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02 May 2023
In Texas, an Energy Company is Building a Power Plant
That Can Run on Hydrogen
In Texas, an energy company is building a power
plant that can run on hydrogen, a fuel that is gaining steam because
of new tax credits and upcoming federal regulations.
A half-hour’s drive from where the modern oil and
gas industry was born, a new power plant provides a glimpse into one
possible future for fossil fuels.
In this Texas region called the Golden Triangle —
named for the riches produced a century ago from the first modern oil
field — the electricity producer Entergy is building what it calls the
most advanced power station in its fleet. The $1.5 billion project
comes with added capability: In addition to burning gas, its turbines
can also run on hydrogen, a fuel that burns with no greenhouse gas
emissions.
Technology such as this would probably become an
imperative for many energy companies under
historic power plant rules the Biden administration is expected to
unveil this month. Those regulations, if they survive near-certain
legal challenges, will play a critical role in the United States
meeting its promises to cut carbon emissions.
Steve
Fleishman, a utility analyst with Wolfe Research. To reduce
emissions but keep the power grid reliable, he added:
"This is a way to
keep growing gas, but make it cleaner over time.
“The system cannot rely just on adding renewables.”
Yet the Entergy plant also underscores the
technological and political challenges that U.S. electricity
generation faces as it transforms. Hydrogen power and other
technologies — such as those that allow companies to capture carbon
emissions and store them rather than releasing them into the
atmosphere — are still far from proven solutions for large-scale
deployment.
And even as Texas and other
Republican-leaning states produce huge amounts of carbon-free
electricity, lawmakers in those places and in Washington are often
hostile to clean energy. Just last week, as part of legislation to
lift the federal debt
limit, House Republicans passed a
bill to repeal the Inflation Reduction Act, a law that devotes
hundreds of billions of dollars to
subsidizing such transformations.
At a recent groundbreaking for Entergy’s plant —
the Orange County Advanced Power Station — executives made no mention
of the politics playing out in Washington. The company’s chief
executive, Drew Marsh, didn’t mention gas once during his nearly five
minutes of remarks. He mentioned hydrogen nine times.
Drew Marsh,
said:
"Affordable, reliable and
clean energy is what our customers are looking for."
“People are talking about hydrogen hubs,” Marsh said. “And with this
investment, they’ll get to check all three boxes.”
As operators of fossil
fuel-burning plants are pressured to eliminate or at least reduce
their planet-warming emissions, Washington has come through with
subsidies for carbon capture and hydrogen to help. And the latest push
from the Environmental Protection Agency involves
new emissions limits that are so
stringent, gas- and coal-burning power plants would need
carbon-capture or hydrogen technology to comply, The Washington Post
and others have reported.
With roughly a dozen projects such as Entergy’s
nationwide, some power companies are trying to get ahead of that push
from federal regulators, Fleishman said.
Both
hydrogen and carbon capture are still developing — and often
controversial — technologies. The
infrastructure needs for both are massive, and it may not be a viable
business solution for most companies, especially outside of the Gulf
Coast and a few other select geographic areas, Fleishman said.
During the Obama era, the
Department of Energy spent $1.1 billion to help launch 11 carbon
capture demonstration projects. Only
two of them are operational today. A
study by the Institute for Energy Economics and Financial Analysis
found that 10 of the world’s 13 biggest capture projects are either
underperforming by large margins — trapping as little as half of the
carbon dioxide promised — or have shut down.
When burned, hydrogen fuel produces no greenhouse
gas emissions. But the fuel can have significant climate impacts
depending on how it is produced, stored and transported.
Just producing it can create greenhouse gases.
Currently, the most common way of producing hydrogen is to combine
large amounts of natural gas with high-temperature steam. The process
is highly energy intensive and creates carbon-dioxide emissions —
unless it is paired with a carbon-capture system to control them.
Using a different process instead, producing
hydrogen with solar, wind, geothermal or even nuclear energy, can
avoid those emissions. But many environmental groups say that is a
much riskier and less efficient use of that zero-carbon energy than
just sending power from those sources onto the grid.
Emily Kent, the
U.S. director of zero-carbon fuels at the Clean Air Task Force, an
environmental organization, said:
If clean hydrogen is going to play a
niche role in the power sector, then that hydrogen must have very
low greenhouse gas emissions at every stage of its production, no
matter how it’s produced.
If hydrogen is not properly stored and
transported, it could also leak into the atmosphere, adding to the
greenhouse effect. The Environmental Defense Fund and other groups say
there is little data indicating whether the industry has a properly
leak-proofed system.
Steven
Hamburg, the fund’s senior vice president and chief
scientist, said:
"We currently do not
have a very clean system for moving natural gas, and hydrogen is going
to be even harder."
“It’s still going to help us in the long term,
without a doubt. So hydrogen has a role to play, but we have to get it
right.”
But there are also signs
that hydrogen and carbon capture technologies are becoming more
viable. Their advocates often point to the Petra Nova project
southwest of Houston, which used a system that captured more than 90
percent of the carbon dioxide from its flue gas — although that
success was tempered by extensive outages, according to the
Energy Department’s 2020 conclusions about
the project.
