U.S. Incentives to Capture and Store CO 2
Fact sheet on the 45Q tax credit. 45Q was created in 2008 as a tax credit to incentivize the development of carbon capture, utilization, and storage (CCUS) projects.
01 COAL, LIGNITE, AND PEAT↗
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Carbon capture, utilization, and storage hub development on the Gulf Coast
Abstract The Gulf Coast of the United States hosts diverse power generation, refining, and petrochemical processing facilities, resulting in the nation's largest volumetric concentration of industrial CO 2 emissions, rivaled only by the Ohio River Valley. These emissions sources are concentrated in specific industrial clusters that allow combining emissions streams to achieve economies of scale. The region is currently undergoing globally significant industrial expansion and investment as a result of abundant and inexpensive regional unconventional natural gas availability, and is a growing exporter of liquefied natural gas (LNG). Opportunities to integrate CO 2 emission management within the diverse energy chains in the region are volumetrically significant and include both concentrated and dilute sources. Significant examples of capture, transport, and storage exist. Offshore storage is particularly attractive, as it provides simplified land leasing models (single governmental land owner), proven reservoir quality, and presents fewer risks to both protected groundwater and populated areas. Projects can now take advantage of recently expanded opportunities under section 45Q of the Internal Revenue Service tax code. The region continues to evolve as an active carbon‐handling hub, and is uniquely suited to justify additional investment in carbon capture, utilization, and storage (CCUS) technologies via a large‐scale integrated project development. Continued development of integrated projects will allow the region to continue to grow economically within its strong fossil‐fuel handling competence focus while advancing low‐carbon energy technologies that maintain globally competitiveness. © 2021 The Authors. Greenhouse Gases: Science and Technology published by Society of Chemical Industry and John Wiley & Sons Ltd.
45Q↗
Agent-based modeling for multimodal transportation of CO 2 for carbon capture, utilization, and storage: CCUS-agent
Here, to understand the system-level interactions between the entities in Carbon Capture, Utilization, and Storage (CCUS), an agent-based foundational modeling tool, CCUS-Agent, is developed for a large-scale study of transportation flows and infrastructure in the United States. Key features of the tool include (i) modular design, (ii) multiple transportation modes, (iii) capabilities for extension, and (iv) testing against various system components and networks of small and large sizes. Five matching algorithms for CO 2 supply agents (e.g., powerplants and industrial facilities) and demand agents (e.g., storage and utilization sites) are explored: Most Profitable First Year (MPFY), Most Profitable All Years (MPAY), Shortest Total Distance First Year (SDFY), Shortest Total Distance All Years (SDAY), and Shortest distance to long-haul transport All Years (ACAY). Before matching, the supply agent, demand agent, and route must be available, and the connection must be profitable. A profitable connection means the supply agent portion of revenue from the 45Q tax credit must cover the supply agent costs and all transportation costs, while the demand agent revenue portion must cover all demand agent costs. A case study employing over 5500 supply and demand agents and multimodal CCUS transportation infrastructure in the contiguous United States is conducted. The results suggest that it is possible to capture over 9 billion tonnes (GT) of CO 2 from 2025 to 2043, which will increase significantly to 22 GT if the capture costs are reduced by 40 %. The MPFY and SDFY algorithms capture more CO 2 earlier in the time horizon, while the MPAY and SDAY algorithms capture more later in the time horizon.
32 ENERGY CONSERVATION, CONSUMPTION, AND UTILIZATI↗
A screening model for predicting injection well pressure buildup and plume extent in CO 2 geologic storage projects
We present a new screening model for predicting injection well pressure buildup and CO 2 plume migration for CO 2 geologic sequestration projects. The model requires only limited information and is quite accurate when compared to detailed simulation results. Such models can assist project developers during the early days of project planning (e.g., for 45Q related projects), and also help regulators perform simple checks against detailed numerical models. The screening model consists of two correlations: one for injectivity index in terms of the slope of the CO 2 fractional flow curve, and the second for total storage efficiency within the footprint of plume as a function of gravity number and slope of the CO 2 fractional flow curve. Using these two correlations, as well as a knowledge of some basic reservoir characteristics and estimates of fluid properties from standard correlations, the injection-well pressure buildup and CO 2 plume extent in the formation can be readily estimated. Finally, the new correlations show a good match with the results of the underlying simulations, and also provide good agreement with independent calculations for two example problems.
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Life cycle assessment of railway ties fabricated with ductile cementitious composites and carbonation curing
This paper evaluates the lifecycle economic and environmental benefits of implementing CO 2 utilization and storage within advanced engineered cementitious composite (ECC) railway ties. Using CO 2 -treated ECC ties can yield lifecycle benefits primarily due to enhanced material properties – increased lifespan in this case – instead of due to the stored CO 2 that would otherwise enter the atmosphere. Sequestration-based policies such as 45Q in the United States would therefore not incentivize deployment of ECC railway ties, despite their considerable CO 2 avoidance opportunities. To reach these conclusions, cradle-to-grave lifecycle models were developed for ECC ties and conventional concrete ties and evaluated under 1000 possible use-phase scenarios. The models incorporated premature tie failures – consistent with real-world observations – that were used to study a wide range of non-linear impacts arising from the random nature of tie failures and replacements. The results show that past studies that neglected premature failure of ties may have underestimated lifecycle greenhouse gas (GHG) emissions of concrete rail ties by nearly three times. Overall, servicing a track with ECC ties instead of concrete ties can reduce the lifecycle costs and GHG emissions by 12% and 21% respectively, based on median values of 1000 model run results. The expected benefits would be larger for entities like Amtrak that plan to expand concrete tie infrastructure despite significant challenges with premature concrete tie failures. Furthermore, the results of this study suggest that the lifespan of ECC ties needs to be at least 25% longer than concrete ties to achieve net lifecycle benefits. The possibility of this should be tested and confirmed under real-world conditions.
