Hydrogen, Not Coal, to Be Burned at Nebraska Power Plant

---

Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--The Nebraska Public Power District (NPPD) (Columbus, Nebraska) plans to switch from coal to hydrogen at Unit 2 of its Sheldon Power Station. The hydrogen will be a by-product of a carbon-black manufacturing plant that Monolith Materials Incorporated (Redwood City, San Francisco, California) plans to build next to the Sheldon station, near Lincoln, Nebraska.

Monolith's planned carbon-black plant will use natural gas, not crude oil, to make carbon black, an industrial product used in vehicle tires, electronics, plastics, inks, paint and toys. If all goes well, Phase I of Monolith's Hallam Carbon Black plant will be operating late next year, producing about 10,000 tons of carbon black on an annualized basis, Rob Hanson, Monolith's co-founder and chief commercial officer, told Industrial Info.

The first phase of the project will cost an estimated $30 million to construct. The company then aims to expand the plant's production capacity by 2019 to between 150,000 tons and 250,000 tons per year, Hanson said in an interview. Building out the plant to full scale will cost another $350 million. By 2019, NPPD's 120-MW Sheldon Station Unit 2 will begin burning hydrogen, becoming the nation's first hydrogen-fired generating unit.

The innovative partnership, announced in April, has a lot of details to work out. Removing Sheldon Unit 2's existing coal-fired boiler and replacing it with one fired by hydrogen is expected to cost about $120 million. Later this month, NPPD expects to issue a request for proposals (RFP) for engineering, procurement and construction (EPC) firms to perform the work. The utility expects to select an EPC firm later this year. For his part, Hanson said the planned Nebraska carbon-black plant has selected an EPC firm, but he declined to name it.

"U.S. production of carbon black has stagnated in recent years, at about 2 million tons annually, but a number of tire-manufacturing plants are being built in the U.S., and that will drive demand for new carbon black," Hanson said. "We either meet that need with domestically produced carbon black, or we import it."

Hanson predicted a U.S. carbon black shortfall by 2018, one year before his planned plant reaches full production capacity: "Existing carbon black manufacturers are unable to meet this new demand, in part because they are investing heavily to reduce their pollution footprint and settle legal problems. The manufacturing process used by these legacy producers involved combusting fuel oil, which created pollution, but the Monolith process uses electricity and natural gas to make its carbon black, with hydrogen as its only byproduct."

"Our manufacturing process is really clean," Hanson continued. "It's dramatically better for the environment than existing carbon black plants."

The company said its manufacturing process emitted significantly less carbon dioxide (CO2) and oxides of sulfur (SOx) and nitrogen (NOx), compared with the current oil-based processes. Hanson noted that Monolith built a demonstration-sized carbon black manufacturing plant alongside the San Francisco Bay, where environmental regulation is notoriously tough.

Seaport is the name of Monolith's demonstration facility in California. It began operating last August, Hanson said. Monolith, founded in 2012, is backed by KERN Partners (Calgary, Alberta), an energy sector private equity firm, and First Green Partners (Minneapolis, Minnesota), an investment company focused on industrial technologies in energy, agriculture and materials.

Burning hydrogen at Sheldon Station Unit 2 will reduce CO2 emissions at that unit to roughly zero--a reduction of about 1.1 million tons of per year, NPPD spokesman Mark Becker told Industrial Info.

"The real driver to change boilers at Sheldon Unit 2 is the president's Clean Power Plan," Becker said in an interview. That plan, currently being litigated in the federal courts, aims to reduce CO2 emissions from the nation's power plants. "We've been looking into carbon sequestration for a while. We started talking to some folks from Monolith at a conference in 2014, and after the conference was over, we continued those discussions."

Becker added that the parties signed a letter of intent a year later.

"We are embarking on a new chapter in the history of Sheldon Station and electric generation in Nebraska with the decision by Monolith Materials to locate in Nebraska," NPPD President and Chief Executive Officer Pat Pope said in a statement April 17. "Sheldon Station has always been a place of firsts--the first nuclear plant in Nebraska, and now the first utility-scale, hydrogen-powered generator. We are very proud of this facility and the people who work here."

Nebraska Governor Pete Ricketts added: "This is an example of the next generation of American innovation and energy production that will also have a positive economic impact in Nebraska, and deliver clean and affordable energy to the state. This private business-led solution has the potential to support 600 new jobs and hundreds of millions of new capital investment in the state of Nebraska."

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.