AEP to fund first demo of emission reduction technology
15 Nov 2000
American Electric Power (AEP), one of the largest US energy providers, will finance the first commercial-scale demonstration of Thermal Energy's Thermalonox emission reduction system.
AEP will install Thermal Energy's Thermalonox system on one unit of its Conesville coal-fired generating station located in Conesville, OH. The installation is expected to demonstrate and validate the effectiveness of the technology during an 8-12 week test period.
The system will be designed to remove at least 75% of the existing nitrogen oxide (NOx) emissions from the 375MW unit. Completion of the system is anticipated during the first quarter of 2001.
The Thermalonox system itself involves the direct injection of elemental phosphorus into exhaust gas streams emitted from fossil-fueled combustion processes. The phosphorus reacts with the gases to convert nitrogen monoxide into nitrogen dioxide. The resulting nitrogen dioxide is then removed by a standard wet flue gas desulphurisation scrubber or other wet scrubber system.
AEP Pro Serv, a non-regulated subsidiary of AEP, will be the exclusive licensee for applications of Thermalonox technology in North America at coal-fired power generation installations equipped with wet flue gas desulphurisation (WFGD) scrubbers.
Thermal Energy and AEP estimate the value of the project at approximately $22.5 million CAD (US$15 million).
AEP has an option to acquire up to 10% of Thermal Energy. If exercised, AEP will initially acquire approximately 3 million shares of Thermal Energy common stock at $3.50 CAD (US$2.33) a share for an initial investment of approximately $10 million (US$7.02 million). AEP will also acquire warrants to purchase an additional approximate 3 million shares over 24 months at strike prices ranging from $3.50 to $10.00.
The total investment in Thermal Energy could reach $25.2 million (US$16.9 million) if AEP exercises all its warrants.
Thermal Energy and AEP will operate the system for up to 12 weeks during which all necessary test and evaluation data will be collected. The system will be designed for efficient conversion to a permanent installation.
More on the web at www.thermalenergy.com.
