DESIGN, CONSTRUCTION, AND OPERATION OF A PIONEER PLANT(S) BASED ON DIRECT AND/OR INDIRECT CONVERSION TECHNOLOGIES The Department of Energy (DOE)/Federal Energy Technology Center (FETC) is interested in aiding the formation of non-Federal project teams that would eventually construct and operate a pioneer plant(s) (defined later) based on direct and/or indirect conversion technologies. The DOE/FETC also recognizes that supporting work including the substantiation of the design data base with more proof-of-concept (POC)-scale operation and the conduct of a conceptual feasibility study may constitute a part of the pioneer plant activity. This notice is for advanced notification of the Government's potential intent for further procurement activities and is seeking a broad-based response from stakeholders and developers. This is NOT a formal solicitation, is NOT a request for proposals, and is NOT to be construed as a commitment by the Government. Specifically, DOE/FETC is seeking expressions of interest, in particular the responding entity's potential role in such an activity, willingness to participate on the basis of government incentives, willingness to participate in teaming arrangements, and cost-sharing potential. The DOE recognizes that expressions of interest do not constitute a commitment of any kind on the part of the respondent. Entities of particular interest related to this announcement are key stakeholders that would participate in funding and/or developing the technology necessary for pioneer plants for direct and/or indirect coal-derived fuel technologies. Such entities include state and municipal agencies, technology and process developers, coal producers, equipment suppliers, the oil industry, the transportation sector, power producers, and chemical manufacturers. Responses will be used to identify entities interested in participating in a pioneer plant program and to develop a source list of potential proposers and/or participants for future solicitations(s). Respond to: U.S. Department of Energy, Federal Energy Technology Center, Attn: J. W. Huemmrich, M.S. 921-143, P.O. Box 10940, Pittsburgh, Pennsylvania 15236-0940 (FAX: (412) 892-6216, Internet: huemmric@petc.doe.gov). Responses should be limited to about 5-10 pages. Information should be submitted pertinent to the technical and business areas of interest, desired role in the research activity (i.e., stakeholder, sponsor, user, or developer), experience of the entity and personnel, and a description of the applicable technology that can result in a pioneer plant. Technical questions should be directed to Richard Hucko, (FAX: (412) 892-4604, Internet: hucko@petc.doe.gov). Over the last two decades, partnerships between U.S. industry and the DOE have fostered the development of highly efficient technologies for both the direct and indirect conversion of coal and other carbonaceous materials to transportation fuels. Recent economic evaluations have shown that, using current technologies, the cost of products from a stand-alone, grass-roots facility would be equivalent to crude oil at $34 per barrel. Continued research and development in liquefaction is expected to reduce the cost of these fuels from $34 per barrel to about $27 per barrel. In addition to these stand-alone, grass-roots plants, there is opportunity to integrate liquefaction plants, at greatly reduced costs, with existing manufacturing facilities, for example, at petroleum refineries and integrated coal gasification combined cycle (IGCC) power plants. These plants, when integrated with existing facilities, are referred to as "entrance plants." These integrations would include the co-processing of coal with petroleum resid and/or wastes in the case of direct liquefaction, and the co-production of power and fuels/chemicals in the case of indirect liquefaction. Economic analyses have shown that, if liquefaction technologies were fully developed and demonstration successfully completed, such plants can be competitive with crude at around $19-23 per barrel, a price comparable to that of crude oil today. Thus, liquefaction technologies integrated with refineries or other manufacturing facilities can be considered a near- to mid-term technology that could be deployed in time to help alleviate a potential liquid fuels shortfall. (To receive a copy of the report that assesses this scenario, contact J. W. Huemmrich at the address given above.) Even though studies indicate that shortage of liquid transportation fuels could begin to occur around 2015, the DOE believes that the private sector will not independently pursue the construction of liquefaction facilities. The DOE recognizes that private investors and process developers are not likely to design and construct even an entrance plant until technical, economic, and regulatory risks are acceptable. These risks can be made acceptable by following a development path from bench-scale research to the construction of a small entrance plant, which is defined as a pioneer plant. A pioneer plant is envisioned to be a small-scale, possibly single-train commercial facility adjacent to an existing refinery or IGCC power plant. Such a plant would demonstrate sustained integrated performance and the ability to successfully scale the integrated technologies, providing a database to make technical, economic, and regulatory risks manageable. POC testing of liquefaction technologies will be essential, together with conceptual design studies, so that sufficient data will be available to design and construct pioneer plants. It is the demonstration of the technologies through these pioneer-scale plants that will reduce technical and economic risks, and identify those regulatory issues critical to future permitting of such facilities. The undertaking of a pioneer plant represents great financial risks for the project team because of the nature of the project. Accordingly, a higher rate of return on the investment would be needed to compensate for these risks. A potential mechanism to boost the investment return is the use of incentives such as the exemptions of the Federal and state fuel excise taxes for fuels produced from these plants.This type of incentive, as well as others, will be pursued by the DOE during the early stages of work related to this activity. It is envisioned that, once the technologies to convert domestic carbonaceous resources to liquids have been proven at the pioneer scale, larger "entrance" plants, and eventually stand-alone commercial plants will be economically viable without Government incentives or other support. Consistent with this, the DOE/FETC, is pursuing the concept of fostering the design, construction, and operation of a pioneer plant(s) for direct and/or indirect conversion of coal and other carbonaceous feedstocks (e.g., petroleum resid, petroleum coke, municipal wastes, etc.). The primary purpose of the plant(s) would be to produce transportation fuels or transportation fuel precursors. However, coproduction of chemicals, chemical intermediates, and electricity would constitute an acceptable complement. It is contemplated that construction of the pioneer plant would begin around 2002. The initial phase would focus on teaming arrangements, conceptual process design, feasibility assessment, lab/bench-scale/POC testing, and site selection. These activities would be followed by a second phase that would involve the final process design as well as firm establishment of the teaming and funding arrangements. The third phase would involve construction and operation of the pioneer plant. Construction of the pioneer plant(s) is envisioned to be funded solely by the private sector, potentially with tax credits or other incentives from various Government entities. Funding by the state where the site is located is also a possibility. DOE's contribution to the program would consist of cost-shared efforts to perform conceptual designs as well as to perform experimental and developmental activities necessary to minimize risk for pioneer plant implementation. Non-Federal project cost-sharing on the order of 20 to 50 percent will be required for the early work. It is envisioned that at least one and possibly two pioneer plants would be supported as part of this activity. WEB: Click here for more information about the Federal Energy Technology Center., http://www.petc.doe.gov. E-MAIL: Click here to submit a response to this Special Notice., huemmric@petc.doe.gov.

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