Judgment day is fast approaching for Neumann Systems Group and its technology, which purports to clean sulfur dioxide emissions in coal-fired power plants.
Next month, Colorado Springs Utilities will make a final recommendation — a “go or no go” — on whether to move forward with the technology, said Drew Rankin, general manager of energy supply.
And by December, independent auditor Electric Power Research Institute will issue its determination on whether the NeuStream scrubber works as billed.
After nearly three years of testing, Rankin says he sees no reason for a “no go.”
“We’re putting it through the paces now,” he said, “really trying to test it to failure levels. And it’s done very well.”
The system, he said, is capturing 90 percent of sulfur dioxide emissions — or SOX, as it’s known in the energy business — from the Drake Power Plant in downtown Colorado Springs.
That level of “sequestration” can go as high as 97 percent, he said. State law requires power plans to cut their SOX emissions by 70 to 80 percent by 2017, to meet anticipated federal clean-air regulations.
David Neumann owns Neumann Systems, which mostly develops laser technologies for the Department of Defense. He started researching additional use for one of his applications, and the Neumann scrubber was developed.
Neumann approached CSU about a public-private partnership in 2008, and the utility company bought into the project. To date, CSU has spent $17 million testing and developing the equipment.
“To put that in perspective, we spent $600 million on (maintenance of) our power plants in the same time period,” Rankin said.
If the gamble pays off, it could prolong the life of the Drake and Nixon plants by 20 years — and the Neumann system’s smaller size means room left over for other technologies that can scrub nitrogen dioxide and carbon dioxide from coal-fired plants.
The partnership has the potential to make CSU some extra money. Because the utility bought in early, it will collect a fee on any sales to other utilities. Rankin said that could amount to as much as $40 million over five years.
But it’s all still a big “if,” because no one is ready to declare the technology a success. David Neumann declined to comment for this story, citing the various hurdles ahead.
George Offen, the senior project manager at the Electric Power Research Institute, which works with the Department of Energy, also declined to discuss the tests his organization ran on the NeuStream. ERPI was asked to review the project by four different utility companies.
“We’ve had more than half-a-dozen express interest in what we’re doing here,” Rankin said. “Neumann’s also had a great deal of interest from venture capitalists.”
Offen said the technology has the potential to take off.
“This sort of collaboration is something different,” he said of the public-private partnership between CSU and Neumann. “It’s the first one we’ve looked at. If our testing proves it works, then it will mean a great deal in cost savings for utility companies and other government agencies.”
The NeuStream is both smaller and cheaper than traditional “dry-scrubbing” techniques, Offen said.
A lot is riding on the ERPI report. Though the agency doesn’t endorse products, its reports are important in determining the promise of what it tests.
Rankin said ERPI’s report could mean the difference between success and failure for Neumann Systems. If successful, as many as 500 jobs could be created at the company.
The project started with a small scrubber, and was tested for SOX, nitrogen oxide and carbon dioxide. Then, the company went bigger, installing a 20-megawatt device at Drake. That also proved successful at cleaning all three — but only cleaned about 60 percent of the carbon dioxide. That means a different “sorbent,” or liquid that absorbs the gases, must be used for carbon dioxide
When Neumann went even larger — a 200-megawatt scrubber is now being tested — CSU and Neumann decided to focus solely on SOX emissions. CSU is expecting federal regulations regarding SOX to come later this year or in early 2011.
“Those regulations are imminent,” Rankin said. “So we decided to focus on that. If we give the project a go, then we will go back and see about cleaning the other gases.”
Without the Neumann technology, CSU estimates it will pay about $360 million to control SOX, NOX and other particulates. NeuStream promises to cut that cost in half.
Other utility companies have devised their own methods of meeting upcoming federal air regulations. Xcel Energy, a multi-state utility that operates in Denver, plans to reduce emissions through a combination of retiring, re-powering or retrofitting power plants.
The Xcel plan has three key components: retires 900 megawatts of coal generation at two plants, re-power a plant with natural gas, and retrofit two plants with modern emission-control technology.
Its plan is waiting approval from the Colorado Public Utilities Commission. Xcel estimates its approach would cost $1.3 billion over the next 12 years.
Under the Neustream plan, CSU estimates its cost will amount to about $180 million.
Rankin says environmentalists who say it’s time to retire coal as a source of energy are “short-sighted.”
“Coal is affordable, and if we can clean the air, and clean it cheaply — that’s what makes sense,” he said. “CSU is committed to alternative energy, to clean energy. But we also are committed to affordable prices — this system provides both.”