BP and GE to Develop Hydrogen Power Plants and Technologies

GreenBiz

LONDON, July 20, 2006 - BP and GE have announced their intention to jointly develop and deploy hydrogen power projects that dramatically reduce emissions of the greenhouse gas carbon dioxide from electricity generation.

The world will continue to make extensive use of fossil fuels, such as natural gas and coal, for power generation for the foreseeable future, but technology now allows this to be done more cleanly by creating hydrogen from fossil fuels while capturing and sequestering the carbon as carbon dioxide in deep geological formations. To facilitate this advancement, BP and GE will collaborate on power, carbon capture and sequestration technologies.

"The combination of our two companies' skills and resources in this area is formidable, and is the latest example of our intent to make a real difference in the face of the challenge of climate change," said BP's Vivienne Cox. "BP and GE's strategic approaches to developing increasingly cleaner, lower carbon power options are closely aligned and our skills and strengths are highly complementary."

"Tomorrow's energy mix will include hydrogen - and GE and BP are taking the lead in ensuring progress begins today," said David Calhoun of GE. "This initiative will demonstrate that our companies' leading-edge technologies can make hydrogen production efficient, reliable, and economical for large-scale, commercial power production. Our financial strength will ensure it happens now globally, changing the way we envision our energy future."

BP has already announced plans for two such hydrogen power projects with carbon capture and sequestration in Scotland and California, both of which will use GE technology. Subject to appropriate regulatory and fiscal regimes being in place, and necessary due diligence, the companies have an ambition to progress 10 to 15 further projects over the next decade, including the plants in Scotland and California. Subject to further exploration, the current expectation is that the most appropriate structure may be through creation of a joint venture to invest in hydrogen power projects and a joint development agreement for development of related technology. As a first step, BP and GE would jointly participate in the two hydrogen power projects with carbon capture and sequestration BP has announced - at Peterhead in Scotland and at Carson in Southern California where Scottish and Southern Energy and Edison Mission Energy are partners respectively.

Such low carbon power projects use fossil fuels such as natural gas, petroleum coke or coal for power generation combined with carbon dioxide capture and storage technology. They generate significant quantities of base-load power while capturing and storing some 90% of the carbon dioxide that would otherwise be emitted, in deep geological formations.

BP and GE will apply some of the world's leading technologies, project experience and assets to optimise the integrated design. The collaborative effort will draw upon the companies' technologies and experience in areas such as coal gasification, reforming technology, gas turbines and carbon capture and storage.

"The combination of coal gasification and carbon capture and sequestration is crucial for clean coal development and presents great opportunities for countries with substantial reserves of coal such as the USA, China and India," says Lewis Gillies, BP's Director of Hydrogen Power.

"GE and BP are combining our resources to develop economically attractive, breakthrough technologies in the area of hydrogen to power. This will allow power producers to use abundant, low-cost fossil fuel resources to generate electricity with very low carbon dioxide emissions," said Edward Lowe, general manager of GE Energy's gasification business.

In addition to the complementary nature of the technologies and experience of the two companies, the collaboration is expected to be further strengthened by the global reach of each of the partners. GE's operations in Houston and BP's operations in London will form the core groups for the hydrogen power collaboration.