Recycled Energy Development
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CHARLESTON, W.Va.—A project to turn the Alloy Plant’s waste heat into electricity has grown from $50 million to more than $100 million but hinges on the ability to obtain federal financing.
In February 2008, Gov. Joe Manchin joined executives of Recycled Energy Development and the Alloy Plant to announce plans to recycle the factory’s hot exhaust to generate 40 to 44 megawatts of electricity.
The plant is on the Kanawha River in Fayette County, 31 miles southeast of Charleston. It has six electric arc furnaces. Five of the furnaces are in use. The furnaces use electricity to heat quartz sand to produce up to 75,000 metric tons of pure silica a year.
The silica is used in thousands of products, from silicone sealants to photovoltaic solar cells and computer chips.
The sand is melted at a temperature of 3,000 degrees. Currently the hot air from the pots is run through air-cooled hairpin coolers to dissipate the heat. The coolers look like giant outdoor radiators. The air is 200 degrees by the time it is released into the atmosphere.
Recycled Energy Development, also known as RED, wants to capture the heat, use boilers to convert the heat into steam, and use the steam to drive a turbine to produce electricity.
The recycled energy project will burn no fossil fuel, will emit no pollutants and will eliminate more than 300,000 metric tons of annual greenhouse gas emissions.
Thomas Casten, chairman of RED, said, “Our initial approach wasn’t about changing the process. We were simply going to trap as much air as we could and make 40 to 44 megawatts of power. What’s happened now is a fundamental decision has been made to refurbish the five furnaces, which were constructed in 1933.
“It’s astonishing that something built 77 years ago is still competitive,” Casten said. “They’ve done some things to the furnaces over the years but this is the big one. Moving those furnaces to state-of-the-art will cut their electricity use per ton of silicon produced. They’ll use the same amount of electricity but will produce more silicon.”
The re-design will allow the heat-recycling project to generate 60 to 62 megawatts of electricity – a 50 percent increase over the original plan.
The plant uses 120 megawatts of electricity 24 hours a day, seven days a week. It’s the equivalent of a town with a population of 60,000.
Alloy gets most of its electricity from the Hawks Nest hydro power plant but uses more power than the hydro plant can produce, Casten said. Alloy supplements the hydro power by purchasing electricity from Appalachian Power. Casten said that up until last year, Alloy supplemented the hydropower with electricity produced on site by two coal-fired turbines.
One consequence of increasing the plant’s efficiency is the decision to remove one of the old turbines and install a state-of-the-art 65-megawatt turbine in its place, Casten said. The other turbine will be retained as a backup.
The decision to install a new turbine is good news in that it makes the project even more environmentally friendly, Casten said. However, all of the changes mean the project costs more.
“I think I’m not at liberty to talk about the cost of the furnace work,” Casten said. “Suffice it to say, it’s a major investment. We’ll run over $100 million to do our end of it.
“There’s good news and bad news on the government front,” Casten said.
A federal tax credit is available for the first 15 megawatts of power generated by a recycling project like Alloy’s, but only projects of 50 megawatts or less are eligible. The Alloy project became ineligible when it grew to 60 to 62 megawatts.
“This is a case where no good deed goes unpunished,” Casten said.
The good news is Congress is considering energy bills that would provide tax credits for this kind of project without regard to size. “Some 90 organizations have signed a letter urging Congress to approve this,” Casten said. “We’ll see what happens.”
The nation’s economy was booming when the project was first announced. “That was obviously a different world than we live in today,” Casten said. “In the current climate and with the fact the project size has grown so much and the difficulty of getting commercial loans, I don’t quite see how we can get the project built without loans from the Department of Energy.”
Casten said the department has two loan programs for projects like Alloy’s and “we’ve cleared two hurdles to be eligible for a loan on the entire project.” A credit committee must now approved RED’s application.
“We’re hopeful,” he said. “There’s not any level of government at any place in West Virginia or Washington that’s not hugely supportive of this project and these kinds of projects.
“We’re going to need to get that loan in some form or we’ll have to wait until loans are again available in the commercial market. We could have built this project easily in 2007, but you could borrow money in 2007. “
Casten hopes to finish the engineering work for the project this year, begin ordering equipment next year, get the first two furnaces online in late 2012, and finish everything in late 2013.
“It’s a phased project so they can keep making silicon in at least three of the five furnaces the whole time during construction,” he said.
The Alloy Plant has about 200 employees.
“The key to me in this whole thing is, this place has a very senior staff,” Casten said. “The average employee tenure is 27 years. These are guys who really know what they’re doing. The whole project has long excited me because it takes advantage of that experience, it gives them a state-of-the-art tool to work with instead of a tool that’s near the end of its technological life.
“We’re just trying to get this plant ready for the next 70 years.”
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