UPDATED: 10/23/2017 — see Change Log. No further updates expected.

OWNER: Hydrogen Energy California (HECA), (SCS Energy LLC)
PROJECT: Greenfield power plant, fertilizer byproduct[memberful does_not_have_subscription=”1314-ammonia-industry-annual-subscription,1311-ammonia-industry-monthly-subscription,3338-ammonia-industry-30-day-subscription”]

COST (reported): $4+ billion
JOB CREATION (reported): 200 permanent, 2,400 construction
START-UP DATE (reported): None, originally 2018

CAPACITY	USGS[1]	COMPANY[2]	PERMIT[3]	ADJUSTED[4]
Ammonia		[None given]	[Membership required]	[Membership required]
Units: stpd, stpy, mtpd, mtpy = short/metric tons per day/year. [1] United States Geological Survey (USGS) Mineral Yearbook, Nitrogen gives capacity in metric tons per year, calculated as “engineering design capacity adjusted for 340 days per year of effective production capability,” rounded to three significant digits. Source: most recent year, Table 4: Domestic Producers of Ammonia, http://minerals.usgs.gov/minerals/pubs/commodity/nitrogen/. [2] Company announcements give no capacity data, except “about one million tons” of fertilizer per year. [3] [Membership required]. Sources: linked below. [4] [Membership required]. See Methodology.

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SUMMARY STATUS: On hold, indefinitely
Despite years of development, this “clean coal” project never came together. The local oil field backed out, leaving HECA in an existential crisis with no way to sell or sequester its CO2 and, in March 2016, the project put itself on indefinite hold, by withdrawing its application to the CEC.

COST: $4+ billion, originally $2.8 billion
JOB CREATION: 200 permanent, 2,400 construction
START-UP DATE: None, originally 2018
LIKELIHOOD: Dead — see Methodology

CAPACITY	USGS[1]	COMPANY[2]	PERMIT[3]	ADJUSTED[4]
Ammonia		2,080 stpd		688,735 mtpy
Urea		2,208 stpd GROSS 1,700 stpd NET		731,118 mtpy GROSS 562,908 mtpy NET
Nitric Acid		488 stpd		161,588 mtpy
UAN		1,400 stpd		463,571 mtpy
Units: stpd, stpy, mtpd, mtpy = short/metric tons per day/year. [1] United States Geological Survey (USGS) Mineral Yearbook, Nitrogen gives capacity in metric tons per year, calculated as “engineering design capacity adjusted for 340 days per year of effective production capability,” rounded to three significant digits. Source: most recent year, Table 4: Domestic Producers of Ammonia, http://minerals.usgs.gov/minerals/pubs/commodity/nitrogen/. [2] Company announcements give no capacity data, except “about one million tons” of fertilizer per year. Partners Fluor and Mitsubishi Heavy Industries. [3] Air permit documents do not give product capacities. Sources: linked below. [4] Adjusted Capacity is in metric tons per year assuming operations for 365 days per year; based on capacities given in company presentations. See Methodology.

FEEDSTOCK: Coal (75%), Petroleum Coke (25%)
END PRODUCTS: Electricity, Carbon Dioxide, Urea, UAN

RESEARCH NOTES:
In March 2016, HECA put itself on indefinite hold by withdrawing its application to the CEC, saying:

“[HECA] continues to believe that the HECA site, over which [HECA] retains control, is well suited to carbon sequestration … Preliminary assessments of the geologic storage potential at the HECA site have concluded that shifting to a saline formation injection on-site has a high potential for success.
Notwithstanding the foregoing, the timeframe for deploying a project such as HECA has been longer than was anticipated … and [HECA] looks forward to working on a future iteration of this important and innovative project.”

HECA had been one of the US Department of Energy’s (DOE) flagship “clean coal” projects, designed “to demonstrate the capture and underground storage of carbon dioxide” in a commercial power plant. It was going to have been an IGCC power plant, with generating capacity of 300 MW net (400 MW gross), using CCS technology, and a feedstock of 75% coal and 25% petroleum coke.

