West Virginia bets on hydrogen in gamble to save coal plant


West Virginia leaders eager to save Pleasants Power Station, a top buyer of the state’s coal, include Republican Gov. Jim Justice and Democratic Senator Joe Manchin, who will face off next year in one of the country’s most-watched Senate races. The pair have embraced a residential construction and critical minerals venture that Omnis launched in the state during the last year.

But analysts who study the electricity and critical minerals markets have raised doubts about the proposal, saying they’ve never heard of Omnis and question whether its plans are technically feasible.

“This is a company that as far as we know has never run a coal plant, and they face the additional challenges of converting it in a way that appears unprecedented and untested,” said Seth Feaster, an analyst at the Institute for Energy Economics and Financial Analysis who raised concerns about Omnis’ plans in a note earlier this month. The think tank has criticized attempted coal plant rescues in other states.

As the coal industry has contracted in recent years, states reliant on the fuel have turned to new clean energy technologies with little history of being implemented at commercial scale. In New Mexico, the city of Farmington backed a longshot plan to capture and store carbon at a retiring coal plant. The plan was ultimately abandoned after the plant shut down.

Wyoming is betting on nuclear to replace coal. A Bill Gates-backed startup is developing a nuclear facility using a new reactor design at one coal plant, and studying plans to convert five more coal plants to nuclear.

In West Virginia, Omnis says it is in negotiations to buy Pleasants Power Station from Energy Transition and Environmental Management, a Texas company that had bought the plant with the intention of demolishing it. The 1,300-megawatt coal plant shut down on June 1 after a concerted effort from West Virginia officials to keep it running.

“We believe in this enough that we’ve written a very big check to acquire one very large power plant,” Simon Hodson, who co-owns Omnis with his wife, said in an interview.

Hodson said his company has signed a letter of intent to buy the facility, has secured financing for the acquisition, and hopes to close on the deal by the end of June and take control of the plant by Aug. 1.

He declined to disclose the purchase price, and ETEM representatives did not respond to requests for comment.

The fate of Pleasants Power Station has already drawn the attention of Justice and state lawmakers. At their urging, the state Public Service Commission ordered West Virginia’s largest utility, FirstEnergy Corp., to examine buying the plant. In regulatory filings last month, FirstEnergy said it was holding off because Omnis was trying to finish its purchase of the plant from ETEM.

Hodson said Omnis intends to build a so-called quantum reformer next to the power plant. That facility would heat hydrocarbons at extremely high temperatures to produce synthetic graphite, and generate large quantities of hydrogen as a byproduct. In turn, the hydrogen would fuel Pleasants Power Station to produce electricity.

“We think there’s an opportunity to save the coal-fired plants by retrofitting them,” Hodson said. “We can’t keep shutting power plants down and not expect the cost of power to go up. We’re trying to preserve these plants wherever we can by producing two products.”

Hodson traces his roots to his family’s concrete business in Salt Lake City and claims to have developed the concrete technology used in the construction of One World Trade in Manhattan. He was the CEO of EarthShell Corp., which made biodegradable food packaging for McDonalds before filing for bankruptcy in 2007, citing an inability to secure sustainable long-term funding. Hodson said he left the company before it went under.

Omnis Global Technologies said it specializes in “developing, licensing, and commercializing innovative technologies to aid in the areas of clean and sustainable energy, affordable housing, organic farming, and biodegradable plastics,” according to a filing with the Federal Energy Regulatory Commission, which would need to approve its purchase of Pleasants Power Station.

Graphite is one of the most sought-after materials used in electric vehicle batteries. The Biden administration is seeking to make a priority of domestic graphite production, which is now dominated by China. In 2022, the Department of Energy announced $2.8 billion in grants to makers of battery components, including several firms specializing in graphite production. Omnis is not on that list.

Hodson said his company has developed a form of pyrolysis — a process in which a hydrocarbon is heated at extremely high temperatures to make synthetic graphite — that the world’s largest graphite maker is using for applications in the steel industry. He declined to name the graphite company, citing non-disclosure agreements with vendors.

A critical minerals analyst greeted his claims with skepticism.

“I have never heard of Omnis or Simon,” said George Miller, a senior analyst at Benchmark Minerals Intelligence, a London-based research firm that tracks metals markets. China dominates both the mining of naturally occurring graphite and the production of synthetic graphite.

Pyrolysis and graphite are used for speciality scientific applications, Miller said. But he expressed doubt there is a large enough market to support its use by large graphite makers.

“I am not too sure about scalability for this,” Miller said.

Using hydrogen to fuel a power plant can be similarly tricky because it burns much faster and is less stable than natural gas. General Electric, Mitsubishi Power and Siemens Energy have reported demonstration projects, where they have blended natural gas with hydrogen to run existing gas plants. Mitsubishi is working on a project in Utah that aims to burn 100 percent hydrogen by 2045.

“The whole thing that is really mystifying to me,” said Feaster, the IEEFA analyst. “Let’s say you’re producing graphite, do you need a 1,300MW power plant to do the graphite production? That strikes me as oversized. … The other companies that produce graphite aren’t buying power plants.”