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Policies and Programs Available in the United States in Support of Carbon Capture and Utilization
The article seeks to compile policies and programs that provide revenue and financing support for carbon capture and utilizations projects, which are available in the United States. Often technically minded entrepreneurs and investors new to this space are unaware of available support, which could help successful development of carbon capture and utilization projects.Covered in this article are the 45Q tax credit, green bonds, loan guarantee programs, the regional greenhouse gas initiative, and low carbon fuel standards.1This article covers the eligibility and effect of each policy and program. The article also briefly reviews the current state of technology and summarizes how each technology pathway pairs with the policies covered in the article.The goal of the article is to serve as a primer for lawyers, corporate development professionals, and practitioners, who seek to learn about policies and programs available to support carbon capture and utilization (CCU) projects.
29 ENERGY PLANNING, POLICY, AND ECONOMY↗
A comprehensive techno-eco-assessment of CO 2 enhanced oil recovery projects using a machine-learning assisted workflow
Carbon dioxide enhanced oil recovery (CO 2 -EOR) projects not only extract residual oil but also sequestrate CO 2 in the depleted reservoirs. Here, this study develops a machine-learning-based workflow to co-optimize the hydrocarbon recovery, CO 2 sequestration volume and project net present value (NPV) simultaneously. Considering the trade-off relationships among the objective functions, support vector regression with Gaussian kernel (Gaussian- SVR) proxies are coupled with multi-objective particle swarm optimization (PSO) protocol and generate Pareto optimal solutions. Taking advantage of the high computational efficacy of the proxy model, economic uncertainties introduced by tax credits, capital costs and oil price are investigated by this study. The results indicate that the tax incentive policy (Section 45Q) plays a vital role in enhancing the economic returns of CO 2 -EOR projects, especially under the depression of crude oil market. The proposed workflow has been successfully implemented to optimize a water alternative CO 2 (CO 2 -WAG) injection project in a depleted oil sand in the US. The optimization results yield an incremental oil production of 15.8 MM STB and 1.37 MM metric tons of CO 2 storage in a 20-year development strategy, with the highest project NPV to be 205.6 MM US dollars.
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Integrated Carbon Capture and Storage in Hydrogen Production: A Combined Techno-Economic and Life Cycle Assessment
This paper presents a coupled techno-economic and life cycle assessment of “blue” hydrogen to be produced at a hydrogen facility through steam methane reforming (SMR) equipped with carbon capture and storage (CCS). Blue hydrogen was modeled in ChemCAD, while an integrated asset model represented the carbon capture and storage chain. An unabated carbon dioxide (CO 2 ) configuration release 11.99 kgCO 2 -eq/ kgH 2 . Capturing ≥95% of the CO 2 stream lowers the carbon footprint to 6.59 kgCO 2 -eq/kgH2 but raises the levelized cost of hydrogen (LCOH) from $\$$1.82/kgH 2 (no CO 2 capture) to $\$$3.22/kgH 2 ; the U.S. 45Q tax credit reduces it to $\$$2.59/kgH 2 . Incorporating CCS reduces the levelized net present value from $\$$0.87/kgH 2 to $\$$0.74/kgH 2 , owing to additional capture, transport, and storage costs. Supplying SMR with low-carbon electricity, especially nuclear, wind, or hydro, delivers the lowest carbon footprint relative to geothermal or grid mixes. Sensitivity analysis identifies that hydrogen sales price, internal rate of return, and CCS cost as the strongest economic levers, while electricity demand dominates residual lifecycle emissions. The results underscore a clear trade-off; substantial CO 2 reductions are achievable, but only with higher production costs, making supportive policy instruments, access to clean power, and robust hydrogen markets essential for large-scale deployment of blue hydrogen.
carbon capture↗
Total cost of carbon capture and storage implemented at a regional scale: northeastern and midwestern United States
We model the costs of carbon capture and storage (CCS) in subsurface geological formations for emissions from 138 northeastern and midwestern electricity-generating power plants. The analysis suggests coal-sourced CO 2 emissions can be stored in this region at a cost of $52–$60 ton -1 , whereas the cost to store emission from natural-gas-fired plants ranges from approximately $80 to $90. Storing emissions offshore increases the lowest total costs of CCS to over $60 per ton of CO 2 for coal. Because there apparently is sufficient onshore storage in the northeastern and midwestern United States, offshore storage is not necessary or economical unless there are additional costs or suitability issues associated with the onshore reservoirs. For example, if formation pressures are prohibitive in a large-scale deployment of onshore CCS, or if there is opposition to onshore storage, offshore storage space could probably store emissions at an additional cost of less than $10 ton -1 . Finally, it is likely that more than 8 Gt of total CO 2 emissions from this region can be stored for less $60 ton -1 , slightly more than the $50 ton -1 Section 45Q tax credits incentivizing CCS.
