CCS Could Increase Coal-Fired Electric Generation Costs By 70%–80%

The first generation of carbon capture and storage (CCS) technologies could increase wholesale power prices by 70% to 80%, but second generation technologies could halve those costs, an Energy Department official told lawmakers at a House hearing on Tuesday.

“I continue to believe that coal is actually a required part of a vibrant American economy—part of the future. In this context, the work we’re doing on CCS is critical. It is a key pathway forward for a sustainable, low carbon, energy future, with an era of abundance of fossil energy that we live in today,” said Dr. Julio Friedmann, deputy assistant secretary for clean coal with the Department of Energy (DOE).

Dr. Friedmann was testifying before the House Energy and Commerce Committee’s Subcommittee on Oversight and Investigation. The focus of the hearing, held Feb. 11, was to review the status of the DOE’s clean coal programs.

One of the most anticipated questions was about the cost of implementing CCS. Congressman Joe Barton (R-Texas) was the first to broach the subject when he said: “All of these carbon capture sequestration technologies add costs to these coal plants. Could you all give the committee, or the subcommittee, a baseline estimate of how much it adds to the cost?”

Responding to the question, Dr. Friedmann said: “The precise number will vary by plant, whether it’s subcritical or supercritical, by coal rank, and by the kind of technology used. Typically, we express these costs as a range, so for the first generation technology that [Dr. Scott Klara, acting director for the DOE’s National Energy Technology Laboratory] was mentioning earlier, we’re looking at something on the order of $70 to $90 a ton. In that context, that looks something like a 70% or 80% increase on the wholesale price of electricity. For the second-generation technologies, which we are developing, it’s our strong expectation that that number will be roughly half. We’ll be looking at something like a $40 or $50 a ton cost.”

“It is in fact a substantial percentage increase in the cost of electricity, but in part that is because the current price of coal is so low that it represents a large percentage increase,” Dr. Friedmann added.

Rep. Michael Burgess (R-Texas) asked: “Where do you think we stand as far as pushing it to commercial viability? Because, after all, that is what I think the government investment was working toward, not just an interesting experiment, but something that will actually work. So can you give us a sense of that—feasibility versus commercial viability?”

“This first generation CCS technology is commercially available today,” Friedmann said. He went on to discuss Petra Nova’s WA Parish CCS project in East Texas. The NRG Energy subsidiary expects to use commercially available post-combustion capture technology. Procurement is expected later this year following financial closure.

First-of-a-kind projects are not typically financed through banks, Friedmann noted. The DOE generally must provide anywhere from 10% to 30% of the cost share into a project in order to get private capital to do the rest. Second-of-a-kind projects are something that the market usually takes on by itself.

Dr. Fredmann said that NRG has informed the DOE that it has been very pleased with its return on investment. He noted government assistance has helped spur the success, but the return on investment from enhanced oil recovery revenues has also been significant. NRG has suggested that with the knowledge gained from the first project, it believes it can do a second project and get sizeable returns on investment without government assistance.

Friedmann said that the DOE is pursuing three technical pathways for carbon capture: post-combustion, pre-combustion, and oxygen-fired combustion or oxy-combustion.

“In terms of major milestones and deliverables, we are looking towards a second generation of demonstrations coming forward in the next few years. They would be completely deployed and the learnings provided back to the public about the middle of the next decade—2022 to 2025 timeframe. Those second generation demonstrations would have substantially reduced costs,” Friedmann stated.

One item that seemed to surprise many of the committee members was Friedmann’s revelation that “We have deployed CCS at the Beulah gasification facility for over 30 years and done CCS from there for enhanced oil recovery for over 10 years.” While he noted that the plant is not technically a power plant, it produces high quality natural gas that goes into a pipeline that fuels power plants.

“There is commercially available technology that can be sold by a wide number of vendors—U.S.-based and international,” Friedmann said, although he noted that most of those technologies have been applied to industrial facilities, not to utility scale coal power plants.

Transformational technologies—those expected to reduce the costs of CCS to their lowest practical level—are expected to be commercially deployed in the field by 2025.

“On a thermodynamic and an engineering basis, they can get maybe another $10, another $15 a ton cheaper, so something on the order of $30 a ton is probably about the limit of what you can reasonably expect,” Friedmann said referring to the added cost of utilizing CCS.

Aaron Larson, associate editor (@AaronL_Power, @POWERmagazine)

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