The last few years have seen a rash of federal research grant awards, media announcements and actions by the Wyoming Legislature, all betting on the future of carbon capture, utilization and storage. The technology has been in the experimental phase for decades, but the imminence of coal-fired power plant retirements and the imperative to reduce carbon emissions have given it new urgency.
Unfortunately, the push to commercialize CCUS is at the mercy of a disappearing fleet of coal-fired power plants. Due to market forces, 40% of U.S. coal-generating capacity was retired between 2010 and 2019. Morgan Stanley predicts that electricity from coal will likely disappear from the U.S. power grid by 2033, largely replaced by renewable energy resources. Natural-gas-fired plants have become the lower-carbon resource of choice to back up wind and solar, doubling the output of coal plants in 2020.
Nonetheless, federal dollars and state enthusiasm for CCUS research continue to grow. While grants provide critical funding for the University of Wyoming and for small business startups in the state, it seems premature to declare the emergence of a carbon capture industry in Wyoming. Even if a demonstration project succeeded, retrofitting older power plants with CCUS would not make economic sense. According to the Energy Information Administration, 88% of the remaining U.S. coal fleet is at least 30 years old and the capacity-weighted average age of operating plants is 42 years. No new coal plants of significant size have been built in the country since 2013.
Even ignoring this dismal forecast for eligible coal plants, CCUS has not proven cost effective. The now-shuttered Petra Nova plant in Houston provides the largest and most recent case study. The plant shut down last year purportedly due to low oil prices, but more likely its frequent outages and 46% capacity utilization during the first five months of 2020 convinced its backers to cut their losses. According to Reuters, the plant suffered chronic mechanical problems and routinely missed its targets.
A report by the Institute for Energy Economics and Financial Analysis claimed Petra Nova’s shutdown “highlights the deep financial risks” facing other CCUS projects in the works. The report concludes that Petra Nova failed to perform as advertised and that other planned coal-fired carbon capture projects face a similar fate. “Proponents of these projects are selling an unproven dream that in all likelihood will become a nightmare for unsuspecting investors,” the report states. Like most CCUS demonstration projects, Petra Nova incorporated a liquid amine solvent to separate the carbon dioxide (CO2) from the flue gas. Its owners claimed to have achieved 90% CO2 removal but failed to account for the carbon emissions from its auxiliary power and steam generation, according to the IEEFA report. Factoring in those offsets would lower the separation efficiency to 65%. Even under ideal circumstances, this process pays a 25% energy penalty due to the required pumps, compressors and steam used to reheat the solvent. This added fuel cost, along with inflated capital and operating costs, would destroy the slim chance that coal has to compete in the electric power market.
It appears the CarbonSAFE project at Dry Fork Station’s Integrated Test Center (ITC) has pinned its hopes on a newer, membrane separation technology — a tacit indictment of the liquid sorbents that have driven CCUS research and its longstanding promise to rescue coal. Membrane technology would reduce the energy penalty and eliminate hazardous chemical emissions, but the cost to remove CO2 rises steeply beyond 60% separation efficiency. The Global CCS Institute rates the technology readiness level of membranes much lower than that of liquid amines.
Perhaps that justifies the research envisioned at the ITC, but we should not exaggerate the potential boost to Wyoming’s long-term economic health.