April 13, 2009
Where coal and clean tech meet
On Monday I drove to Southern Massachusetts to visit GreatPoint Energy's $37 million Mayflower Clean Energy Center, a demonstration plant for converting coal to natural gas. Built down the road from the state's largest coal plant at the mouth of the Taunton River, the plant started producing natural gas last month and is now gathering data to optimize the operation.
As a technology reporter, it's fascinating to see the energy industry's version of "hardware"--a 200-foot-high reactor, silos holding thousands of pounds of feedstock, and all manner of pipes of valves. I also got to wear a hardhat.
Most people associate green tech with renewable energy--sun, wind, biomass, geothermal. In reality, a lot of energy technology is aimed at making conventional fuels cleaner, which is exactly GreatPoint Energy's mission: to convert dirty coal into cleaner-burning natural gas and to bury carbon dioxide emissions underground.
From a business perspective, GreatPoint Energy is one of many green-tech start-ups taking those first steps from labs to commercialization--a precarious transition that few have been able to make. The project itself is a test case for some potentially significant energy technologies--gasification and underground storage of carbon dioxide.
Gasification, which appears to be undergoing a quiet resurgence in energy, is being used to turn many different feedstocks--coal, biomass, and even municipal trash--into a gas that can later be burned for heat or electricity. Whether gasification technologies qualify for "clean energy" government incentives is still unclear, but backers say that it's a cleaner process than burning.
Successful storage of carbon dioxide, meanwhile, is one of the keys to making coal less polluting. The idea of so-called clean coal is to make electricity with coal, while removing pollutants and storing carbon dioxide underground at a power generation plant.
GreatPoint Energy's hydromethanization process treats coal with steam, mixes it with a catalyst, and then puts that mixture into a gasifier--essentially a 200-foot-tall metal tube under high heat and pressure.
Inside the gasifier, the feedstock breaks down into different gases and the solid material collects at the bottom. GreatPoint Energy engineers are tuning the process to generate and separate methane, the primary component of natural gas, and carbon dioxide.
The natural gas can be shipped in existing pipelines and used for heating or to make electricity.
What about the carbon dioxide, a greenhouse gas? GreatPoint Energy's plans call for building plants in areas, such as Wyoming, where there are both coal and existing oil and gas wells. Injecting CO2 into these wells lets drillers extract more from wells, while keeping CO2 out of the atmosphere. Otherwise, company executives envision using underground geological formations like salt caverns to store the CO2.
Using existing scrubbing equipment, GreatPoint can remove other pollutants, including mercury, nitrogen, and sulfur. An important facet to its test facility is finding methods for recuperating the catalyst and those pollutants, which can be sold for other uses such as ammonia fertilizer.
The company's analysis found that it can produce natural gas with a lower carbon footprint than extracting natural gas from the ground, assuming a carbon storage site can be found. Its financial target is making gas at between $4 and $5 per million British thermal units (MMBtu), which is in the range of today's prices but lower than natural gas prices before the global recession hit.
At the facility on a piece of land called Brayton Point, the company plans to spend the next several months fine-tuning the process to produce the desired gases and to deal with different qualities of coal, which vary greatly.
Next stop: China
As a company, GreatPoint Energy has gotten a fair amount of attention. It attracted renowned venture capital company Kleiner Perkins as one of its first investors, and a $115 million investment from a collection of energy corporation companies was the largest green-tech investment in 2007.
Massachusetts Governor Deval Patrick played a key role in getting its demonstration facility sited and quickly approved. It took just 18 months to build and get its plant online.
Its next project is to open a larger pilot facility in China at a coal-fired power plant with Datang Huanyin Electric Power, one of the biggest polluters on the planet. "If we can show (Datang) that they can make more money being clean rather than dirty, then we can make a real impact," says GreatPoint Energy CEO Andrew Perlman.
These facilities aren't cheap: the pilot plant in China will cost between $100 million and $200 million, financed primarily by Datang. A full-scale operation would cost $1 billion to build, a reminder of how vital it is for start-ups to get access to large amounts of capital, either through equity partnerships with large corporations or government loans.
Back home in Massachusetts, the company is seeking to build expertise in the core technologies behind its process--carbon capture, gasification, and mineralization, through a partnership with the University of Massachusetts at Dartmouth, said Chief Financial Officer Daniel Goldman.
"The concept is to create a 'green line,' a research and development corridor down here," Goldman said. "There's been a lot of research in these fields but very little commercialization."