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Mass. plant will make natural gas from coal

A Cambridge start-up that converts coal to clean-burning natural gas will take its cutting-edge process to the next step, building a $25 million demonstration plant near Fall River to ready their technology for full-scale commercial production.

GreatPoint Energy Inc., is scheduled today to unveil its plan to develop the project, which includes a research center, at the Brayton Point power station in Somerset, a coal-burning plant owned by Dominion, a Richmond, Va., utility and energy company. GreatPoint will create more than 100 jobs at its new facility after completion in about a year.

"This is where we are going to demonstrate our technology to the world," said Andrew Perlman, GreatPoint's chief executive. "This is going to be the most leading-edge gasification center anywhere."

The development of the demonstration plant and research center represents a milestone not only for the company, but also the state and its burgeoning alternative energy sector. GreatPoint is considered among the nation's most promising alternative energy firms, and recently raised $100 million from investors, one of the industry's biggest venture capital rounds ever.

For Massachusetts, GreatPoint's selection of Brayton Point over sites in three other states further solidifies its position as a leading center of alternative energy technology, an emerging sector that employs an estimated 14,000 in the state. It also indicates the sector is maturing, moving closer to commercial production that could mean even more growth for the sector and state employment.

"This isn't a few hippies in the backwoods," said Warren Leon, director of the Massachusetts Renewable Energy Trust, which finances alternative energy projects. "GreatPoint is showing that creative new technologies are starting to hit the big time."

The demonstration plant will produce natural gas on a small scale as a way to test and refine the process for full-scale commercial production. Once the technology proves ready for commercial production, Massachusetts could reap another benefit too: lower energy costs. Massachusetts companies and residents pay among the highest natural gas rates in the country. Perlman said his firm's process can produce natural gas for about half the cost it now sells for.

"One of our major economic challenges is the high cost of natural gas," said state Secretary of Energy and Environmental Affairs Ian Bowles, "and this is potentially a game-changing technology."

GreatPoint uses a proprietary catalyst to convert coal, petroleum coke, a refining byproduct, and organic material, such as switch grass, into methane, a clean-burning natural gas that can be transported through existing pipelines and burned in existing equipment. The process prevents the release of carbon dioxide, a so-called greenhouse gas that contributes to global warming, and captures other byproducts, such as sulfur, which can be reused by chemical makers.

The combination of environmental benefits and the ability to use the gas with existing equipment has attracted venture firms as well as traditional energy companies, such as AES Corp. of Arlington, Va., and Suncor Energy, Inc. of Calgary, Alberta, as investors. Coal is among the most plentiful, but also dirtiest energy sources, and solving the pollution problem is "one of the Holy Grails of the clean energy movements," said Jim Matheson, general partner at Flagship Ventures, a Cambridge venture capital firm that invests in alternative energy companies.

Flagship hasn't invested in GreatPoint.

"If you figure out a way to use coal cleanly, it's a huge opportunity," Matheson said. "Maybe they'll solve it, maybe they won't, but they're going after it in a very deliberate way."

GreatPoint was founded in 2005, and now employs about 45 in Cambridge and at a small pilot program near Chicago. The Chicago-area workforce will be consolidated into the new facility.

Perlman said the firm selected Massachusetts because of its access to engineering and technical talent at MIT and other universities, and the efforts of Governor Deval Patrick. During a meeting on energy this year, Patrick brought GreatPoint together with Dominion, one of the nation's biggest power generators. Dominion, which has a small investment in GreatPoint, is providing the site and technical support for the project, said Diane Leopold, a Dominion vice president.

"We don't believe coal is going to go away," said Leopold, "and we want to find a way to use coal that's extremely clean."

Robert Gavin can be reached at rgavin@globe.com.

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