Life Sciences & Biomedicine - Other Topics↗
Building an EPA Class VI Permit Application
Summary To accelerate the commercialization of carbon capture and storage (CCS), the US Department of Energy (US DOE) is building on decades of characterization efforts and pilot-scale projects through their CarbonSAFE program. Administered through their National Energy Technology Laboratory, this program seeks to bring fully integrated projects to the sector that can store more than 50 million tonnes of CO2 over a 30-year period. The program, which was enacted before the enhancement of Internal Revenue Code Section 45Q, is in the capture assessment, characterization, and permitting phase. The objectives of this paper are to discuss (a) the injection permitting requirements of the CarbonSAFE projects; (b) information gathering in support of the permit; (c) the timelines of field development and permit-related activities; (d) the major technical components of the field development plan; and (e) early feedback from the regulators toward acceptance of the permit. In Mississippi, more than 30,000 acres have been characterized by six deep characterization wells, a deep groundwater well, and 92 line miles of 2D seismic as part of the CarbonSAFE Project ECO2S. During the acquisition of seismic data, all receiver lines were live, which resulted in the generation of a pseudo-3D seismic design. The incorporation of a 3D seismic survey was not included as part of this project due to logistical difficulties presented by the undulating, wooded surface terrain. A suite of openhole geophysical logs was taken from each well, allowing for a detailed interpretation of prospective storage reservoirs and confining intervals to complement the analysis carried out on the 290 ft of a whole core that was cut through the prospective confining zone and storage reservoir. The detailed geologic and reservoir data were assembled and entered into a 3D model to assess the injection capacity and the area of review (AoR). This information fed into the detailed corrective action, monitoring, testing, and postinjection site care (PISC) modeling. The results have been exceptional. The geologic assessment has revealed three primary storage targets, ranging in depth from 3,500 ft to 6,000 ft. These storage reservoirs net 1,300 ft of sandstone, with mean porosity and permeability of 29% and 3.6 darcies, respectively. Together, these reservoirs have storage capacities that may exceed 20 million tonnes per square mile, making this a gigatonne prospect. Forward modeling of the project resulted in an AoR of 16 sq miles, injecting about 8000 t/d, for 30 years, via two deep injection wells. The excellent confining characteristics of the caprock, relatively simple geologic structure, and lack of historical well drilling activity in this area provide excellent containment of the injected CO2. Based on this work, the project has proposed 20 years of PISC. To date, only two US CO2 injection permits have been granted. These projects relied on a singular capture point feeding a singular sequestration point (source to sink), and considerations have not been made to garner CO2 emissions from other industrial sources. The Kemper County Storage Complex is a first-of-its-kind storage hub concept that looks to develop an area capable of storing significant quantities of CO2 from the region. Also, this work will show how characterization efforts, geological and numerical modeling efforts, and plan development were constructed in support of permit and incentives acceptance.
Energy & Fuels↗
North Dakota Integrated Carbon Storage Complex Feasibility Study. Final report
In spring 2017, the Energy & Environmental Research Center (EERC) initiated an effort to determine the feasibility of developing a commercial-scale CO 2 geologic storage complex able to store 50+ million tonnes (Mt) of CO 2 in central North Dakota safely, permanently, and economically. The objective was to fulfill the goals of the U.S. Department of Energy (DOE) Carbon Storage Assurance Facility Enterprise (CarbonSAFE) Initiative and address technical and nontechnical challenges specific to commercial-scale deployment of a CO2 storage project. The findings clearly show that the concept of capturing CO 2 from a lignite-fired electrical generation facility in central North Dakota and safely and permanently storing the CO 2 in the deep subsurface is indeed technically, economically, and socially feasible. This project evaluated two study areas and their respective geologic storage complexes located adjacent to separate coal-fired facilities in North Dakota: the Basin Electric Power Cooperative (BEPC)-owned Great Plains Synfuels Plant (GPSP) and the Minnkota Power Cooperative (Minnkota)-owned Milton R. Young Station (MRYS). These locations, one with CO 2 capture in place and an existing CO 2 pipeline, are bolstered by progressive North Dakota pore space ownership and long-term liability laws. These elements and a motivated team created an ideal synergistic scenario for ensuring success of the CarbonSAFE Initiative and promoting North Dakota’s statewide vision for carbon management. The project included drilling two new geologic characterization wells, integrating an existing 3-D seismic survey, creating a geologic model subsequently used for injection simulation, a risk assessment, public outreach, and generating a site development plan based on results. In addition, the performance of select National Risk Assessment Partnership tools was evaluated. The geologic characterization wells were drilled ~5600 feet deep to the Broom Creek Formation; ~350 feet of core was retrieved from each well. The core included the Broom Creek (targeted injection zone) and a portion of the overlying Opeche Shale (seal). The Flemmer-1 well, west of Beulah, North Dakota, yielded 169 feet of sandstone. The BNI-1 well located south of Center, North Dakota, yielded 124 feet of sandstone. In each case, laboratory analysis of the sandstone showed permeability in the 300–1000-mD range, with porosity of 20%–30%. The Flemmer-1 well was sited within the boundaries of an existing 3-D seismic survey. Colocating the well with the seismic survey maximized the relationship between new and legacy data and developed a first-of-its-kind interpretation of the geologic fabric of the Broom Creek. Geologic characterization data were integrated into a 5544-mi 2 geocellular model that encompassed both new wells and stratigraphy from the surface to the Amsden Formation (underlying the Broom Creek). The model was later expanded vertically to include the deeper Black Island–Deadwood interval to examine its potential viability as a storage target. The geocellular model