Nebraska utility partners with California firm in becoming first U.S. utility to produce electricity from hydrogen

Source: By Henry J. Cordes / Omaha World-Herald staff writer • Posted: Monday, April 20, 2015


HALLAM, Neb. — In a push to reduce its greenhouse gas emissions, the Nebraska Public Power District is planning what’s believed to be the first electric plant in the country powered by clean-burning hydrogen.

The green energy initiative announced Friday is part of a unique collaboration between the state’s largest utility and a California-based manufacturer that will also bring 100 new jobs to the state.

Monolith Materials makes carbon black, a product used in numerous consumer products, including tires, plastic, ink and cellphones. And hydrogen will be a byproduct of Monolith’s carbon black manufacturing process.

Monolith plans to build its plant adjacent to NPPD’s coal-fired Sheldon Station generating plant near Hallam, just south of Lincoln. In turn, NPPD will convert one of its two boilers at Sheldon from coal to hydrogen, which it will get directly from the Monolith plant.

“This is a great day for Nebraska and the environment,” Gov. Pete Ricketts said at a press conference.

Monolith hopes to open the plant by next year. After ramping up production, it expects by 2019 to produce enough hydrogen to near-continuously fire the Sheldon generator.

Friday’s announcement was the latest in a recent flurry of moves by the state’s public utilities to reduce the amount of carbon their plants spew into the air. Federal regulators are expected later this year to issue new rules cracking down on power plants, the largest source of carbon emissions in the United States.

The Omaha Public Power District announced last summer it will be shutting down some coal burners and possibly converting others to natural gas. OPPD, NPPD and Lincoln Electric System all have invested in wind power.

Pat Pope, NPPD’s CEO, said the beauty of the new hydrogen burner is that it will produce no greenhouse gases at all. The waste product left when hydrogen is burned: water.

Pope said the 125-megawatt hydrogen turbine will reduce NPPD’s carbon emissions by 10 percent — some 1.1 million tons — and bring NPPD’s energy portfolio closer to 50 percent carbon-free.

Couple the environmental gains with the good-paying new jobs and hundreds of millions in new investment and the project is truly a win-win for the state, Pope said. The 100 workers at the Monolith plant will include mechanical engineers, managers and production workers. Officials said the plant also could produce hundreds of spin-off jobs.

Environmental groups in Nebraska applauded NPPD’s latest effort to go green. A Sierra Club representative also suggested the utility shut down Sheldon’s remaining coal turbine and employ more wind or solar energy.

“Starting the shift away from coal is an important first step for NPPD to reduce its pollution,’’ said Graham Jordison, an organizer with the Sierra Club’s green energy campaign in Nebraska.

While some manufacturing plants around the country burn hydrogen byproducts to produce energy for their own use, NPPD officials believe their plant will be the first on any significant scale by an electric utility.

The development started with Monolith looking for a cleaner way to make carbon black. It’s normally produced from heavy oil, with much oil burned in the process. The company embraced a patented process that instead uses natural gas, breaking it down into carbon and hydrogen.

The company opened a pilot plant near its home in the San Francisco area and then began to search for a spot to build a large-scale production facility. Company officials had several key criteria, said Rob Hanson, the company’s co-founder.

They wanted a place with cheap electricity — the plant could ultimately become the largest single user of electricity in the state. They wanted multiple sources of natural gas. And they needed a utility to partner with. After considering a number of states, including Texas, New York, Washington, Louisiana, Wyoming and Iowa, they picked Nebraska.

Hanson said they liked Nebraska’s electric rates — ranking 14th nationally last year in average cost of electricity — and NPPD’s diverse mix of power sources. Several natural gas lines also run near the Sheldon plant.

The company will also be receiving economic incentives, including state tax credits under the Nebraska Advantage Act, $150,000 in state job training funds and a reduced electric rate available to new or expanding companies.

The hydrogen burner will actually represent a third life for Sheldon. In the 1960s, it was the site of Nebraska’s first nuclear plant.

“Today we will celebrate another first for this facility,’’ Pope said.