The energy industry has changed dramatically
since the Obama administration first targeted power-sector emissions
through its Clean Power Plan nearly a decade ago.
In 2014, coal was the country’s top source of
electric power, and the industry was the country’s top source of
emissions, responsible for nearly a third of the nationwide total.
Since, electric power has dropped to No. 2, with emissions down 20
percent, according to EPA data, as power companies closed waves of old
coal-fired plants and replaced them almost exclusively with wind,
solar and new, more efficient gas-burning units.
Despite that change, the grid is still reliant on
fossil fuels, and its plants often support union members and
working-class voters. Gas and coal still fuel roughly 60 percent of
U.S. power. Both the White House and Congress have responded by
pledging billions in new spending to develop new systems — such as
carbon capture — that can preserve jobs and keep the lights on.
Carbon capture typically works through a chemical
process to separate carbon dioxide from industrial gases. In many
existing operations, it is then compressed into a liquid and routed to
storage, or repurposed for industrial uses, keeping it from entering
the atmosphere and warming the planet.
Four power plants nationwide actively use carbon
capture, according to a count from the Clean Air Task Force.
Coal-fired plants in the U.S. have the capability to capture 3 million
to 4 million tons of carbon dioxide per year, and newly announced
projects are on pace to raise that number more than sevenfold by 2025,
according to Bloomberg data published last month in a U.S. Energy
Department report.
The first major
hydrogen-fueled power plant in the United States was completed in
2021, according to S&P Global. It is one ofabout a dozen similar
projects in development, as tracked by the nonprofit Clean
Energy Group, though most are smaller
and sometimes just pilot projects.
Hydrogen production done in conjunction with
carbon capture is expected to soar in the coming years, according to
the Energy Department report, with an expected yearly capacity of 33
million tons of carbon sequestration by 2030, up from nothing today.
Much of that momentum has come from major
subsidies approved in Washington. The bipartisan infrastructure
spending package of 2021 included nearly $18 billion combined for
carbon capture and hydrogen.
Last year’s climate-spending package passed by
Democrats, dubbed the Inflation Reduction Act, then expanded on tax
credits offered for every ton of carbon captured. Electric generators
and industrial companies — including hydrogen producers — can now
claim as much as $85 a ton, up from $50. Hydrogen producers also have
the option of instead claiming a tax credit specifically for them.
While there’s uncertainty around the new EPA
rules, the climate spending law can help make these technologies
competitive with gas, said Bill Newsom, chief executive of Mitsubishi
Power Americas.
Bill Newsom,
chief executive of Mitsubishi Power Americass, said:
"The
key thing is cost. If we can get hydrogen and carbon capture cost
competitive, then yes, it’ll play significantly in the marketplace."
Mitsubishi Power is making the two turbines for
Entergy’s Orange County project, part of a model the company is
selling that can burn 30 percent hydrogen along with gas without any
changes — and go to 100 percent hydrogen with what Newsom said are
“small modifications.” The Japanese company is also the contractor for
a Utah plant that is replacing 1,800 megawatts of coal power.
Newsom said the hope is to start both projects
still at 70 percent natural gas, but to go to only hydrogen
eventually, pending decisions from the plant owners and regulators.
The Utah site also has a production and storage facility, creating the
type of hub that the company hopes will perfect the process and drive
down costs.
An Entergy spokeswoman said the plant may benefit
from those tax credits in the future but did not detail how. The
company declined a request for interviews with executives. State
regulators must still approve use of hydrogen at the plant, and
consumer demand and other market conditions will determine how much of
it is used, a company spokeswoman said.
The Inflation Reduction Act tax credits will be
available later, once the hydrogen gets produced and used — or the
carbon gets captured — but tax lawyers say companies can start
borrowing off those expected credits now to finance deals and new
developments. That’s part of what is feeding this surge of
development, building off consumer demand for zero-emissions energy
that has also been growing in recent years, attorneys and executives
said.
For the Biden administration, that momentum feeds
into its regulatory plans. To impose more stringent limits on
emissions, the EPA must be able to justify the costs it is imposing on
industry. The federal subsidies, combined with these investments and
growing development, should lead to technological improvements that
make compliance less expensive, advocates say.
The advancements will allow the EPA to bolster
the rules it sets through the Clean Air Act, and that’ll help the
country fulfill Biden’s commitment to cut nationwide emissions in half
by 2030 compared with 2005 levels, White House national climate
adviser Ali Zaidi said earlier this year.
Ali Zaidi, said
in a February speech at the Georgetown University Law Center:
"They’re
not going to ignore the fact that there’s a transformation going on in
American industry."
“We have a whole new set of tools — including
through the Bipartisan Infrastructure Law and the Inflation Reduction
Act — that makes our job easier. So number one is using both of those
tools and using them in tandem.”
READ the
latest news shaping the hydrogen market at Hydrogen
Central
This power plant offers a peek into the future, May
1, 2023
Green Play Ammonia™, Yielder® NFuel Energy.
Spokane, Washington. 99212
509 995 1879
Cell, Pacific Time Zone.
General office:
509-254
6854
4501 East Trent
Ave.
Spokane, WA 99212
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