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Pleasants Power Station sale complete as new ownership plans coal, hydrogen and graphite for plant's future

Jul 03, 2023

Environment and Energy Reporter

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Omnis Fuel Technologies has finalized buying the Pleasants Power Station and plans for the coal-fired plant to run on hydrogen produced by vaporizing coal at high heat.

The sale of the Pleasants Power Station is complete.

Richard Hulme, president and chief operating officer of Santa Barbara, California-based Omnis Fuel Technologies, said in a phone interview Wednesday an Omnis subsidiary closed on a deal to buy the coal-fired plant Tuesday.

Terms of Omnis’ deal with an affiliate of Houston-based Energy Transition and Environmental Management were not disclosed, but Hulme estimated his company would invest hundreds of millions of dollars into retrofitting the four-decade-plus-old Pleasants County power plant and building a new hydrogen facility on adjacent property.

“This is certainly gigantic,” Pleasants County Commissioner Jay Powell said in a phone interview Wednesday.

The Federal Energy Regulatory Commission approved the sale of the plant, which had been slated for closure, last week. Powell previously said the deal was contingent upon FERC approval and agreement with a FirstEnergy subsidiary regarding an adjacent piece of property.

But Hulme said the sale was finalized without the latter condition in place as Omnis continues talks with FirstEnergy subsidiary Mon Power and Solvay, a global chemical company, to acquire property adjacent to the power plant on Willow Island. The property would be required to accommodate Omnis’ plan to construct a hydrogen production facility, according to Hulme.

FirstEnergy spokeswoman Hannah Catlett declined to comment, calling company discussions confidential.

“While Solvay continually explores options, we do not comment on market rumors or speculations,” Solvay spokesperson Kim Bratanata said.

Omnis intends to have the Pleasants plant run coal-fired for the next 12 to 24 months, starting this month, while it’s retrofitted and a hydrogen production facility is constructed, Hulme said.

The Pleasants plant, which began operating in 1979, has been inactive in recent months as sale negotiations ramped up.

Omnis intends to double the amount of coal that traditionally has been consumed at Pleasants as a hydrogen-run plant, Hulme said. Under Quantum Pleasants, technology would convert coal to hydrogen through an ultra-high-heat process that doesn’t burn the coal.

Instead, hydrogen produced by vaporizing coal particles at high heat — around 3,000 degrees Celsius — will be piped into the power plant, with electricity generated from burning the hydrogen, according to Hulme.

Hulme estimates roughly 60% of the coal mass would come out as graphite, yielding 3 million-3.5 million tons of graphite per year.

“We’re going to be producing a lot of graphite out of this plant,” Hulme said.

Hulme projected a roughly 95% reduction in greenhouse gases at the site, with water vapor resulting from the use of hydrogen as burner and boiler fuel.

Omnis plans for the site to use gas to fuel ultra-high-heat reformers that convert coal to hydrogen, Hulme said. But Hulme added Omnis is researching and developing a transition from gas to oxygen at the planned hydrogen production facility.

Hulme noted that graphite is a key material in battery production — and that it’s in short supply amid the rapid growth of the electric vehicle industry.

Kearney, a global management consulting firm, predicted in May electric vehicle demand will absorb all graphite output by 2030.

A 2021 International Monetary Fund report found graphite to be the metal with the greatest potential shortage in a net-zero emissions scenario among 15 metals modeled.

“So that’s one of the primary markets for the graphite that we will be producing at this plant, is the battery market,” Hulme said.

Sean O’Leary, senior researcher at the Ohio River Valley Institute, a Pennsylvania-based pro-renewable energy nonprofit think tank, said it’s misguided to think of the plant’s sale as a power generation play.

“[I]n fact it has to be about the graphite and the margins it is expected to earn,” O’Leary said in an email.

O’Leary predicted the site could produce graphite cost-competitively and with a profit, but not hydrogen or hydrogen-generated electricity, which he anticipates would be sold at a loss to offset or recover as much of the manufacturing cost as possible. O’Leary cited hydrogen’s high energy cost.

“H2 doesn’t have much of a future in the power generating sector ... that is unless, like Omnis, you’re simply stuck with [a lot] of the stuff and need to make the most that you can out of it,” O’Leary said.

But O’Leary called Omnis’ planned annual graphite output of 3 million to 3.5 million tons “one hell of a stretch,” citing a Canadian government estimate that global consumption of graphite only reached 3.5 million tons in 2021.

“Not plausible,” O’Leary said, adding that he has “significant questions” about Omnis’ planned project scope and business model.

