Monday, August 15, 2011

$7.2 million grant to pollution control firm

Posted By on Mon, Aug 15, 2011 at 4:26 PM

Emissions like these are the target of Neumanns technology.
  • Emissions like these are the target of Neumann's technology.

Colorado Springs-based Neumann Systems Group has been awarded a $7.2 million Department of Energy grant to further study carbon-capture technology.

It's one of four recipients given grant money to advance their research into reducing the energy and cost penalties of pollution control equipment.

The money comes with the requirement that technologies achieve 90 percent carbon dioxide removal or better, but add no more than 35 percent to the cost of power.

OK, folks. This is a huge deal, because Colorado Springs Utilities has a stake in Neumann Systems, which is run by Dave Neumann, a former Air Force Academy professor.

Utilities has partnered with Neumann since 2008 by allowing him to attach and test his apparatus at Martin Drake Power Plant for removal of sulfer dioxide in small increments, such as one megawatt, 10 megawatts and, most recently, 20 megawatts. Neumann believes the mechanism also will work on carbon dioxide, the biggest pollutant problem of coal-fired power plants.

"It seems like further validation that this is good technology that the federal government wants to support to move us toward better emissions control," says Bruce McCormick, Utilities' chief energy officer.

Bruce McCormick
  • Bruce McCormick

And Utilities stands to make a pretty sizable payback for being the guinea pig and by investing $22 million in the Neumann Systems testing and development phases.

McCormick says Utilities is in the process of drafting a new contract with Neumann, which will dictate not only how much the city pays for the sulfur dioxide scrubbers, but also how much the city receives for systems sold to others.

The old contract called for the city to receive the emission control system at cost plus 15 percent, along with priority placement for any of its future orders for purchase of the system. The contract also contained a provision that gave Utilities 2 percent of the total sales price of each unit sold during the initial two years after the units became commercially available, and 1 percent for three years after that.

Those provisions are now being reworked, and McCormick isn't discussing the details. Asked if the city was looking for a better price of initial purchase to fully equip Drake, he said, "You betcha. That's why we've partnered in the research to develop the technology."

But McCormick stopped short of calling the city's share a windfall. "I do think the technology has been accepted, and there will be some benefits in the returns to customers as more sales are made. Again, that's part of the negotiations that are going on."

As Utilities has previously said:

NSG’s emissions control equipment requires just one-tenth the space as conventional technologies. Compact design is critical for small-campus power plants like the Martin Drake facility.

Springs Utilities expects to be required to install emissions control equipment by 2015. Using conventional technology, removing sulfur dioxide (SOx) is estimated to cost $350 million. Based on current tests and economics, NSG’s PureStream device may help our community comply with State regulations at 50 to 60 percent of the cost of conventional scrubbers.

Another advantage of the Neumann installation is that it doesn't have a parasitic effect on power plants' output like other technologies, McCormick says. "That's one of the advantages of this technology. Essentially, no, it doesn't limit the capability of the plant."

McCormick says the city plans to have Drake fitted with the Neumann technology by the end of 2013. The Ray Nixon Power Plant, south of the city, will follow.

"We are 100 percent go on full-scale units, and that's what this contract is about," he says. "We would anticipate that Nixon would likely have similar technology added in later years."

Others receiving Energy Department grants: Linde LLC of Murray Hill, N.J., $15 million; Southern Co. of Atlanta, Ga., $15 million, and University of Kentucky Research Foundation of Lexington, Ky., $14.5 million.

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