core sector communique

DOE Signs Cooperative Agreement for New Hydrogen Power Plant

Hydrogen Energy California to Construct IGCC Plant for Clean Power

Washington, D.C. — The U.S. Department of Energy (DOE) has signed a cooperative agreement with Hydrogen Energy California LLC (HECA) to build and demonstrate a hydrogen-powered electric generating facility, complete with carbon capture and storage, in Kern County, Calif. The new plant is a step toward commercialization of a clean technology that enables use of our country’s vast fossil energy resources while addressing the need to reduce greenhouse gas emissions.

HECA, which is owned by Hydrogen Energy International, BP Alternative Energy, and Rio Tinto, plans to construct an advanced integrated gasification combined cycle (IGCC) plant that will produce power by converting fuel—a blend of 75 percent coal and 25 percent petroleum coke—into hydrogen and carbon dioxide (CO2). The hydrogen will be used to fuel a combustion turbine, enabling net generation of 250 megawatts of electricity, enough power for more than 150,000 homes.

Approximately 90 percent of the CO2 produced from the gasification process, or about 2 million tons per year, will be transported via pipeline to the Elk Hills oilfield, less than four miles away. There it will be sequestered in the same underground formations that have trapped oil and gas for eons. By choosing oilfields as the CO2 injection site, oil production will be increased in a process known as enhanced oil recovery (EOR), and the CO2 will be safely sequestered from the atmosphere. According to the California Governor's Office, "This project . . . will not only create green collar construction jobs, but it will avoid greenhouse gas emissions and further propel us toward a clean energy future."

Still other benefits will be realized from the new-concept plant:

• The proposed plant will maximize use of non-potable water for its power production needs, preserving California’s limited fresh water sources.
• The EOR operation will enable additional domestic oil production, which contributes to our national energy security.
• The new plant will boost the local economy by creating 1,500 construction jobs and 100 permanent operational positions.

The project is part of the Clean Coal Power Initiative (CCPI), a cost-shared collaboration between the federal government and private industry to increase investment in low-emission coal technology by demonstrating advanced coal-based power generation technologies prior to commercial deployment. The project will be cost-shared and administered by DOE’s Office of Fossil Energy and the National Energy Technology Laboratory.

The estimated capital cost for the project is approximately $2.3 billion. The federal cost-share is limited to $308 million, or just under 11 percent of the total project costs. The project consists of three phases: project definition (phase I), design and construction (phase II), and demonstration (phase III). Sequestration of 2 million tons per year of CO2 is slated to begin by 2016.