Kwinana Power Station with Carbon Capture and Storage

The week after Hydrogen Energy was launched in mid-may 2007, the joint venture partners announced that it was "beginning feasibility studies and work on plans for the potential development of a A$2 billion (US$1.5 billion) coal-fired power generation project at Kwinana in Western Australia that would be fully integrated with carbon capture and storage to reduce its emissions of greenhouse gases." It also noted that the company was also investigating two other CCS projects -- one at Peterhead in Scotland and another at Carson in California, USA.

The company proposed to construct a gasification plant and a 500 megawatt power station adjacent to BP's Kwinana oil refinery and Rio Tinto's HIsmelt iron smelter. The project’s gasification facility and power station would be located in Kwinana, 45km south of Perth, alongside BP's refinery and Rio Tinto's facility. The hydrogen would be burnt in the power station, which would be capable of producing 500 megawatts of electricity, while the carbon dioxide pumped underground to be "permanently and securely stored in a geological formation deep beneath the seabed of the Perth basin."

"This would be the first hydrogen-fuelled power project to store CO2 in a saline formation, a type of geological structure which is more common globally than suitable oil and gas reservoirs," the joint venturers stated. From the outset the company was lobbying for government support and a favourable regulatory environment. "For the project to be economic and able to compete effectively in the electricity market, it would require appropriate policy support and a regulatory environment which recognises and encourages the low-carbon benefits it can deliver," the company stated.

The company foreshadowed that "a final investment decision to develop the project could be made in 2011, with the project coming into operation after a three year construction period."

However, the decision came much sooner than that. Less than a year after the company's upbeat launch, the Financial Times reported that the project had been quietly shelved as a result of the lack of suitable geological formations. "We wanted to be absolutely certain we had the right geology before we went ahead, because this would be the first project and would be a proof of concept," BP said.

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