Startup Brings Carbon-Cutting Tech to Nebraska

Feb. 28, 2017, 6:45 a.m. ·

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A partnership between a Silicon Valley startup and Nebraska’s largest utility will create jobs while reducing emissions from a coal-fired power plant.

The Sheldon Station power plant hums day and night near the small town of Hallam, about 25 miles south of Lincoln. In dim yellow light on the ninth floor, plant manager Chris Cerveny opens a narrow door to reveal a long tunnel.

“This conveyor goes all the way down to the ground level, and that's where we bring coal into the plant twice a day,” Cerveny said.

Sheldon Station’s two boilers burn that coal to create steam, which powers a turbine to generate electricity. But in a few years, that will change.

“We like to refer to this as the new chapter in Sheldon's history, and it's the hydrogen chapter,” said John Swanson, NPPD’s generation strategy manager.

Swanson said he’s called the “rock turner”—tasked with finding innovative ways of generating energy for the state’s largest utility.

“And we've looked under a lot of rocks and not found anything near this attractive in the past,” he said.

One of Sheldon Station’s coal-fired units will be converted to burn hydrogen gas—cutting its carbon emissions nearly down to zero. Sheldon’s other unit will still burn coal. The source of that hydrogen gas will be a new advanced manufacturing plant built by a California-based startup called Monolith Materials.

“We manufacture two products: one is called carbon black, it's a chemical that's used as raw material for tires, it's used in plastics, it's used in batteries, it's really ubiquitous material,” said Robert Hanson, Monolith co-founder and chief operating officer. “And then we also make hydrogen.”

Most carbon black is made from heavy petroleum. Hanson and his partner, both Stanford-educated mechanical engineers, developed a new method to make it from natural gas. Natural gas is CH4—one atom of carbon and four atoms of hydrogen. They use electricity to split apart the atoms of hydrogen and carbon. “The emissions from our process are roughly 90 percent lower than the conventional way of making these products,” Hanson said.

“Normally when you make hydrogen from CH4 (natural gas), you end up with CO2 as a byproduct, which is a greenhouse gas. However if you're essentially taking the carbon and directly locking it up in a solid form, which is carbon black, you avoid the CO2 emission, which is outstanding,” said Keith Wipke, fuel cell and hydrogen technologies program manager at the National Renewable Energy Lab in Colorado.

“This is the first major power plant that I'm aware of that will be combusting hydrogen to produce electricity,” Wipke said. Hydrogen plays a part in how some other utilities produce power but not in the same way or on the same scale, Wipke said.

“The reason we don't have more hydrogen burning plants, [is because] hydrogen is considered somewhat of an exotic fuel,” NPPD project engineer John Meacham said. “It has, to this point, been very difficult to obtain in quantities needed to operate a power plant.”

Meacham said Monolith will generate enough hydrogen that Sheldon’s unit can continue to produce the same amount of power it does now, about 120 megawatts. But to make that much hydrogen takes a lot of natural gas, and a LOT of electricity. Once the factory is up and running, Monolith will become the largest electric consumer in the state, using about as much electricity as the city of Lincoln.

“They need a lot of electricity to crack those molecules. NPPD will sell them electricity, we will then buy that by-product hydrogen back. So it's really kind of a complimentary relationship between their process and our power plant,” Meacham said.

Because this hydrogen is derived from natural gas, it’s not considered renewable energy. Nebraska’s other major utilities (LES and OPPD) have been more aggressive than NPPD in finding new sources of renewable energy, mostly wind power. But NPPD seems focused on their overall carbon footprint. The utility estimates that converting one Sheldon unit from coal to hydrogen will reduce their total carbon emissions by approximately 10 percent.

From the tenth floor of one of Sheldon Station’s boilers, Chris Cerveny points to where Monolith’s factory will be built less than a mile away.

“So the red building is the Hallam fire station…Monolith is in between there and us,” Cerveny said.

Right now, it’s just a plot of dirt. Monolith broke ground last fall, and estimates their whole plant will be up and running by 2020 or 2021. Hanson of Monolith said they’ll hire between 100 and 125 full-time employees at competitive salaries. He said they considered numerous factors in deciding where to build their first commercial plant.

“Things like infrastructure, availability of natural gas, of electricity, availability of rail. We also looked at cost of living and labor force, and what partnerships we could develop in the states,” Hanson said.

He said cheap, stable electric rates and the public power partnerships are what ultimately led them to pick Nebraska. And while other states have expressed interest in future carbon black plants, “we're pretty committed to Nebraska,” Hanson said. “So if we do have more than one location, it may be more than one location in Nebraska.”

John Swanson said the partnership is a truly unique opportunity for NPPD.

“The hydrogen is, in this case, a byproduct, which is rare and unusual. And in this quantity, extremely rare and unusual,” he said. Monolith also agreed to sell NPPD its hydrogen at a lower price point.

All of which means this kind of coal-to-hydrogen project is unlikely to be repeated by other utilities elsewhere. But Swanson said NPPD is already looking at the possibilities of expanding to other coal plants in the state.

“We are doing our best to convince Monolith to make Nebraska the carbon black capitol of the world,” he said. So it's possible that hydrogen could take the place of a little more coal in Nebraska’s energy mix in the future.