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Increasing Coal Plant Revenues in a Shrinking Demand Era

Achieving successful turnaround through applying the Carnegie-Ford Template

By W. James O’Brien, W. James O’Brien Associates Industrial Cost Analysis Services
© American Coal Online
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What does co-location mean?

When one speaks of industrial co-location, concentrating factories and powerhouses in one place, the erroneous vision comes to mind that a Carnegie-Ford Template industrial complex has to be a frightening landscape of dehumanizing machinery. Nothing could be further from the truth.

I offer two, people-friendly examples of Carnegie-Ford co-location for your inspection now. First, the Rich family of companies in the Reading, Pa. region, has blossomed through this courageous coal mine-owning family’s initiative. (See: www.readinganthracite.com/rich-family-companies/) Second, please review the new development being undertaken by Sasol of South Africa, the ChemCity industrial incubator park of Sasolburg, 90 km from Johannesburg. This development exists because Sasol, a pioneering company in coal-to-liquids technology, is taking the lead to its own free-market supply chain of service providers. Those local producers are also users of Sasol’s broad inventory of industrial chemicals and expertise.

What is co-production?

In one sentence, co-production means using everything the power plant produces to advance both the product users’ fortunes and the power plant’s profitability as well as providing products local enterprise can use for their business growth schemes.

Examples include, but are not limited to, the following:

  1. Retrofitting coal power plants with ammonium sulfate and/or gypsum production capabilities with a wet FGD array as offered by Marsulex Environmental Technologies. The resulting product is then distributed to a local fertilizer broker and a local sheetrock manufacturer. (See: www.met.net)
  2. Contracting to an agribusiness multinational to set up large acreages of greenhouses for the cultivation of vegetables, fruits and flowers. The facility would use carbon dioxide emissions to promote accelerated growth and health of the crops. These greenhouses serve as large electrical and steam customers when conjoined with 24-hour crop “grow-lighting” fans and other air movers for climate control, electrical conveyors for harvesting, pumps for “fertigation,” a canning plant onsite and refrigerated warehousing onsite for non-canned crop inventory storage and distribution.[2] This is a “very short putt” for Cargill (www.cargill.com).
  3. Providing steam and electricity to an adjacent polymer textile firm, which produces civil engineering geotextiles for flood control, soil reclamation, watershed drainage optimization and water barriers for new construction. Carbon emissions plus ammonia create urea or polymers in the production of these geotextiles and of polyesters (see: http://bit.ly/UbjXOB).
  4. Inducing a manufacturer of carbon dioxide-based ultra low temperature refrigeration equipment for meat and poultry storage to co-locate near the coal plant.
  5. Following in part the paradigm of the Rich family business in establishing a secondary revenue stream based on the production of hydrocarbon fuels from coal (coal-to-liquids or CTL) for the coal plant (see: www.ultracleanfuels.com). As part of this subsidiary operation, a portion of the syngas generated would serve as fuel for over-fire burners for the plant or as a product for distribution to the other elements local natural gas-using community.
  6. Manufacturing cinder block, Portland cement and concrete on the industrial park site using byproducts of the coal power plant’s combustion process.
  7. Syngas co-production to fuel expanded power generation on-site using combined cycle gas turbine generator sets.
  8. Syngas storage as a cornerstone to enable coal plant-based electric utilities to enter the natural gas distribution industry on a local basis.

The coal plant utility in advocating these activities to take place on its now-rented industrial real estate would maintain open options whether or not to directly invest or take management positions in such enterprises. This is what both Carnegie and Ford did and Ford still does now. The point is not to let subsidiary activities dominate the conduct of the core business, which in this case is the generation of electric and steam power cost-effectively from coal.
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