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Proposed US CCS projects need ‘careful review’
17/5/2023
The US Department of Energy (DOE) recently selected five coal-fired power projects for potential funding in its carbon, capture and storage (CCS) programme. However, the Institute for Energy Economics and Financial Analysis (IEEFA) says the proposed projects need ‘careful review for cost and technology risks’.
IEEFA has consistently opposed the retrofit of coal-fired power plants with CCS, believing that the technology ‘does not work as promised’ and has ‘high project capital costs’ that ‘will only exacerbate coal’s already tenuous competitiveness in the power market’. Furthermore, it claims that the length of time required to design, permit and build such CCS projects ‘will hinder efforts to move away from fossil fuels as quickly as possible’.
The Institute states that the proposed retrofit of the Four Corners coal plant in New Mexico ‘fits squarely in that mould’. The facility is majority owned by Arizona Public Service (APS), which had previously announced plans to close the 1,540 MW station in 2031. The Navajo Transitional Energy Company (NTEC), a minority owner of the plant, is proposing the CCS retrofit.
‘Leaving aside the significant liability and operational issues that would need to be resolved before NTEC and its partners could pursue their retrofit plans, DOE needs to focus on the technology risks associated with the proposal,’ comments IEEFA, noting that the plan would be more than six times bigger than the largest previously installed coal-fired CCS facility, the 240 MW Petra Nova capture unit at the WA Parish plant in Texas. IEEFA says it has ‘chronicled the problems there [at Petra Nova]’ and ‘sees no reason to believe that those performance issues have been resolved, or that new problems wouldn’t surface due to the [proposed Four Corners] project’s much larger size’.
One of NTEC’s partners, Enchant Energy, had earlier pushed for a CCS retrofit at the now-closed San Juan coal plant in New Mexico. The front-end engineering and design (FEED) study completed for that project estimated that the plant’s net output after the retrofit would drop from 914 MW to just 482 MW, at a projected capital cost of $1.55bn, reports IEEFA. ‘Given that the Four Corners project would use the same technology, similar high parasitic load levels and capital costs can be expected,’ it notes.
‘There are cheaper and quicker ways to get clean, reliable capacity,’ states IEEFA, pointing to APS’ recent announcement that it had energised a fleet of battery storage projects with 141 MW of capacity located at solar projects across its service territory. APS expects to add another 60 MW by the middle of the year, all with three hours of energy that can be used to store solar generation during the day and discharge it during peak evening hours.
‘There also is the simple fact that Four Corners is an old facility,’ adds IEEFA. ‘Unit 4 is 54 years old and Unit 5 is 53 years old. Any retrofit is unlikely to be completed in less than five years, meaning the new capture equipment would be bolted onto what amounts to a 60-year-old frame. Is it reasonable to assume that the ageing frame can continue to operate for the 20 years required to amortise the cost of the CCS equipment? We don’t think so.’
Another project IEEFA says the DOE needs to ‘closely examine before signing off on any federal funding’ is a proposal by Duke Indiana to add CCS equipment to its Edwardsport integrated gasification combined cycle (IGCC) facility in Indiana. The 618 MW facility was built in 2013 and was planned to run on gasified coal. However, ‘repeated problems with its gasification system have limited Edwardsport to only a 39% capacity factor on gasified coal’, reports IEEFA.
Three other power projects are being assessed by DOE for negotiations. Two are at conventional combined cycle gas facilities – the 1,120 MW Polk plant owned by Tampa Electric in Florida and the 1,000 MW Lake Charles plant owned by Entergy in Louisiana. The fifth facility is Dallman Unit 4, a 196 MW coal-fired plant owned by the city of Springfield, Illinois.
‘In evaluating the combined cycle projects DOE needs to take seriously the first-of-a-kind nature of the two proposals,’ warns IEEFA. Although it is claimed that the projects would be able to capture a minimum of 95% of the CO2 emissions, IEEFA suggests that: ‘The reality is we don’t know how those projects will perform because large-scale CCS capture on gas-fired power plants has never been commercially demonstrated.’
However, IEEFA adds that out of the proposed CCS projects, the Illinois plant ‘may be the most sensible of the proposals since it is by far the smallest’ and ‘would represent an incremental learning opportunity’.