provided the foundation for dynamic simulation of CO 2 into the Broom Creek. Results of the simulation suggest that the Broom Creek could accept the DOE target rate of 2 Mt/yr of CO 2 into as few as two wells. To bracket the expected capture from MRYS, simulations were also investigated for a 4-Mt/yr rate near MRYS. Although more wells are needed (two additional), the Broom Creek still has the storage resource to accept the CO 2 at the increased rate. A risk assessment exercise was conducted to identify and assess technical and nontechnical risks that could prevent potential candidate storage complexes within the study area from serving as commercial storage sites. The assessment identified and evaluated six technical risk categories: 1) CO 2 injectivity, 2) storage capacity, 3) lateral migration of CO 2 , 4) lateral pressure propagation, 5) vertical migration of CO 2 or formation brine, and 6) induced seismicity. Following two rounds of analysis and scoring, no risks were determined to preclude continued efforts to develop carbon capture, utilization, and storage (CCUS) in central North Dakota. The risk assessment results will be used to guide future site characterization, modeling and simulation, and monitoring activities. A specific nontechnical strategic risk based on challenges that may be realized in amalgamation of pore space resulted in vertically expanding the geologic model to incorporate the potential for stacked storage in multiple saline reservoirs. By including the Black Island–Deadwood interval (the basal sedimentary reservoir in this region), the amalgamated areal extent could be reduced by as much as 45%. Working with a smaller geographic area reduces risks and costs associated with monitoring and pore space leasing. An economic evaluation incorporating capture; transport (<5 mi); Class VI wells; permitting; and monitoring, verification, and accounting suggests implementing commercial-scale CCUS is economically attractive if the federal tax benefits of 45Q are included. This is validated by Minnkota’s continued pursuit of CO 2 capture and geologic storage at MRYS through its Project Tundra initiative, indicating that there is a business case for CCUS in central North Dakota. Currently, North Dakota is the only state with underground injection control (UIC) Class VI primacy. Built into the North Dakota Century Code is a series of regulatory requirements that guide the process to obtain a Class VI CO 2 storage facility permit. As part of this project, a site development plan was compiled to assure compliance with North Dakota’s requirements to permit a commercial-scale CO 2 storage operation and includes a prospective time line encompassing a general breakdown of activities. In total, an estimated 30 months would be needed to execute the necessary steps to attain a North Dakota CO 2 storage facility permit. Outreach was an integral part of the project and encompassed any project-related activity that had contact or exposure beyond the project team. The goals of outreach were to foster an environment from which stakeholders could make informed decisions about the project and gauge community receptiveness to a CCUS project. A consistent set of messages and outreach products were developed in conjunction with an outreach advisory board that integrated project partners and team members. To gauge public acceptability of geologically storing CO 2 , 5611 households in the project area were invited to participate in an online survey. The survey results indicate that the public attitude regarding CCUS is neutral to positive, with strong sentiment that CO 2 capture and storage may be an approach to maintain the economic vitality of the region. To achieve project objectives, critical support in the form of financial backing, engineering evaluations, site access, outreach collaboration, operations data, risk assessment/evaluation, and software access was provided by BEPC, the North Dakota Industrial Commission Lignite Research Council, ALLETE Clean Energy, BNI Energy, North American Coal Corporation, Minnkota, Prairie Public Broadcasting, Computer Modelling Group Ltd., and Schlumberger.
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Integrated Monitoring Volume: A Summary of Monitoring Studies Conducted in Niagaran Carbonate Pinnacle Reefs During Enhanced Oil Recovery with CO 2
The Midwest Regional Carbon Sequestration Partnership (MRCSP) was founded in 2003 as part of the U.S. Department of Energy’s (DOE’s) Regional Carbon Sequestration Partnership initiative. Since its founding, MRCSP has made significant strides toward making CCUS a viable option for states in the region. The public/private consortium, funded through the DOE Regional Carbon Sequestration Initiative, brings together nearly 40 industry partners and 10 states. Battelle, as the project lead, oversees research, development and operations and coordinates activities among the partners. The incremental, phased approach has built a valuable knowledge base for the industry and paved the way for commercial-scale adoption of CCUS technologies. From 2008 to 2020, MRCSP Phase III focused on the development of large-scale injection projects. This report is part of a series of reports prepared under the Midwestern Regional Carbon Sequestration Partnership (MRCSP) Phase III (Development Phase). These reports summarize and detail the findings of the work conducted under the Phase III project. During the MRCSP Phase III monitoring period, over 1 million metric tons of CO 2 was injected into ten Silurian-age (Niagaran) pinnacle reef reservoirs in Otsego County, Michigan that are operated by Core Energy, LLC. There are over 800 pinnacle reefs in northern Michigan, and collectively, these geologic features have sufficient capacity to store several hundred million metric tons of CO 2 . Moreover, most of the reefs are oil-bearing and went through primary production in the 1970s and 1980s; therefore, by injecting CO 2 into the reefs, there is a real opportunity to realize additional (enhanced) oil recovery (EOR) and to permanently store CO 2 after EOR. A key objective of the MRCSP Phase III project is to evaluate the effectiveness of various technologies for monitoring CO 2 that has been injected into deep geologic formations. Monitoring may be required at CO 2 storage sites for a variety of reasons, including to meet UIC Class II (EOR sites) or Class VI (storage only sites) permit requirements or EPA greenhouse gas reporting rule requirements or to qualify for tax credits under the 45Q tax credit rule. The results of this monitoring study should prove useful to operators considering using carbonate pinnacle reefs of Northern Michigan for CO 2 storage.
