The next time Alston & Bird partner William H. Hughes flips on a light switch in a hotel room in China, where he travels on business, the electricity illuminating his room may come from a clean-coal project he helped set in motion.
In a project that will implement the first commercial use of a technology that allows the production of low-emission coal-based electricity and carbon capture and sequestration, Hughes represented Chinese client Beijing Guoneng Yinghui Clean Energy Engineering Co. in its licensing and engineering services contract with U.S.-based KBR Inc.
The technology, called Transport Integrated Gasification, or TRIG, was developed by Southern Co., KBR Inc. and other partners, including the U.S. Department of Energy, at a DOE facility operated and managed by Southern Co. in Wilsonville, Ala.
The deal involves two power plants. One, a 120-megawatt plant that burns diesel, will be retrofitted to produce gasified coal and will have the capacity to serve 700,000 Chinese homes. The other plant, which will be built on an undeveloped site, will serve some 4 million Chinese homes with its 800 megawatt capacity. The new plant will use Integrated Gasification Combined Cycle, or IGCC, technology to take carbon-containing fuels such as coal or biomass and gasify them.
Once the gas exists, Hughes said, the technology will extract the CO2 from it. “You then can burn the gas to fire a gas-fired turbine and use the waste heat to fire a steam turbine,” Hughes said. “You get very, very efficient use of your fuel because you have these two different cycles of power generation and you can get down to virtually carbon-free emissions if you extract the CO2” and if other flue gases such as sulfur, mercury and nitrogen dioxide are removed.
The plants will be built in Dongguan, a city of 8 million in the Southern Chinese province of Guangdong, which is part of the Pearl River Delta, a well-known manufacturing district.
“It's just filled with factories, most of which have been built in the last 10 or 15 years,” Hughes said, explaining that those factories tend to have individual coal-fired boilers or on-site diesel generators.
“Air pollution really is a serious problem,” said Hughes, who worked on the deal with Atlanta partner David C. Keating and associate T. Timothy Wang, as well as lawyers and consultants from the firm's Washington office. “You go to a manufacturing center like Dongguan and I think the air is similar to what you had in Pittsburgh or Birmingham, Alabama, in the 1950s and '60s. There's just a pall that hangs over the place.”
The area not only needs to clean up its air, he said, it also has an inadequate power supply and needs to ramp up electricity production.
Because of those problems, Hughes said the Chinese government lent its support to the deal. Such support is consistent with a speech President Hu Jintao gave to the United Nations in September, in which he discussed China's commitment to cutting its carbon dioxide emissions per unit of gross domestic product by a “notable margin” by 2020, and its intent to “step up” the country's efforts to establish a green economy. Hughes also pointed out that one of the country's motivators is to develop technology it can export.
He said he flew to China in August to put the deal together, spending four days with 40 to 50 other people in a large meeting room at a hotel, participating in negotiations that took place in a mix of English and Chinese.
One of the major cultural aspects of getting the deal done, he said, was sharing mealtimes with the other participants. He recalled one typical South China country-style dinner at a restaurant in Dongguan where diners were seated at large tables with Lazy Susans in the center. The meal, he said, was delicious and involved lots of seafood and vegetables with the trademark “umami,” or Chinese protein-type flavoring reminiscent of mushrooms or a good steak, and “a whole roast chicken on a plate kind of looking you in the eye as it came around.”
Then, he said, he returned to the United States and, with in-house lawyers for KBR, put everything in writing before his Chinese clients flew over to sign the papers in one of Alston & Bird's conference rooms. The transaction is governed by U.S. law.
The deal, he said, went smoothly thanks in part to the support of the Chinese government. “When the central government decides to do something,” he said, “it typically gets done.”