HOUSTON (ICIS)--Dow is considering the possibility of installing an advanced nuclear reactor at one of two sites, which would sharply reduce the complex's carbon emissions, the CEO said on Wednesday.
"We are having talks with people in that space right now," said Jim Fitterling, CEO. He made his comments at the CERAWeek by S&P Global energy conference.
Nuclear power would be a longer term undertaking for Dow, perhaps within a decade, Fitterling said.
Dow has been discussing nuclear power for several months. Modular nuclear power plants could supply the power needed for electric cracking (e-cracking). Dow and Shell are researching such crackers.
Advanced nuclear power along with hydrogen and carbon capture and storage are critical parts of Dow's strategy cut its emissions, Fitterling said.
Dow already uses plenty of renewable energy, with 850 MW coming from wind and solar, Fitterling said. However, that accounts for just 15% of the company's power.
The challenge of wind and solar power is that they are intermittent sources of power. The nature of Dow's operations requires the company to have a reliable source of baseload power.
"I can't take a millisecond of a power trip in some of my assets," Fitterling said.
Once renewable energy makes up 40-45% of the power load of an electrical system, the grid starts to suffer from reliability problems, he said. "Businesses won't survive on that."
About 50% of Dow's energy is used for power and steam, Fitterling said. The other half provides process heat for the company's crackers.
CANADA CRACKER PROJECT
At
Dow's site in Fort Saskatchewan, Alberta
province in Canada, the
company is planning to build a 1.8m
tonne/year ethane cracker that will use
hydrogen for fuel.
Hydrogen combustion produces no carbon emissions.
The project will also incorporate carbon capture and storage.
Dow should complete the project in 2027, Fitterling said.
The company has plans to retrofit the existing cracker in Alberta so it could also burn hydrogen for fuel, he said.
The conversion project will require retrofitting because hydrogen is not a drop-in substitute for the natural gas that is typically burned in cracker furnaces, Fitterling said. Substituting hydrogen will require considerations about the choice of materials and convection in furnaces, he said.
Hydrogen will also raise the costs. Fitterling estimates that a hydrogen-burning cracker will require 15% more capital than a traditional plant.
Dow should be able to manage the higher costs with assistance and incentives from the government. Canada also has established a market-based price on carbon, so that will also help Dow recover the extra cost.
Operating costs are also more expensive. Fitterling estimates that hydrogen can cost three to four times more than natural gas.
Renewable - or green - hydrogen can cost 60 to 100 times more than natural gas, Fitterling said. Green hydrogen is made by splitting water molecules into hydrogen and oxygen in electrolysers.
Fitterling wants more proof that the process is viable.
Water electrolysis is similar to the production of chlorine and caustic soda from brines. Dow has more than a century's worth of experience with chlor-alkali production.
"We understand how much electricity has to go through a cell to make green hydrogen," he said.
Green hydrogen still deserves interest as a longer term solution, Fitterling said. "But if we want to transition to make an impact now, we have to develop infrastructure for hydrogen and carbon capture."
CARBON CUTTING PLAN
Dow
has a detailed plan to reduce its Scope 1 and
Scope 2 emissions to zero by 2050, Fitterling
said. The goal will require a significant
amount of money, but if Dow pursues its goal in
a disciplined way, the task should be
manageable, he said.
Scope 1 emissions occur from sources that are controlled or owned by a company. The gases could be emitted from burning fuel in boilers, furnaces or vehicles. Scope 2 emissions are indirect ones associated with electricity, steam, heat or cooling that are bought by a company.
Over the years, Dow has reduced its emissions by 15% through optimisation, technology and efficiency, Fitterling said. It plans to reduce emissions by another 15% by 2030.
CERAWeek by S&P Global runs through Friday.