Coal is needed as the primary feedstock for the Hydrogen Energy California power project because coal is plentiful and California already imports most of its natural gas, said project backer Hydrogen Energy California LLC.
On April 27, Hydrogen Energy California filed with the California Energy Commission a series of answers to inquiries from the Association of Irritated Residents (AIR). In one request, AIR asked for the reasoning behind using coal for this project, which would involve gasification of the coal to produce hydrogen which would then be used in a power plant. AIR said regular natural gas might be a better feedstock.
California has perhaps the nation’s most aggressive policy against greenhouse gas emissions. The state wants to get one-third of its power from renewable energy and is essentially forcing electric utilities in the state to shed their interests in out-of-state coal plants that import power into California.
The actual fuel for the project is hydrogen, the developer pointed out. The power block and integrated low-carbon nitrogen-based product manufacturing complex would use hydrogen as the fuel and feedstock, respectively. The project is designed to create hydrogen from a feedstock blend consisting of 75% western sub-bituminous coal and 25% California petroleum coke by a chemical process that involves almost no atmospheric emissions.
“Despite the presence of the local gas and oil industry, California currently imports approximately 50% of its oil and 90% of its natural gas needs each year,” said Hydrogen Energy California. “Coal is a plentiful, domestic feedstock exhibiting stable supply. Historically, coal has been less expensive per unit of energy produced than oil or natural gas. In spite of recent environmental regulation and advances in technology favoring natural gas use, coal is still priced lower than natural gas in California. In addition, coal prices are more stable historically and therefore more predictable for investors and lenders. Securing a domestically-available long-term, stable, feedstock will enable the project to provide dependable low-carbon hydrogen-generated electricity to help meet future electrical power needs and to support a reliable power grid that is an essential component to meeting California’s GHG reduction goals for 2020 and beyond.”
Another AIR question had to do with CO2 capture planning, with the developer simply pointing the group to various sections of its project application to answer those questions.
Another question had to with whether the urea (fertilizer) produced at the plant would be expected to raise or lower the price of this type of fertilizer for local farmers. “The project will contain an integrated manufacturing complex that will produce approximately 1 million tons per year of low-carbon nitrogen-based products, including urea, urea ammonium nitrate (UAN), and anhydrous ammonia, to be used in agricultural, transportation, and industrial applications,” the company responded. “Currently, the vast majority of all California nitrogen-based fertilizer feedstocks are imported into the state. Due to these transportation costs, California nitrogen-based fertilizers are priced 20-30% higher than those in other regions in the country. The project is currently negotiating with several fertilizer wholesalers who will distribute to the southern California region. As the project is not directly negotiating with retail suppliers, end-user consumer prices are unknown at this time. However, the local presence of a nitrogen-based fertilizer producer is likely to benefit area consumers through increased competition and the lowering of transportation costs.”
The gasification component of the project would produce 180 million standard cubic feet per day (MMSCFD) of hydrogen to feed a 390-MW (gross) combined cycle plant. The gasification component would also capture about 130 MMSCFD of CO2 (or approximately 90% at steady-state operation) which would be used for enhanced oil recovery and sequestration in the Elk Hills Oil Field.
In September 2011, SCS Energy California LLC acquired 100% ownership of Hydrogen Energy California from BP Alternative Energy North America Inc. and Rio Tinto Hydrogen Energy LLC.