Rio Tinto and BP joint venture Hydrogen Energy has commenced feasibility studies on plans for a $2 billion coal-fired power station in Kwinana, fully integrated with carbon capture and storage technology, to reduce its emissions by almost 90 per cent.
Rio Tinto and BP joint venture Hydrogen Energy has commenced feasibility studies on plans for a $2 billion coal-fired power station in Kwinana, fully integrated with carbon capture and storage technology, to reduce its emissions by almost 90 per cent.
The project will be the first in Australia for the company, which was launched last week, for the purpose of developing hydrogen power stations both in Australia and overseas.
Located alongside BP's Kwinana refinery and Rio Tinto's HISmelt facility, the new 500 MW plant will provide enough power for 600,000 new homes, and will capture almost 4 million tonnes of carbon dioxide, the equivalent of taking 750,000 cars off the road, per year.
The carbon will be transported offshore via pipeline and stored in a geological formation two kilometres beneath the seabed of the Perth basin.
Hydrogen Energy chief executive Lewis Gillies said the new plant would signal the country's commitment to combating climate change, giving Australia a place on the international climate change platform that was unparalleled.
"We are the largest exporter of coal in the world. In a carbon constrained world of the future, the development of these technologies secures this value option for Australia," Mr Gillies said.
Mr Gillies said that because the cost of hydrogen-fuelled generation was higher than for traditional power generation, the project would require policy support from government for it to be competitive in the electricity market.
Subject to approvals and successful feasibility study outcomes, investment for the project is expected to be finalised by 2011, with the plant coming online after a three-year construction period.
For the record, state Energy Minister Francis Logan has thrown his support behind the plans.
"The Carpenter Government has agreed to grant an option on the preferred location for the project's onshore development site, adjacent to BP's Kwinana Refinery and Rio Tinto's HIsmelt plant," he said.
Rio Tinto's shares closed up $1.38 to $92.29.
A supporting announcement from Energy Minister Francis Logan is pasted below
Energy Minister Francis Logan has welcomed today's announcement of plans to develop a $2billion clean-coal power station south of Perth.
Hydrogen Energy, a new company jointly owned by BP and Rio Tinto, today announced it would begin preliminary work on a coal-fired power station that could generate 500 megawatts of electricity - enough to power 500,000 homes.
But by using clean-coal technology, four million tonnes of carbon dioxide will be captured and stored underground each year, instead of being emitted into the atmosphere.
Subject to engineering and commercial studies, a final investment decision to develop the project is planned to be made in 2011. It would then take three years to build.
Mr Logan said the project had the potential to provide base-load electricity, but with very low greenhouse gas emissions.
"I understand this is the first time a project of this size and type has been considered anywhere in the world and, as such, will be unique to WA," he said.
"The Carpenter Government has agreed to grant an option on the preferred location for the project's onshore development site, adjacent to BP's Kwinana Refinery and Rio Tinto's HIsmelt plant."
The project involves the gasification of Collie coal to produce hydrogen and carbon dioxide. The hydrogen is used to fuel the power station, while 90 per cent of the carbon dioxide is captured and stored permanently in a deep underground geological formation in the offshore Perth Basin.
Mr Logan said the project would benefit from an emissions trading scheme, which is supported by the WA Government, because it would provide the project with a sustained, additional revenue stream due to its low emissions profile.
"This project has the potential to provide substantial benefits to WA and to the nation," he said.
"While the technology to be used is still being developed, there are obvious benefits to the Australian coal industry, to Australian energy security and to the national electricity industry.
"In addition, the global deployment of clean coal technologies such as this has the potential to secure a long-term future for the export of coal."
