Shaw and Exelon join NET Power to develop gas-fired power technology

The Shaw Group Inc. (NYSE: SHAW) on June 6 said it is teaming up with NET Power LLC and Exelon (NYSE: EXC) to develop a new technology for gas-fired power generation. Shaw said the technology could result in benefits for electricity producers and consumers, energy security and the environment.

The new technology, called NET Power, is based on a high-pressure, supercritical carbon dioxide oxyfuel power cycle. Unlike other power generation technologies that release emissions to the atmosphere or employ expensive, add-on carbon capture systems, Shaw said the primary byproduct of NET Power is pipeline quality, high-pressure carbon dioxide.

The carbon dioxide can be used for enhanced oil recovery,  while sequestering carbon dioxide below ground.

Shaw will acquire a substantial ownership position in NET Power LLC, the developer of the technology, and will have exclusive worldwide rights to engineer, procure and construct NET Power plants. Exelon will provide and obtain permitting for a small-scale testing site, test and commission the facility, market its output, supply fuel and provide other operations and maintenance support. Exelon will have options for the first full-scale commercial plants when development is complete. The team is working with a global manufacturer to design, develop and manufacture a turbine for this new technology.

The initial application of NET Power will be based on a natural gas-fueled turbine. Future variants of NET Power are expected to be capable of using coal as the fuel source with existing, commercially available gasifiers. The coal application is expected to yield similarly excellent environmental and cost benefits.

Shaw will invest up to $50.4 million in cash and in-kind services and will acquire up to 50 percent of NET Power LLC. Phases 1 and 2 involving front end engineering and combustor rig testing are expected to be completed in 2012. Phase 3, expected to be completed in mid-2014, involves the construction and commissioning of a 25 MW small-scale natural gas plant that will capture all emissions and will generate revenue from the sale of electricity and carbon dioxide for enhanced oil recovery.

Development of the first full-scale commercial natural gas plant is expected to begin in late 2014 or early 2015.

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