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Hydrogen Storage for Flexible Fossil Fuel Power Generation: Integration of Underground Hydrogen Storage with Gas Turbine (Final Report)
As the nation continues to encourage, through market structures and financial incentives, the proliferation of intermittent renewable electricity, how to optimize the ever-changing electric grid and identify means to retain and improve resilience, while ensuring continued reductions in GHG emissions, will be critical. According to Bloomberg, wind & solar generated 10.5% of US electricity in 2020 and that percentage continues to grow. In support of expanding renewable energy use, and to address its intermittent nature, this project will develop the Hydrogen Storage for Flexible Fossil Fuel Power Generation platform that is dispatchable, reliable, repeatable and have the ability to produce zero or negative carbon power while interfacing with geology capable of CO2 and hydrogen storage. GTI Energy (GTIE) and team members Illinois State Geological Survey (ISGS), Mitsubishi Heavy Industries America (MHIA), Ameren Illinois, Hexagon Purus, and the Low Carbon Resources Initiative (LCRI) completed a Phase I Conceptual Study under contract DE-FE0032012 for Hydrogen Storage for Flexible Fossil Fuel Power Generation: Integration of Underground Hydrogen Storage with Gas Turbine. The Hydrogen Storage for Flexible Fossil Fuel Power Generation platform addresses the intermittent nature of the expanding use of Variable Renewable Energy (VRE) generation. The low cost of the electricity (COE) generated results in greater dispatch and more operation at higher power levels (higher efficiency), fewer short intervals, and fewer start/stop cycles. The reliable, resilient system can produce zero carbon power and store hydrogen. It will demonstrate hydrogen storage in geologic formations like those used in natural gas underground storage thus enabling large scale storage of hydrogen in sedimentary strata across the United States rather than in geographically restricted salt caverns. The Phase I study confirmed the system is feasible and generates power at lower cost than other low carbon approaches. The demonstration defines the pathway for broad commercial application and will accelerate the development of larger systems suitable for centralized utility scale electricity production. The study advanced the maturity of the H 2 storage-based system with flexible power generation by completing a Pre-FEED study (Phase II). The Pre-FEED focused on the selected Energy Farm on the University of Illinois Urbana-Champaign (UIUC) site that includes above ground and underground hydrogen storage, low-carbon hydrogen production (GTI’s Compact Hydrogen Generator, CHG) with underground CO2 sequestration, and a 40-MW class gas turbine. The Pre-FEED addressed the entire system and its interconnection to the natural gas and electric grid and mitigation of key risks, such as storage behavior, load-following, and system operation. During Phase 1 of the project, the team completed key tasks, which moved the entire demonstration project, specific components and approaches closer to commercialization. These Phase I Accomplishments include: Completing System Requirements Review; Completing System Layout and Modeling - Heat & Mass Balance and Process Flow Diagram; Completing modelling of 9 turbine performance cases; Evaluating rock strata for underground storage of hydrogen and sequestration of carbon dioxide; Completing initial modelling of underground storage of hydrogen and withdrawal with evaluation of loss and water production; Identifying roadable storage for above ground hydrogen storage; Identifying existing electrical infrastructure for receiving/delivering electricity; Identifying existing gas supply infrastructure for receiving natural gas; Document concept design/development plans in required reports. Conclusions: The 12-month Feasibility study in Phase I study was completed and confirmed the system is feasible and generates power at lower cost than other low carbon approaches and even lower cost than the reference NGCC plant without carbon capture when taking advantage of 45Q carbon credits. The study enabled the fidelity of the concept to be improved and allowed identification of the requirements for the system. Defining the individual system and component requirements was performed via the system requirements review with the whole team. These requirements were then incorporated into and iterated with our Heat & Mass Balance process model and process flow diagrams were generated to reflect the overall system. This information was then used to complete the TEA and show economic feasibility. Large scale non-salt geologic storage of hydrogen is an enabling technology for a hydrogen-fired turbine that can be retrofitted into large-scale electric generating units (EGU). Our demonstration will include 428 MWh or ~4 hours full load of hydrogen storage (above and underground). Carbon capture inherent to the CHG process can capture 90% CO 2 (with upgrades to >98%). This system provides a COE of 23% savings relative to an NGCC with a post combustion amine system. Our proposed storage system decouples carbon capture and hydrogen production from power production; therefore, we expect our proposed system’s efficiency and variable COE to be superior resulting in overall higher dispatch and reduced deep cycling. Our demonstration will be full to multi-day hydrogen storage and has the potential for longer (seasonal) duration commercially. The demonstration defines the pathway for broad commercial application and will accelerate the development of larger systems suitable for centralized utility scale electricity production.
