HALLAM -- The Nebraska Public Power District will burn hydrogen instead of coal to power one of two steam boilers at Sheldon Station near Hallam through a new venture with a California-based company.
The project at the coal-fired plant south of Lincoln promises to create jobs, boost the economy and cut pollution, state and utility officials said Friday morning.
Monolith Materials Inc. plans to build a new plant next to Sheldon Station to produce carbon black, a fine, flour-like powder used in tires, plastic, inks and cellphones.
Monolith plans to use electricity to extract the carbon from natural gas. Byproducts of the process are hydrogen and water, and Monolith will sell the hydrogen produced to NPPD as fuel.
"Sheldon Station will become the first utility-scale coal plant (in the U.S.) to use hydrogen as a fuel," said NPPD President and CEO Pat Pope.
He noted that the station has seen many firsts, including being the state's first nuclear plant. It went online in 1962 but was shut down two years later after cracks were found. Some parts of the reactor are buried in a concrete tomb at the power plant, which later was converted to burn coal.
By replacing an existing coal-fired boiler with one that uses hydrogen fuel, officials estimate carbon dioxide emissions from Sheldon Station will be cut in half.
Scott Holmes, manager of the Lincoln-Lancaster County Health Department environmental health division, said that now, the plant is the largest source of industrial air pollution in the county.
Pope said NPPD will continue to burn coal in the other boiler, but pending federal air emission standards could change things.
The hydrogen boiler will be capable of generating 125 megawatts of electricity, the same as one coal-fired boiler does now.
Norris Public Power District, based in Beatrice and a wholesale customer of NPPD, will sell electricity to Monolith at an economic development rate as part of the venture. Eventually, Monolith will become Norris' largest customer.
"This is a great day for Nebraska and the environment," Gov. Pete Ricketts said at a Friday morning news conference. "What a wonderful project."
The venture could have a $400 million impact on the state's economy and create as many as 600 jobs, the governor said.
Bold Nebraska and Nebraska Sierra Club, two groups that support clean energy, had mixed reactions to the project but said they support efforts to further decrease the state's reliance on coal.
"Bold Nebraska is optimistic NPPD is beginning to take steps towards low-cost and low-carbon energy alternatives rather than depending on coal," Director Jane Kleeb said in a news release. "We urge NPPD to take leaps towards a clean energy future that protects our water, property rights and climate."
Ken Winston, policy advocate for the Nebraska Sierra Club, said the public should have had an opportunity to weigh in on the project.
“They are a public power district, not a private utility," he said in a statement. "The public should have had opportunities for engagement long before they made this announcement."
One of the major reasons Monolith chose to locate the plant in Nebraska is that the state has the 15th lowest electric rates in the nation and has a good mix of power generation facilities including nuclear, natural gas, coal and hydroelectricity, Ricketts said.
Rob Hanson, co-founder and chief commercial officer of Monolith, said his company began looking for a site about 18 months ago and searched in Texas, New York, Wyoming, Louisiana, Iowa and Alberta, Canada, before choosing Columbus-based NPPD and Sheldon Station.
"We found a group of people who shared our values, are hard-working and who we trust," Hanson said.
Officials say the facility will be the 17th such plant in the U.S. and the first to be built in decades. The U.S. produces about 25 percent of the world's supply of carbon black.
Monolith will immediately look to fill 10 engineering and managerial positions for its local operations. Once the plant is open, about 100 people will work there, with the rest of the new jobs involved in construction and other fields related to the project, Hanson said.
The state Department of Economic Development is giving Monolith a $150,000 grant to help with job training. Employees may be recruited from the University of Nebraska-Lincoln and Southeast Community College in Milford.
Pope said some of the 80 jobs at Sheldon Station now will be lost, but those will be handled through attrition and retirement.
Hanson did not have an estimate on the cost of the plant but said the investment is in the "hundreds of millions." Construction will begin next year, with full production set to begin in 2019.
A tornado devastated Hallam in 2004, and local officials hope the new venture will attract other businesses and promote growth in the area.
"I think it's fantastic," said Hallam Village Board Chairman Gary Vocasek, who works at Sheldon Station. "Probably some of the best news that Hallam has had in years."
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