Originally developed by BP and Rio Tinto, it was sold in 2011 “because the project did not meet their requirements for economic viability.” The DOE helped HECA to find a new owner, SCS Energy, who reconfigured the project with changes that saw the budget rise from $2.8 billion to $4 billion, and the value of the DOE’s “cooperative agreement award” under ARRA rise from $308 million to $408 million.

As part of the redesigned project, HECA became a polygeneration power plant that would also produce nitrogen fertilizers at a rate of “about one million tons” per year.

According to a DOE audit from 2013, the addition of fertilizer production “reduced the risk of the project by … adding a second source of income,” despite contributing to the vast increase in costs. Unfortunately, this risk reduction “actually represented a substantial increase in upfront risk to the Department [of Energy] by allowing HECA to substantially decrease its cost share in the early stages of the project.”

Despite DOE support, HECA stalled. In July 2015, the CEC, under pressure from community and environmental opposition, gave HECA six months to get its act together or risk losing regulatory support. Then, at the end of September 2015, $122 million of DOE funding was withdrawn because it had not been spent in time. According to the DOE, “HECA has made a request to extend the project, and DOE is evaluating the path forward.”

The CEC’s main problem with HECA was “the apparent loss of the CO2 off-take agreement and the carbon sequestration site,” without which a “clean coal” project is pointless. HECA was designed to achieve “at least 90% CO2 capture efficiency,” and expected to send 2.6 million tons of carbon dioxide every year via pipeline to the Elk Hills oil field, 4 miles away. However, the drop in the global price of oil made it very difficult to see the economic benefits of EOR, a technique that pumps carbon dioxide into old oil fields in order to extract more oil. Once Elk Hills withdrew from the project, the CEC questioned whether HECA was viable and gave the project until January 2016 to prove it deserved to proceed.

In July 2015, instead of trying to find a new CO2 off-taker, HECA planned to “forgo any discussions with oil producers at this time and permit the project as a CCS project without EOR associated with its carbon sequestration.” Apparently, “the economic strength of the HECA project makes it financially feasible to do CCS without a revenue stream from the sale of CO2 and to cover the cost associated with a CCS program,” primarily because the proposed injection site in the San Joaquin Valley is so close to the plant.

In March 2016, before the CEC had the chance to make its decision following the January deadline, HECA withdrew its application.

The project was originally announced in 2009, when construction was slated to begin in 2013 for completion in 2018. HECA had not provided recent cost estimates, but I assume the project developers were anxiously following Mississippi Power’s “clean coal” project at Kemper County, which saw costs spiral out of control during construction, from less than $3 billion to over $6.6 billion.

HECA’s partners were to have included Mitsubishi Heavy Industries and Fluor Enterprises. The ammonia and urea plants were to use technology from Casale, with nitric acid and UAN plants from Weatherly. [/memberful]

View larger map with all ammonia plants.

ADDRESS: Tupman, California, 93206, United States

WEBSITE: No longer available at http://hydrogenenergycalifornia.com/the-project
WEBSITE: http://www.scsenergyllc.com/

REGULATORY SOURCES:

• USGS: Minerals Yearbook, Nitrogen [RECENT / ARCHIVE]
• California Energy Commission: siting documents, Hydrogen Energy California Power Plant Project [LINK]
• US Department of Energy: Hydrogen Energy California Project [LINK] / National Energy Technology Laboratories: HECA Factsheet [PDF]
• Air permit: San Joaquin Vallen Air Pollution Control District, public notices [LINK]

NEWS SOURCES:

• 10/02/2015: Houston Chronicle: Low oil prices cloud futures of clean coal and carbon capture [LINK]
• 09/29/2015: Politico: Carbon-capture projects lose out on DOE stimulus cash [LINK]
• 09/05/2013: HECA Executive Summary [PDF]
• 07/08/2013 : San Joaquin Valley Air Pollution Control District: Notice of Final Action [PDF]
• 06/06/2013: US DOE: Audit Report on “The Hydrogen Energy California Project” [PDF]
• 10/29/2012: Fluor / Mitsubishi Heavy Industries presentation: Gasification Technologies Conference, Hydrogen Energy California Update [LINK]
• 05/03/2012: HECA press release: Hydrogen Energy Project Moves Forward [LINK]
• 09/28/2011: HECA press release: SCS Energy Closes Deal to Acquire HECA Project in Kern County [LINK]