With More Clean Energy on our Grid, Dirty Energy is Evolving too

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As with any niche in nature, in which ecosystems must adapt with competition from a new species, the traditional electric power sector is changing and evolving as more renewable energy is added. For the first hundred years of electric power, coal dominated the field.

Hydropower and geothermal power did not alter the power “ecosystem” in any way, since they provided the same kind of baseload energy as coal did (provided that the coal railcars delivered their loads every twelve hours to stoke each new shift of steam-making coal fire, of course).

But with the recent addition of fuel-free renewable power from wind and solar, the energy grid has the potential for highs and lows that are more unpredictable. When clean wind power is generating an excess, dirty coal plants must now be shut down (in many states) in favor of power from the electricity source with lower greenhouse gases. But that can be hard on the economics of running coal plants.

In response, some enterprising traditional power plants are evolving a new business model: polygeneration. Coal or gas power plants are being reconfigured to manufacture chemical products in addition to electricity, so that they don’t lose money when wind power generation is strong.

Energy Prospects is reporting that Seattle-based Summit Power Group expects to break ground this year on the Texas Clean Energy Project that includes an off-peak urea-manufacturing plant as part of a 400 MW integrated gasification combined cycle coal power plant which will capture 90% of its CO2 and use it to flush out a nearby oil field for enhanced oil recovery.

But, here’s what’s new. Now, rather than just shut down when there is excess wind power on the grid, at no little expense, Summit’s plant will instead swich to manufacturing urea in those off peak hours, using its own un-needed baseload power to run the machinery.

Urea has long had value as a fertilizer, and experts believe there will be increasing demand in a new market created as a direct result of the heavy truck efficiency standards set by the Obama administration last month, because trucks must now burn cleaner fuel in the first ever CAFE standards for heavy vehicles.

Urea helps eliminate nitrogen oxides from truck exhaust through selective catalytic conversion, making an already intensely competitive urea even more in demand.

Summit expects that income will be divided in thirds between the three income streams, a bit less than one third from electricity generation, a bit more than a third from urea sales, and the remaining third from sales of carbon dioxide.

Urea is “much more of a valuable product than electric power in the middle of the night” says James Croyle, the president of Massachusetts-based SCS Energy, which just bought another abandoned carbon-capture IGCC project in California from BP – and also plans to modify it to produce urea on the side.

California’s HECA project was an Integrated Gasification Combined-Cycle facility that would gasify coal or petroleum coke to make a hydrogen-rich syngas. It was initiated back when many fossil energy businesses like BP wanted to be on the right side of expected climate legislation favoring carbon capture at the start of the Obama administration.

But although the Democrats’ climate bill passed the heavily democratic Pelosi House, in the much slimmer (59) Democratic majority in the Senate, Republicans were able to deep six the legislation with their usual Senate filibuster. (Legislation must pass both houses to become law.)

With far fewer Republican seats up for re-election in the Senate than Democratic ones next year, there is no chance of future climate legislation, regardless of which party gets the House majority. So the original plan for HECA has been abandoned, because there is no way to recoup the new investment without a price on carbon.

Yet the electricity business must still comply with a multitude of greatly varying state Renewable Energy Standards. So power plants must find a way to survive the incursion of renewable power into the energy niche, despite the regulatory uncertainty. When SCS takes over HECA, they will use its off-peak power for manufacturing urea. Other examples include Dirty Energy’s Waste Water Can Generate Clean Power.

In the absense of a price on carbon that would have leveled the playing field, instead, some coal power plants like those of SCS in California and Summit Power Group in Texas represent evidence that traditional power is beginning to evolve an alternative survival mechanism, making money on the side from manufacturing.

In Finland polygeneration between power production and industrial production evolved decades ago, in response to laws enforcing cleaner energy, but in reverse. Legislation were passed in the 1950s that encouraged the sale of excess power generated from industrial processes, because by using power twice, its emissions are halved.

Because of that legislation, paper mills there harness the excess heat generated from the industrial process of making paper, and use it to generate electricity which is then sold on the grid.

As a result, Finnish paper mills generate a third of the country’s power. Perhaps, despite our laissez faire approach to legislation, evolution itself will lead to the same blend of electricity production and manufacturing as traditional power companies struggle to find their new place in the cleaner power ecosystem.

Image: Likeness of Dawin, the father of evolution, captured by a colleague.

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