The federal government has sought to scale up the production of hydrogen. Last year, Mitsubishi Power Americas and energy storage provider Magnum Development announced the closing of a $504.4 million loan guarantee from the U.S. Department of Energy to develop a facility in Utah that runs on renewable energy-powered hydrogen by 2045.

Powell called Omnis’ plan to retrofit the Pleasants plant to run on hydrogen a “game-changer for the energy market.”

“You’re talking about something incredible,” Powell said.

The Inflation Reduction Act passed by a Democratic-controlled Congress without Republican support last August includes investment and production tax credits for hydrogen.

Hulme said the Pleasants plant’s new ownership is eyeing tax credit subsidies for the production and use of hydrogen and graphite.

Hulme said Omnis has partnered with Zeeco, an Oklahoma-based combustion technology company, to convert the Pleasants plant into a hydrogen-run facility.

Zeeco supplies what it calls ultra-low-emission hydrogen-fired burners and related technologies used to decarbonize utility and industrial plants.

Carter Clancy, marketing manager for Zeeco, said Zeeco experts visited the Pleasants Power Station to confirm the viability of converting it to hydrogen use. The company plans to keep supporting a retrofit that shifts the plant to hydrogen operation, Carter said.

Hulme predicted the process planned for the plant will allow it to deliver power at a reduced cost to ratepayers relative to other hydrogen-based power systems.

Powell noted the plant’s transfer from Energy Transition and Environmental Management to Omnis control takes FirstEnergy ratepayers off the hook.

Mon Power and fellow FirstEnergy subsidiary Potomac Edison had asked the West Virginia Public Service Commission for a rate increase of at least $3 million per month for 12 months starting June 1 to maintain the plant while they decided whether to acquire it. The plan would have resulted in a 2.2% increase in total average monthly rates for residential and commercial customers, who would pay $2.67 and $8.44 more, respectively.

The PSC withheld approval of the requested rate hike in April while negotiations to determine the plant’s future continued.

In December, the commission ordered Mon Power and Potomac Edison to evaluate buying the Pleasants Power Station, which then-owner Energy Harbor LLC announced in March 2022 was to be closed or sold in 2023. Energy Harbor, an independent power producer, said the move was required as it transitioned to carbon-free energy.

In 2019, the Legislature approved an estimated $12.5 million in annual tax breaks for the struggling Pleasants plant, a “merchant plant” that doesn’t sell electricity to retail customers.

The Pleasants site will be Omnis’ first electric production location.

Hulme said the Pleasants plant was “perfectly situated” for Omnis because it was scheduled to be decommissioned.

“[T]he timing was perfect for us,” Hulme said.

Hulme credited support from state and local leaders. He singled out Senate Bill 609, a measure signed into law by Gov. Jim Justice in March designed to stave off closures of fossil fuel-fired plants by requiring state Public Energy Authority approval before such plants can be decommissioned or deconstructed.

Hulme said Energy Transition and Environmental Management was planning to tear down the plant before SB 609. Mon Power and Potomac Edison said in a PSC filing the law made ETEM reevaluate a plan to demolish the plant and the remediate the site.

“[S]o instead of tearing down the plant, they decided to sell the plant and we became aware of it right then,” Hulme said.

ETEM did not respond to a request for comment.

Hulme said the Pleasants plant is in “good condition,” minimizing the amount of required plant investment.

The Pleasants plant sale grows Omnis’ footprint in West Virginia.

In November, Justice announced Omnis Sublimination Recovery Technologies, an Omnis Fuel Technologies affiliate, would invest $60 million in a new site in Wyoming County to extract rare earth metals used for making electronic devices from coal waste impoundments. Hulme declined to give an update on the site, noting he has been focused solely on the Pleasants plant acquisition.

Last year, another company under the Omnis umbrella, Omnis Building Technologies, broke ground in Mercer County on a $40 million, 150,000-square-foot manufacturing facility that will produce housing materials for residential construction.

Omnis Global Technologies LLC, Omnis Fuel’s parent company, and affiliates said in a Federal Energy Regulatory Commission filing they specialize in developing, licensing and commercializing technologies focused on sustainable energy, affordable housing, organic farming and biodegradable plastics.

“Omnis deserves a lot of credit,” Powell said. “The state of West Virginia deserves a lot of credit. But let’s give the good Lord credit above for allowing something like this to happen so quickly and in miraculous fashion.”

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Mike Tony covers energy and the environment. He can be reached at 304-348-1236 or mtony@hdmediallc

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Environment and Energy Reporter

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