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May 21, 2007
BP and Rio Tinto Plan Clean Coal Project
for Western Australia
BP and Rio Tinto today announced that
they are beginning feasibility studies and work on plans
for the potential development of a A$2 billion (US$1.5
billion) coal-fired power generation project at Kwinana in Western
Australia that would be fully integrated with carbon capture
and storage to reduce its emissions of greenhouse gases.
This will be the first new project for Hydrogen
Energy, the new company launched by BP and Rio
Tinto last week, subject to regulatory approval.
The planned
project would be an industrial-scale coal-fired power and carbon
capture and storage project. It would generate enough electricity
to meet 15 per cent of the demand of
south west Western Australia, while each year capturing and
permanently storing about four million tonnes of carbon dioxide
which otherwise would have been emitted to the atmosphere.
The
project would gasify locally-produced coal from the Collie region
to produce hydrogen and carbon dioxide. The hydrogen would
be used to fuel the power station and around
90 per cent of the carbon dioxide would be
captured and stored permanently in a deep underground geological
formation.
The costs of this low-carbon hydrogen-fuelled power generation
are higher than those of traditional power generation. For
the project to be economic and able to compete
effectively in the electricity market, it would require appropriate
policy support and a regulatory environment which recognises and
encourages the low-carbon benefits it can deliver.
Subject to
the successful outcome of detailed engineering and commercial studies,
and providing government policy is in place to make
the project commercially viable, a final investment decision to
develop the project could be made in 2011, with
the project coming into operation after a three year
construction period.
Speaking at today’s announcement in Perth, Lewis
Gillies, named last week as chief executive of Hydrogen
Energy, said:
“This has enormous potential to affect the
way that coal will be used for power generation
across the world. Clean coal technology such as this
will be essential to reducing greenhouse gas emissions, both
in Australia and globally.” “This project could play an
important role in influencing our future power mix, strengthening
Australia’s energy security while also minimising our impact on
the environment. Hydrogen Energy is now working to deploy
this technology as widely and rapidly as it practically
can.”
The project’s gasification facility and power station would
be located in Kwinana, 45km south of Perth, alongside
BP's refinery and Rio Tinto’s Hismelt facility. The power
station would be capable of producing 500 megawatts of
low-carbon electricity or enough power for half a million
homes. At the same time, about four million tonnes
of CO2 each year would be captured, transported and
permanently and securely stored in a geological formation deep
beneath the seabed of the Perth basin. This would
be the first hydrogen-fuelled power project to store CO2
in a saline formation, a type of geological structure
which is more common globally than suitable oil and
gas reservoirs.
Kwinana is an ideal location for a project
of this type. The availability of a suitable site
immediately adjacent to BP’s refinery, Rio Tinto’s Hismelt plant
and other industrial operations which may benefit from its
output provides synergies and potential additional revenue streams that
greatly assist the commercial viability of the project. Increasing
power demand combined with growth in the Perth area
also provides an attractive market for new power generation.
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