research-and-development phase, the company hopes the technology can ultimately be deployed on a commercial scale, said John Fielder, president of Southern California Edison.
"This technology could be "a way to provide a baseload type of power plant without producing carbon dioxide emissions," Fielder said. "But there are still a lot of things we don't know about capturing and storing CO2."