03 NATURAL GAS↗
Front-End Engineering Design for Piperazine with the Advanced Stripper
This Department of Energy (DOE) funded project was executed with the goal of preparing a Front-End Engineering Design (FEED) for the capture and compression of 90% of the CO2 that would normally be emitted from an existing natural gas combined cycle (NGCC) plant. The FEED focused on the application of the piperazine advanced stripper (PZAS) process at Mustang Station of the Golden Spread Electric Cooperative (GSEC), which consists of two gas turbines with common heat recovery steam generator (HRSG). The University of Texas at Austin (UT) served as the prime contractor, and subcontracted AECOM Technical Services and Trimeric Corporation to support FEED development. This project team has worked together to advance PZAS for more than a decade. ExxonMobil, Chevron, and Total provided project co-funding. The objectives of this work included: 1. To advance engineering design such that a comprehensive estimate for the total installed cost of a full-scale PZAS CO2 Capture Plant with CO2 compression can be developed on an existing NGCC power plant. a. These detailed costs can also be used to qualify PZAS and other related second generation (2G) amine scrubbing processes for use on cogeneration facilities in refineries and chemical plants that use gas turbines with HRSGs to produce steam. b. These detailed costs will help qualify 2G amine scrubbing for use on NGCC power plants and establish a more accurate baseline cost to be used as a target by other capture technologies. 2. To provide cost details to be used in the economic optimization of the process features of PZAS and other 2G amine scrubbing processes. 3. To provide DOE with a more detailed understanding of carbon capture costs in a commercial application, enabling DOE to better design its R&D program to improve the economics for carbon capture. 4. To provide the host site and cost share partners with the information necessary to determine whether a commercial project to capture and use CO2 for enhanced oil recovery (EOR) or for sequestration can be justified (when accounting for the 45Q tax credit). A key component of the FEED is the estimated total installed cost, which provides a basis for the likely capital investment necessary to implement the PZAS carbon capture process at this location and scale. In combination with the included economic analysis, which accounts for potential revenue from the produced CO2, potential avenues to profitability are explored. The major findings of the FEED are as follows: The Mustang Station PZAS CO2 Capture Plant estimated total project cost of $698 MM of which $384 MM was direct costs. The annual operating costs were $32.6 MM. The total investment for a PZAS facility at Mustang Station is $725 MM. This estimate includes owner’s cost of $25 million and a contingency of $110 MM. • The study estimated the CO2 capture plant at Mustang Station would generate CO2 at $110/tonne for EOR, assuming a 12% IRR (internal rate of return) and an 85% capacity factor. For CO2 storage, the same case would achieve a 12% IRR at about $114/tonne. At a capacity factor of 52%, the storage and EOR cases would break even when carbon is priced ~$150/tonne. The economic analysis determined that the capacity factor and utility pricing, among other variable factors, had a significant effect on the economics and will need additional studied. • The energy penalty of the PZAS plant would be about 46 MW in connected power and 35 MW in operating load. The natural gas requirement (for the Gas Boiler package) would be about 354 MMBTU/hr. • The FEED revealed no major risks in process maturity. However, some areas were outlined for further engineering during detailed design, which included the Gas Boiler system, general arrangement and site layout, air coolers, schedule development, and optimization of the process for higher CO2 removal. • If PZAS were to be implemented at another host site, additional opportunities for cost reduction for would include cost reduction through use of cooling water and steam extraction.