Hodson acknowledged the challenges facing other graphite makers and power companies, but said Omnis has technology to overcome the obstacles after spending 12 years refining its pyrolysis process. Pyrolysis normally generates large amounts of greenhouse gas emissions, but Hodson said he has developed a way to eliminate those by heating the material at temperatures above 5,000 degrees Fahrenheit.

Omnis also intends to use turbine technology that can burn 100 percent hydrogen developed by Zeeco Inc., an Oklahoma-based firm, Hodson said. A spokesperson for Zeeco, which describes itself a world leader in making low emission hydrogen-fired burners, confirmed in an email that it is working with Omnis and had sent a team to Pleasants Power Station to “confirm the viability of converting to hydrogen.”

“Zeeco plans to continue supporting the effort of designing and retrofitting this coal-fired plant so it can be operated on hydrogen if the ownership does, in fact, transfer to Omnis,” Zeeco spokesperson Carter Clancy wrote.

The analysts’ doubts haven’t dimmed Omnis’ reception among West Virginia’s most powerful leaders.

Omnis has launched a series of business ventures in West Virginia since the start of 2022.

Justice attended a groundbreaking ceremony in March 2022 for Omnis Building Technologies, which is building a $40 million facility to manufacture housing materials in southern West Virginia. When the governor sent out a news release announcing the plan, it included a statement from Manchin, who said Omnis was “revolutionizing the industry of residential construction.”

In November, Hodson appeared at a public event with Justice to announce Omnis Sublimation and Recovery Technologies’ plan to invest $60 million in Wyoming County to extract rare earth minerals from coal waste impoundments. Sen. Shelley Moore Capito, a Republican, called the announcement “exciting” and said “the jobs to be created with this partnership will bring even more opportunity to this region.”

Hodson said he was originally drawn to West Virginia by its many coal waste impoundments, which he saw as a potential source of critical minerals. But he decided to expand Omnis’ investments to other areas after driving across the state. He called West Virginia one of the most impoverished societies he had ever seen.

“It’s worse than India, China, Africa. It’s terrible,” Hodson said. “They need jobs back.”

He said he subsequently approached Justice’s economic development team to explore potential investments in the state.

What level of due diligence the governor’s team conducted into Omnis’ track record is unclear.

When asked for background on the company, a Justice spokesperson sent a link to news releases featuring the company and governor. The spokesperson did not respond to a follow-up question about Omnis’ plan to convert Pleasants Power Station to run on hydrogen, which would deprive the state’s coal industry of one of its largest consumers.

A spokesperson for Manchin responded to similar questions with a one-sentence statement, saying, “West Virginia is an energy powerhouse and the continued operation of and re-investment into the Pleasants Power Station would help that legacy continue.”

A Capito spokesperson pointed to recent remarks in which the senator said, “We’re going to do everything we can to help that community, that power plant, and hopefully keep that open in West Virginia.”

Pleasants Power Station has fought to stave off closure in recent years, as cheap natural gas prices, a rising tide of renewables and environmental regulations combined to squeeze coal facilities nationwide.

FirstEnergy, the plant’s former owner, proposed a plan in 2017 to transfer ownership of Pleasants Power Station from the company’s power generation subsidiary to its West Virginia utilities, which operate as regulated monopolies. Critics said the move appeared designed to shield the plant from competition in wholesale power markets. FERC ultimately rejected the plan.

Justice subsequently signed a $12.5 million tax break designed to keep the plant running. Pleasants Power Station was later included in the spinoff of FirstEnergy’s power generation business, which rebranded as Energy Habor.

Omnis’ plans for the facility have gotten an enthusiastic greeting in Pleasants County, where the power plant has long been the largest taxpayer and one of the area’s largest employers.

“They give me no reason to believe they are not only sincere, but they give me hope they can pull off something miraculous with the good Lord’s help,” said Jay Powell, a Pleasants County commissioner who said he had been in meetings with the company over the plant’s future in recent months.

Omnis’ would need federal approval to move forward with the acquisition of Pleasants Power Station. In a filing with FERC, the company asked regulators to approve the purchase by July 24.

For now, the plant is officially listed as mothballed by the PJM Interconnection, the region’s grid operator, through July 31. The designation has allowed Energy Harbor, which continues to operate the plant after its sale to ETEM, to retain Pleasants staff through the end of next month. The hope is those employees will retain their jobs when Omnis takes over, Powell said.

That would still leave a number of technical hurdles for the project to overcome.

Hodson said retrofitting Pleasants Power Station would require swapping out its burner for one that can burn hydrogen and installing a new air handling system to address emissions of acid-rain-causing nitrogen oxides. He estimated the retrofit would take nine to 12 months, and said the company would burn coal to generate power while the upgrades were made.

Eventually, the quantum reformer will produce 200,000 tons of hydrogen annually, enough for Pleasants Power Station to run at its full listed capacity, Hodson said. He acknowledged the doubts facing the company, saying Omnis will need a few more months to prove it can deliver.

“Then it will be done and it will be proven,” he said.



Source link: https://www.politico.com/news/2023/06/25/west-virginia-hydrogen-coal-plant-00102047

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