(Source: Business Wire)The U.S. Department of Energy (DOE) has confirmed that NRG Energy, Inc.'s (NYSE: NRG) Somerset Station plasma gasification project has been selected to proceed into the detailed due diligence phase of the DOE Loan Guarantee Program. NRG is requesting a $158 million loan guarantee for this renewable technology project, which will use up to 35% eligible, or Massachusetts Department of Environmental Protection-approved, biomass and if permitted, up to 100% eligible biomass. The proposed 112-megawatt (MW) repowering project would provide enough electricity to support approximately 100,000 homes in southeast Massachusetts.

"NRG supports advanced, environmentally beneficial technologies and plasma gasification offers a practical way for smaller coal plants, like our Somerset facility, to meet”and in the case of Somerset, beat”the state's strict environmental standards," said Drew Murphy, President of NRG's Northeast Region. "Repowering Somerset Station with plasma gasification is a green and responsible project, and obtaining a DOE loan is an important step to help make it a reality."

Upon successful completion of detailed due diligence by the DOE and loan structure negotiations, the Somerset plasma project would receive a loan guarantee under the DOE Loan Guarantee Program. NRG also is seeking to bring in additional equity investors for the project.

"Not only would repowering Somerset Station bring considerable capital investment to the region," added Murphy, "but it would maintain the current plant workforce and produce about 250 new construction jobs during the 24-month construction period."

Environmental Benefits

To retrofit Somerset Station, the existing 108 MW power plant would be redesigned with new Westinghouse plasma gasification technology that will use solid biomass (such as green wood) and coal feedstock. This feedstock would be heated to a very high temperature, producing a clean synthesis gas which is then combusted in the plant's boiler. The process reduces sulfur dioxide emissions by over 95%, mercury emissions by over 95% and nitrogen oxide emissions by over 60%. Once built, this project would be the first large-scale use of plasma gasification for the production of electricity in the United States”a process developed by Westinghouse Plasma Corporation of Madison, PA (a wholly owned subsidiary of Alter NRG Corp. of Alberta, Canada) and demonstrated at commercial scale by Hitachi Metals in Utashinai, Japan.

Meeting Renewable Energy Standards

"Proposed federal renewable energy standards require that 20% of electricity be derived from renewable energy sources by 2020," added Murphy.