BP, GE to work together to develop hydrogen power plants

BP, GE to work together to develop hydrogen power plants

Washington (Platts)--18Jul2006

BP and GE Tuesday said they plan to jointly develop and deploy hydrogen
power projects that would sharply reduce carbon dioxide emissions from
electricity generation.

Vivienne Cox, BP's CEO of Gas, Power and Renewables, and David Calhoun,
vice chairman of GE and president and CEO of GE Infrastructure, signed the
agreement Tuesday in London, the two companies said.

While BP and GE said the world will continue to make extensive use of
fossil fuels, such as natural gas and coal, for power generation for the
"foreseeable future," they said current technology allows a cleaner form of
generation by creating hydrogen from fossil fuels while capturing and
sequestering the CO2 in deep geological formations. To help advance the
technology, BP and GE said they will collaborate on power, carbon capture and
sequestration technologies.

"The combination of our two companies' skills and resources in this area
is formidable, and is the latest example of our intent to make a real
difference in the face of the challenge of climate change," Cox said in a
statement.

"Tomorrow's energy mix will include hydrogen--and GE and BP are taking
the lead in ensuring progress begins today," Calhoun added. "This initiative
will demonstrate that our companies' leading-edge technologies can make
hydrogen production efficient, reliable, and economical for large-scale,
commercial power production. Our financial strength will ensure it happens now
globally, changing the way we envision our energy future."

BP has already announced plans for two such hydrogen power projects with
carbon capture and sequestration in Scotland and California, both of which
will use GE technology. Subject to appropriate regulatory and fiscal regimes
being in place, and necessary due diligence, the companies said they hope to
develop 10 to 15 projects over the next decade, including the plants
in Scotland and California.

The pair said they expect that the most appropriate structure may be a
joint venture to invest in hydrogen power projects and a joint development
agreement for development of related technology.

As a first step, BP and GE plan to jointly participate in the two
hydrogen power projects with carbon capture and sequestration at Peterhead in
Scotland, where a 475-MW plant is under development, and in Carson,
California, where a 500-MW plant is contemplated. Scottish and Southern Energy
is working with BP on the first project and Edison Mission Energy is a partner
in the second.

Both projects would convert natural gas or coal into hydrogen and carbon
dioxide. The hydrogen-rich gas is used to generate electricity from turbines
and the CO2 is captured, transported and stored permanently in geological
formations such as oil and gas fields.

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