There is considerable interest by utilities to expand their portfolios to include “renewable energy” production, i.e., those forms of generation that utilize the replenishing supply of energy from nature. High on the list are wind energy, solar power and thermal steam generation.

However, the recent discovery of new pockets of fossil fuels like natural gas has encouraged the expansion of highly efficient, combined-cycle power plants burning gas. This tried and true technology will be around for some time into the future.

The astute investment recovery practitioner will see two opportunities during routine outages in fossil fuel plants – opportunity with equipment disposition and the opportunity to develop ongoing relationships with plant environmental personnel regarding change-out of plant catalyst medium.

Characteristic of generating plants utilizing fossil fuels are the accompanying pollution- control systems to clean the exhaust gases laden with pollutants that are produced by the combustion of fossil fuels. Like automobiles, fossil plants burn fuel to produce electricity. The byproduct of combustion creates three key pollutants: hydrocarbons, carbon monoxide and oxides of nitrogen, all of which impact air quality and are regulated by local, state and federal agencies.

Somewhat similar to the catalytic converter in your vehicle helping to lessen the emissions into the atmosphere, power plant exhaust scrubbers utilize catalysts.

What’s a catalyst? By definition, a catalyst is a substance that causes or accelerates a chemical reaction. In the combustion cycle, the catalyst would be the substance or medium that encourages reactions that change the molecular structure of the pollutants to form harmless elements like nitrogen, oxygen, carbon dioxide and water.

The agent of the catalytic process is a noble metal like platinum, palladium or rhodium. These minute particles of precious metals are dispersed as a wash coat or spray coat onto a honeycomb medium. As the pollutant-laden gases pass over the wash coat, there is a chemical reaction between the metal particulate and the pollutants. The onceharmful elements of hydrocarbons, carbon monoxide and nitrous oxides are converted to carbon dioxide, nitrogen and water. What leaves the stack is now clean exhaust that meets regulatory guidelines.

However, after years of use and activity, the catalyst wash coat Because poisons in the exhaust gases break down the wash coat, coupled with continuous exposure to high temperatures which erode the catalytic ability, the system must be replaced or reconditioned.

RECOVERING THE SPENT CATALYST. The process of recovering the precious metals (the spent catalyst) is time-consuming and costly, but worth pursuing. The contractor hired to replace the catalytic medium may offer a nominal refund to remove the old system and dispose of it. This is a great opportunity for the IR team to perform some due diligence to determine the real value of the reclaimable metals.

The OEM specification sheet should offer some insight into the concentrations of various noble metals impregnated into the wash coat. From this information, the agent can extrapolate the content, by weight, of the precious metal across the entire catalytic system being replaced.

The processor of the catalyst material will outline the costs associated with removing the wash coat and performing an assay to determine the content. Once the assay is complete, typical settlement options are based on the percentage weight of the assay or settlement based on actual metal weights. The latter could take up to two months to process and could involve multiple processing facilities.

To begin the processing, the substrate containing the wash coat is shredded and pulverized, separating the powdery wash coat from the metal backing. The powder is then ground and homogenized to obtain an equalized mixture of material. Three samples should be taken for the assay: the processor, independent inspection and certification consultant (if hired), and the control. Based on acceptance of the two independent assays, the seller may settle based on average metal content in the assay, and the processor would accept responsibility for final processing.

The next step involves smelting the material in a furnace to separate the metals. Two distinct components precipitate out of smelting – slag comprised of alumina silicate and the metallic compound containing the noble metals and iron. The final separation of metals is done by an end processor who chemically isolates each of the metals. This process can take up to two months, and the final settlement would be based on actual weights of platinum, palladium and rhodium left after chemical extraction.

This is a brief recap of a presentation made at the 80th Investment Recovery Conference in March. A presentation outline can be downloaded at InvRecovery.org/presentations.

– Barry Street, CMIR, Florida Power & Light barry.street@fpl.com 561.845.3371