03 NATURAL GAS↗
Evaluating Impacts of the Inflation Reduction Act and Bipartisan Infrastructure Law on the U.S. Power System
The Inflation Reduction Act of 2022 (IRA) and the Infrastructure Investment and Jobs Act of 2021, commonly referred to as the 'Bipartisan Infrastructure Law (BIL),' collectively represent the largest commitment of the U.S. Federal Government to invest in the modernization and decarbonization of the U.S. energy system. The Congressional Budget Office (CBO) estimates that total support for the broad range of climate and clean energy programs, tax credits, and other incentives authorized through the two laws will exceed $430 billion from 2022 through 2031 (CRS 2022; CBO 2021, 2022). While the climate and clean energy provisions are numerous and have the potential to impact all aspects of the U.S. energy system from fuel and electricity production to final consumption in industry, transportation, and buildings, the provisions relevant to the electricity sector - in particular the suite of tax credits for clean generation, storage, and carbon dioxide ( CO 2 ) capture and storage - are expected to be some of the most consequential in terms of emissions reduction and clean energy deployment (Larsen et al. 2022; Jenkins, Mayfield, et al. 2022; Mahajan et al. 2022; Zhao et al. 2022). In this report, we detail the methods and results of a study estimating the potential impacts of key provisions of IRA and BIL on the contiguous U.S. power sector from present day through 2030. The analysis employs an advanced power system planning model, the Regional Energy Deployment System (ReEDS), to evaluate how major provisions from both laws impact investment in and operation of utility-scale generation, storage, and transmission, and, in turn, how those changes impact power system costs, emissions, and climate and health damages. While not exhaustive in capturing every provision, the analysis estimates the possible scale of power-sector impacts that could result from the modeled provisions in IRA and BIL. The study is structured around two scenarios to evaluate the potential impacts of both laws on the power sector: 1) No New Policy: A counter-factual scenario that reflects all Federal and state policies enacted as of September 2022, with exception to IRA and BIL, and assumes load growth consistent with the Energy Information Administration's Annual Energy Outlook 2022 (AEO22) Reference case (EIA 2022a); 2) IRA-BIL: A scenario reflecting all Federal and state policies enacted as of September 2022, including key IRA and BIL provisions, most notably the investment and production tax credits for zero-carbon emitting electricity generation and storage (ITC and PTC), the tax credit for CO 2 capture and storage (45Q), and the tax credit for existing nuclear plants (described further in Section 2.3). To account for the impacts of IRA and BIL on electrification, assumes increased load growth consistent with a scaled version of the Medium Electrification scenario from the Electrification Futures Study (Mai et al. 2018). These scenarios are simulated across seven sets of assumptions with varying projected future electricity market conditions, including technology costs and performance, natural gas prices, and the degree of availability, feasibility, and cost of development of renewable resources, electricity transmission, and CO 2 pipeline, injection, and storage infrastructure. In addition, we simulate two sensitivities on the 'policy' treatment in which we vary key assumptions pertaining to the realized value of the clean electricity ITC and PTC: 1) the cost of monetization of tax credits, and 2) the level of bonus crediting realized by project developers. We demonstrate that IRA and BIL have the collective potential to drive substantial growth in clean electricity by 2030, while reducing costs for consumers, mitigating climate change, and decreasing the human health impacts of power sector emissions. However, we also demonstrate that if expected cost improvements of clean technologies are not realized and/or constraints on deployment driven by factors such as supply-chain challenges, regulatory hurdles, and the social acceptability of energy infrastructure development limit the rate of clean energy and associated infrastructure deployment (such as transmission), then the share of clean generation achieved and the associated emissions benefits realized may be substantively reduced.
29 ENERGY PLANNING, POLICY, AND ECONOMY↗
Flexible FlueCO2
Carbon dioxide (CO2) emission reductions remain a significant challenge on the path to clean energy. There are increasing legislative, social, and environmental factors motivating CO2 emissions reduction from power plants with carbon capture and storage (CCS). CCS in natural gas combined cycle (NGCC) power plants is critical to achieve a net-zero carbon electricity grid. Enhanced 45Q tax credits provide new incentives, but currently available technologies are unable to profitably operate in grids with deep variable renewable penetration which require flexible NGCC operation. Luna Labs has developed the FlueCO2 membrane to enable a profitable NGCC-CCS process. The FlueCO2 membrane couples steam transport across the membrane to CO2 transport in the opposite direction, enabling high capture efficiencies and low energy costs even at low CO2 concentrations. The dual-phase membrane can operate in the range of typical flue gas temperatures and pressures and does not require temperature or pressure cycling. Luna Labs’ FlueCO2 technology enables flexible and profitable operation of NGCC plants with lower capital investment and impact on electricity prices. In this Phase 1 project, Luna Labs utilized experimental testing, modeling, process simulation, and standardized costing methodologies to evaluate the techno-economic value of a 650 MW greenfield NGCC plant with FlueCO2 (NGCC-FlueCO2). Key design requirements for operation were established and plant performance under load-leveling conditions was validated through computational fluid dynamics and process modeling. Luna Labs developed a dynamic modeling tool which modeled plant operational modes across a variety of tax structures and electricity pricing scenarios to project the overall Net Present Value (NPV) of the NGCC-FlueCO2. FlueCO2 minimizes the impact of CCS integration on plant operation by integrating directly into the NGCC heat recovery steam generator (HRSG). By tapping into the plant’s low-pressure (LP) steam, operators can divert LP steam to the greenfield NGCC and/or CCS process in response to dynamic markets. Since FlueCO2 will not significantly affect HRSG (or NGCC) operation, CCS only turns off during peak power demand (>$250/MWh). Under baseload conditions, FlueCO2 lowers the capital (37%), energy (36%) and carbon capture (<$40/tonne) costs and can increase the overall plant lifetime NPV by approximately ~$1B in comparison with NGCC solvent-based capture reference cases (NETL Case 31B). Luna Labs has shared its costing tools with several interested partners and customers, which follows a generalizable approach to costing analysis.
Kelly, Jesse↗
Influence of Hybrid Financial Instruments in Decarbonizing the Industrial Sector
This presentation details the results of an analysis performed to examine the influence of a hybrid financial instrument consisting of the Section 45Q tax credit and a tax on unabated emissions of CO2, on the decision of industrial facilities to retrofit with carbon capture technology.
