NPPD eyes hydrogen as conversion fuel at coal-fired unit

Nebraska Public Power District's embrace of hydrogen as a conversion fuel at the public power entity's 125-MW coal-fired Sheldon Station Unit 2 could lead to a collaboration with Finland-based Wartsila to convert hydrogen into methanol to use as fuel in Wartsila engines.

NPPD plans to change Sheldon Unit 2 near Hallam, Nebraska, from coal to hydrogen between 2021 and 2023, according to John Swanson, NPPD’s generation strategies manager. The hydrogen will flow through a pipeline from a facility Monolith Materials is building across the road from the generating unit. Monolith is building a production facility across the road from Sheldon Station to manufacture carbon black, which is used in tires, cell phones, computers, wiring, etc. The process to make carbon black produces hydrogen as a by-product

Why hydrogen?

"We can still produce megawatts at Sheldon 2 but hydrogen is cleaner than coal," Swanson said. "You get water and heat when you burn hydrogen. Our emissions will be much cleaner. We'll also be making megawatts at a lower carbon intensity."

Any safety concerns with burning hydrogen to generate electricity are being addressed by the utility. "As long as it is engineered with proper safeguards, then hydrogen can be handled safely as it is today in chemical and petroleum refining facilities," he said.

The price tag for the Sheldon conversion project is in the neighborhood of $100 million, much of which will be paid for by Monolith. "We know the technology works," Swanson said. "We're working on an emissions profile now, so we can initiate the permitting process." NPPD has a contract with Babcock & Wilcox "to do enough preliminary engineering on the front end so we know what the emissions profile is so we can start the permit process."

NPPD has received positive feedback about the project in its discussions with local, state and federal regulators, he noted. "They're very much in favor of the whole project."

NPPD has a signed agreement to purchase the hydrogen output from Monolith. "We are the owners of the hydrogen," Swanson said.

Monolith is expected to turn out so much hydrogen from its production of carbon black at the Hallam facility that "you may not be able to swallow it all," Swanson said. Hence, the potential partnership with Wartsila.

Hydrogen has many uses. It can be used to power cars and buses and is a valuable chemical building block. "If you take hydrogen and combine it with carbon dioxide, you can make methanol," Swanson said. "It can be used as a fuel and used in chemical processes."

NPPD and Wartsila recently entered into a memorandum of understanding to study the development of a business case for the use of alternative fuels with Wartsila's generating sets. The aim of the business case is to achieve a technically and commercially viable solution that would allow NPPD to proceed with an industrial-scale pilot project.

Knowing it may have excess amounts of hydrogen in the future, NPPD approached Wartsila about the possibility of using the hydrogen combined with CO2 to make methanol, Swanson explained. It is unclear as to if and when the non-binding MOU may be transferred into a firm agreement.

"There's going to be another meeting in January in Nebraska to talk about preliminary modeling, etc., and what the next step will look like for a business case," he said. NPPD would like to complete its business case by the end of the first quarter of 2019.

NPPD sees its Sheldon conversion efforts and budding relationship with Wartsila as innovative. "This is a positive for public power," Swanson said. "What we're doing here strongly challenges the arguments that public power entities sometimes lack innovation.”