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Exploring new revenue streams at modern power plants

Through the innovation of integrated gasification combined cycle (IGCC) plants being constructed in North America, power producers are searching for new and innovative ways to sell byproducts. The benefit of an IGCC facility is in the plant’s capability to potentially generate even more revenue from byproducts than from the actual power output.

During a session at the Oil Sands and Heavy Oil Technologies Conference in Calgary, Alberta on July 25, speakers discussed modern power projects that are exploring innovative revenue possibilities.

Harry Morehead, director of gasification and IGCC sales and marketing for Siemens (NYSE: SI), highlighted Summit Power’s Texas Clean Energy Project, which is being constructed in Penwell, Texas. The 400 MW IGCC project is equipped with 90 percent carbon dioxide (CO2) capture, equating to 2.7 million tons/year of captured CO2. This, Morehead said, is where one of the opportunities for byproduct sale exists. Most of the CO2, 2.5 million tons/year, will be purchased by Whiting Petroleum, Century Energy Resources and Blue Strategies LLC, and then delivered to the companies’ various oil fields via pipelines. The remaining CO2 will be delivered to a fertilizer company.

Carbon dioxide isn’t the only potential byproduct revenue stream from the Texas Clean Energy Project, Morehead said. Captured urea, which amounts to 710,000 tons/year, can also be sold for reuse to the fertilizer company that purchases the CO2.

At this particular facility, the revenue stream for the CO2 and urea byproducts will actually be greater than the revenue gained through generating power, Morehead said. Power generation will account for 30 percent of the plant’s revenue; urea 46 percent; CO2 21 percent, and argon and minor products such as sulfuric acid and inert non­leachable slag will generate 3 percent of the revenue. Construction on the plant will be completed this fall.

Dennis Williams, vice president of SNC-Lavalin, discussed opportunities for coal-fired power plants to sell recovered steam and CO2 to oil fields or projects in the Alberta Oil Sands. One process being explored by a pilot project in the U.S. is the Benfield Process, which combines a pressurized fluid bed process with carbon capture. “You have to find a revenue for the CO2,” Williams said. The main deterrent for such projects, at this point, he said, is the high cost of carbon capture and storage. “Will the economics make sense?”

Williams said plants using pressurized fluid bed and CO2 capture have been active in Sweden, Germany and Japan, but so far only test projects are in operation in North America.

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