Harker-Steele, Amanda↗
NORTH DAKOTA CARBONSAFE PHASE III: SITE CHARACTERIZATION AND PERMITTING OF GEOLOGIC STORAGE OF CARBON DIOXIDE
The Energy & Environmental Research Center (EERC), in partnership with Minnkota Power Cooperative Inc. (Minnkota), SLB, and Computer Modelling Group Ltd. (CMG), supported wide-scale deployment of carbon capture and storage (CCS) as part of the U.S. Department of Energy (DOE) National Energy Technology Laboratory Carbon Storage Assurance Facility Enterprise (CarbonSAFE) Initiative Phase III. This phase included the acquisition, analysis, and development of information to fully characterize two storage complexes to demonstrate viable storage resources for commercial volumes of CO2 (defined by DOE as a minimum of 50 million tonnes [MMt] of CO2 within a 30-year period) (National Energy Technology Laboratory, 2024). Phase III also involved the preparation, submission, and approval of North Dakota underground injection control (UIC) Class VI storage facility permits (SFPs)—required precursors to applications for Class VI injection well permits. The presumed viability of commercial-scale CCS, situated adjacent to Minnkota’s Milton R. Young Station (MRYS), is validated by Minnkota’s continued pursuit of Project Tundra—an initiative to build the world’s largest lignite-based CCS project in central North Dakota (www.projecttundrand.com). Project Tundra comprises two scopes of work, Tundra Capture (installation of postcombustion CO2 capture at MRYS) and Tundra SGS (secure geologic storage). The efforts of North Dakota CarbonSAFE Phase III, Site Characterization and Permitting, supported Tundra SGS. Extensive site-specific characterization activities included a successful multimeasurement geophysical approach and drilling a stratigraphic test well (J-ROC 1, subsequently renamed Liberty-1) adjacent to MRYS. Core collection and analyses, downhole testing and fluid sampling, and geophysical logging were performed on J-ROC 1 and on a nearby stratigraphic test well (known as J-LOC 1), which was drilled, cored, and tested under a complementary project funded by the North Dakota Lignite Research Program. The injection tests performed on J-LOC 1 positively impacted the CarbonSAFE project, resulting in fewer proposed injection wells and significant construction, operations, and monitoring cost savings. The characterization data collected and analyses performed were integrated into geologic models, and successive numerical simulations were run to determine CO2 plume extent and subsurface pressure buildup associated with the planned CO2 injection rate of nearly 4 MMt per year. The latter doubles the CarbonSAFE Initiative goal with an estimated 100 MMt of CO2 stored in 20 years. Application of the U.S. Environmental Protection Agency’s (EPA’s) method for estimating the Class VI Rule area of review (AOR) to the overpressurized Broom Creek Formation inspired an alternative method of calculation, called risk-based AOR delineation. This peer-reviewed method was applied for the first time during the storage facility-permitting process. The two SFP applications submitted in 2021 successfully resulted in North Dakota Industrial Commission (NDIC) orders in 2022 authorizing the creation of the storage facility areas and amalgamation of pore space as well as establishing financial responsibility requirements. After approval of the SFPs, Minnkota filed in 2022 applications for permits to reenter the J-ROC 1 well and to drill two new wells—all with the intended purpose to become Class VI injection wells. To establish eligibility under the Internal Revenue Code for Section 45Q tax incentives, a monitoring, reporting, and verification (MRV) plan was prepared and submitted by Minnkota to EPA in 2022, resulting in the first such plan approved in North Dakota. Also in 2022, under the National Environmental Policy Act (NEPA), Minnkota prepared and submitted an environmental information volume (EIV) describing the proposed CCS project and associated potential environmental impacts. Based on the EIV, DOE determined that the proposed construction project required an environmental assessment, and Minnkota submitted the first draft in 2023 and a revised draft in 2024. Both submissions were followed by a public comment period. Subsequently, DOE issued a finding of no significant impact (FONSI) on September 13, 2024. A successful outreach program, strongly based in the production, presentation, and dissemination of informational material, fostered an environment to aid stakeholders in making informed decisions regarding the planned project. Opportunities for public input were provided at various steps along the way, including at county planning and zoning meetings, before and during the SFP administrative hearing, and during environmental assessment public comment periods. In addition, land/pore space owners and mineral owners had various points of contact, including granting access rights, securing pore space leasing, and mineral owner notifications. Based upon the successful storage facility permitting issued by NDIC, approval of the MRV plan by EPA, and receipt of a FONSI under the NEPA, Minnkota is continuing its pursuit of Project Tundra. In December 2023, the Office of Clean Energy Demonstrations under its Carbon Capture Demonstrations Projects Program announced funding for the capture system (Office of Clean Energy Demonstrations, 2023) and a proposal for CarbonSAFE Phase IV: Construction funding was submitted in March 2024 for the storage project. A go/no-go decision to proceed with construction and operations in the Broom Creek Formation is anticipated in 2024. References National Energy Technology Laboratory, CarbonSafe Initiative, https://netl.doe.gov/carbon-management/carbon-storage/carbonsafe (accessed August 2024). Office of Clean Energy Demonstrations, 2023, OCED selects three projects in CA, ND, and TX to reduce harmful carbon pollution, create new economic opportunities, and advance carbon reducing technologies, December, www.energy.gov/oced/articles/oced-selects-three-projects-ca-nd-and-tx-reduce-harmful-carbon-pollution-create-new (accessed August 2024).
Peck, Wesley↗