SOURCE: Catalytica Energy Systems, Inc.

September 06, 2005 08:30 ET

SCR-Tech Teams With AEP and Southern Company to Optimize Sulfur Dioxide Conversion in Regenerated SCR Catalyst

CHARLOTTE, NC -- (MARKET WIRE) -- September 6, 2005 -- SCR-Tech, a subsidiary of Catalytica Energy Systems, Inc. (NASDAQ: CESI), announced today that it has entered into a development partnership with American Electric Power (NYSE: AEP), and Southern Company (NYSE: SO), to measure and evaluate the reduction conversion in sulfur dioxide (SO2) to sulfur trioxide (SO3) demonstrated by regenerated Selective Catalytic Reduction (SCR) catalyst. The goal of this effort is to optimize SCR-Tech's regeneration process to further minimize SO3 formation while maintaining or exceeding full catalytic activity.

SCR-Tech's proprietary cleaning and regeneration process extends the life of SCR catalyst by achieving full restoration of its activity level and NOx reduction performance. In addition to offering SCR operators a lower cost alternative to purchasing new catalyst, the use of regenerated SCR catalyst has been demonstrated to reduce the conversion of SO2 to SO3 by up to 35% when compared with the conversion rate typically achieved by fresh catalyst. Research has shown that minimizing the amount of SO3 produced through the oxidation of SO2 within the catalyst can help coal-fired power generating facilities minimize SO3 emissions and their related corrosive costs.

Under the terms of the joint development initiative, the three companies will work together over the next several months to test and quantify the SO2 to SO3 conversion rates demonstrated by SCR catalyst regenerated under a variety of conditions, and benchmark the performance of this regenerated catalyst against new and deactivated catalyst. The data collected throughout the program will be used to ascertain the optimal balance between catalyst activity level and SO2 conversion specific to the varied operating conditions of coal-fired boilers.

Data collected by SCR-Tech will be used to further tailor its catalyst regeneration process to achieve maximum restoration of catalytic activity while minimizing SO2 to SO3 conversion. Results from the jointly funded project, which is scheduled to be completed in the first half of 2006, are expected to be published in a technical paper and presented at an industry conference next year.

SCR-Tech President Bill McMahon, commented, "SCR-Tech is committed to continuous technology innovations to help our customers improve performance and reduce their costs associated with SCR systems. We look forward to working closely with two of the leading and most respected utilities in the world to further enhance our service offerings and expand our spectrum of cost-effective environmental compliance solutions. By optimizing our regeneration process to accommodate the diversity of fuels, firing systems and catalyst types available in the industry, we believe we will be able to create additional value for AEP , Southern Company, and all of our future customers."

Tom Hart, Manager of Air Emission Control Equipment Engineering of AEP's Engineering Technical and Environmental Services organization, stated, "AEP has long been a leader in research and development efforts designed to improve emissions-control technologies for existing coal-fired generation or to develop clean-coal technologies for future generation. This project with SCR-Tech is an important one, since its results may help to minimize the creation in SO3 from existing emissions-control systems while controlling the cost of catalyst used in the systems, both important factors to companies like AEP that are committed to generating electricity in a cost-effective, environmentally responsible manner."

Steve Wilson, Director of Research and Technology Management for Southern Company's Research & Environmental Affairs organization, stated, "We pride ourselves in being an industry leader in finding cleaner ways to produce electricity. As one of SCR-Tech's first customers, we've had a long-standing relationship and have experienced first-hand the cost benefits and emissions reduction performance that can be achieved through the use of regenerated catalyst. We believe that this technology shows great promise in further reducing the total amount of SO3 that is produced by the SCR catalyst through improved understanding and optimization of this process."

American Electric Power, based in Columbus, Ohio, is one of the largest electric utilities in the United States, with more than 5 million customers linked to AEP's 11-state electricity transmission and distribution grid. To learn more about AEP, please visit www.AEP.com.

With more than 4 million customers, Atlanta-based Southern Company is the premier super-regional energy company in the Southeast and a leading U.S. producer of electricity. Southern Company owns electric utilities in four states, a growing competitive generation company and a competitive retail natural gas business, as well as fiber optics and wireless communications. Southern Company brands are known for excellent customer service, high reliability and retail electric prices that are 15 percent below the national average. Southern Company has been ranked the nation's top energy utility in the American Customer Satisfaction Index six years in a row. Southern Company has more than 500,000 shareholders, making its common stock one of the most widely held in the United States. Visit the Southern Company Web site at www.southerncompany.com.

