SCS Energy agrees to take over HECA and to move project forward

Hydrogen Energy California

May 23, 2011

 

SCS Energy agrees to take over HECA  and to move project forward  

 SCS Energy, an independent power producer involved in clean power projects nationally, has executed a conditional agreement to take over Hydrogen Energy California (HECA) and to move a modified power project forward through permitting, construction and operation.

 Earlier this year, HECA’s original investors — BP and Rio Tinto — entered into discussions with the U.S. Department of Energy (DOE) to seek ways to sustain the project upon their exit by replacing their investment.  These efforts resulted in SCS Energy proposing a viable solution that will enable the continued feasibility of the project.

 BP and Rio Tinto had invested $55 million each to lay the groundwork for HECA’s feasibility.  “Both companies are pleased to see SCS Energy develop the project in a way that will create value for its core business,” according to Jonathan Briggs of HECA.

 DOE has invested $54 million in the project under a financial assistance agreement with HECA; these funds were provided by the American Recovery and Reinvestment Act.  DOE is working with BP, Rio Tinto and SCS Energy to build on this investment and ensure HECA can access the remaining $354 million in financial assistance under HECA’s Clean Coal Power Initiative (CCPI-3) award.  

 The HECA project  is in an advanced permitting stage and has strong support from numerous communities nearby the project’s location.  

 SCS Energy intends to  use a design that has been several years in development to add polygeneration capabilities to the HECA project. This modification to the project allows integration of electricity generation, greenhouse gas sequestration, and urea production in a way that would allow the plant to use the hydrogen generated from fossil fuel to generate electricity, urea or both depending on market demand. Urea is widely used in fertilizers for agriculture.

 Also, the plant still will capture 90% percent of the CO2 produced and transport it to an adjacent oil field where it will be used for enhanced oil recovery and sequestration in deep underground geological formations.  

 The approach of producing both electricity and urea helps address the economic challenge of creating a viable business model to cover the high capital costs of the plant and its carbon capture capabilities.    


Strong community and regulatory support for project 

 HECA has benefited from strong support from local communities where the project would be built.  The case for building the project in Kern County was upheld by local and state experts and the many community leaders that supported the environmental benefit and economic development potential of the project.

 DOE selected the project for a significant award of financial assistance because it has great potential to demonstrate the commercial viability of solid-fuel based low-carbon power plants using CCS. 

 The California Public Utilities Commission also supported the project by approving Southern California Edison’s application to expend up to $30 million to study the feasibility of the project for California ratepayers. 


About SCS Energy

 SCS Energy is a private power plant development company headquartered in Concord, Massachusetts.  The company’s mission is to create high-value power generation assets that bring excellent returns to investors while leading the industry in environmental stewardship and climate change mitigation.

 For more information, see SCS Energy



 







 




Project description 

HECA is designed to be one of the world’s first hydrogen-fueled power plants with carbon capture and storage (CCS).  It will transform solid fossil fuels into clean hydrogen, which will fuel turbine generators, producing clean, low-carbon electricity.

At the same time, the plant will capture 90% of the carbon dioxide produced, selling it to a nearby oil field operator that will use it for enhanced oil recovery.

Under new investor SCS Energy, the plant will be redesigned so that the hydrogen produced can be used either to power an electrical generator or as a feedstock for creation of urea, a valued organic compound.





 




Project status


Location: The HECA project completed its land purchase for the plant site and also received preliminary county approval on its required cancellation of the Williamson Act contract.

Power Plant Siting:  HECA has continued to achieve its regulatory milestones in the permitting process with the California Energy Commission (CEC), including issuance of the Preliminary Staff Assessment (PSA) Part 1, completing CEC Data Requests Round 4, and pursuing issuance of PSA Part 2.

Air Quality Permitting:  HECA has received a Final Determination of Compliance (FDOC) from the San Joaquin Valley Air Pollution Control District for its required air permit. And, HECA has continued to work through federal air quality permit filings with the Environmental Protection Agency.  

CO2 Off-take: Oxy of Elk Hills has submitted documentation to the relevant agency for the project’s CO2 to be used for Oxy’s injection into the Elk Hills Reservoir adjacent to the HECA site in Kern County.

Water: HECA has completed negotiations on its water contract with Buena Vista Water District. 

Engineering: HECA has continued to progress its technical definitions in its Front End Engineering & Design (FEED) phase.






 




Additional information


More information on the HECA project can be found on the website at www.HECA.com


Contact Tiffany Rau, HECA Policy and Communications Manager, for additional information.


email: tiffany.rau@hydrogenenergy.com

phone:  562-276-1510

 




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