SCR-Tech, based in Charlotte, North Carolina, is the North American leader in catalyst regeneration technologies and management services for selective catalytic reduction (SCR) systems used by coal-fired power plants to reduce nitrogen oxides (NOx) emissions. The Company offers a wide variety of services, including SCR catalyst cleaning, rejuvenation and regeneration, as well as SCR system management and consulting services, to help power plant operators optimize their SCR system operation while reducing overall operating and maintenance costs. SCR-Tech is a wholly owned subsidiary of Catalytica Energy Systems, Inc. (NASDAQ: CESI), a leading provider of innovative emissions solutions for combustion-related applications in the power generation and transportation industries. Find SCR-Tech on the Worldwide Web at www.SCR-Tech.com.

Catalytica Energy Systems, based in Gilbert, Arizona, provides innovative products and services to meet the rapidly growing demand for emissions control solutions in the power generation and transportation industries. Through its SCR-Tech subsidiary (www.SCR-Tech.com), the Company offers a variety of services for coal-fired power plants using selective catalytic reduction (SCR) systems to reduce nitrogen oxides (NOx) emissions. Catalytica Energy Systems' other business activities include the design, development and manufacture of advanced products based on its proprietary catalyst and fuel processing technologies to offer cost-effective solutions for reducing NOx emissions from diesel engines and natural gas-fired turbines. The Company's Xonon® Diesel Fuel Processing technology is designed to facilitate significant NOx reduction from both on-road and stationary diesel engines by improving the performance of NOx adsorber catalyst systems. Catalytica Energy Systems' commercially available Xonon Cool Combustion® system offers a breakthrough pollution prevention approach for gas turbines to achieve ultra-low emissions power generation through a proprietary catalytic combustion process. Other activities include the development of fuel processing systems for fuel cell applications in stationary, auxiliary, and back-up power applications. Find Catalytica Energy Systems on the Worldwide Web at www.CatalyticaEnergy.com.

This news release contains forward-looking statements regarding project plans, timelines, funding and partnership arrangements; the ability of SCR-Tech's cleaning and regeneration process to extend the useful life of SCR catalyst and provide a lower cost alternative to catalyst replacement; the ability of SCR-Tech to apply the data gathered throughout the project to ascertain an optimal balance between catalyst activity level and SO2 conversion and apply this model to successfully achieve further reductions in SO2 to SO3 conversion; the timing associated with completion of the project; the prospects for publishing and presenting a technical paper with the project results at an industry conference next year; and SCR-Tech's ability to further enhance its service offerings and expand its spectrum of cost-effective compliance solutions. These statements are subject to risks and uncertainties that could cause actual results and events to differ materially from those expressed in the forward-looking statements. These risks and uncertainties include, among others: that Catalytica Energy Systems may not be able to accurately predict future market opportunities and growth prospects for its SCR-Tech business; possible fluctuations in economic conditions affecting the markets for SCR-Tech's service offerings; the risk that a market may not develop or be maintained for SCR-Tech's service offerings; that there may be unanticipated technical setbacks associated with enhancing SCR-Tech's catalyst regeneration process; that there may be unanticipated events that could impact the Company's ability to successfully manage SCR-Tech's business; changes in the environmental requirements relating to NOx or SO3 emissions; that SCR-Tech may be unable to maintain current or develop future strategic or customer relationships for its services, including with utility and IPP customers; that any decision on the part of a customer to no longer use SCR-Tech's services could negatively adversely impact our business or results of operations; and the other risks set forth in Catalytica Energy Systems' most recently filed Forms 10-K and 10-Q filed with the Securities and Exchange Commission. Catalytica Energy Systems undertakes no obligation to update any forward-looking statements to reflect new information, events, or circumstances occurring after the date of this release.

Editor's Note: Xonon and Cool Combustion are registered trademarks of Catalytica Energy Systems, Inc., Gilbert, AZ, USA

Contact Information

  • CONTACT:

    SCR-Tech
    Bill McMahon
    President
    (704) 827-8933

    AEP
    Pat D. Hemlepp
    Corp. Media Relations
    (614) 716-1620

    Southern Company
    Tiffany Gilstrap
    Media Relations
    (866) 506-5333

    Catalytica Energy Systems
    Megan Meloni
    Investor Relations
    (650) 940-6253