We've been looking at carbon capture and sequestration (CCS) technology, including Petra Nova in Texas, as this strategy is often hailed as the savior for coal. We noted in 2019's Project Tundra's clean coal; or, does Petra Nova project's tech really reduce carbon emissions? that some industry analysts had doubts.
The Petra Nova project was mothballed in May, E & E News reported in Low oil prices force Petra Nova into 'mothball status' on July 28.
But there's more to the story than just low oil prices.
Recent reading suggests that it's not as robust and economically sound as North Dakota's lignite coal industry raves. CCS is thought to be the key to securing a buyer for Great River Energy Co-op's Coal Creek coal power plant. We reported on the plant's closing in May's Cost of coal: Great River Energy to close Coal Creek power plant, wind power's gain.
How's that going for the coal industry?
Reuters' Nicola Groom reports in Problems plagued U.S. CO2 capture project before shutdown: document:
A $1 billion project to harness carbon dioxide emissions from a Texas coal plant suffered chronic mechanical problems and routinely missed its targets before it was shut down this year, according to a report submitted by the project’s owners to the U.S. Department of Energy.
The Petra Nova plant’s performance was seen as a major test of emerging efforts to capture planet-warming gases and store them below ground, a technology considered crucial to companies and governments hoping to fight climate change.
The joint venture project between NRG Energy Inc and Japan’s JX Nippon had received a $190 million grant from the U.S. government. Before being mothballed, it was the only U.S. project capturing carbon from a coal-fired power plant.
Since Petra Nova started up in 2017, it suffered outages on 367 days, according to a technical report it sent to the DOE in March. Issues with the carbon-capture facility accounted for more than a quarter of the outage days, followed by problems with the plant’s dedicated natural gas power unit, according to the report.
The facility also missed its carbon capture targets by about 17%: It captured 3.8 million short tons of carbon dioxide during its first three years, shy of the 4.6 million short tons developers had expected.
The plant was designed to capture 33% of the carbon emissions from one of four units at the W.A. Parish coal plant, and pipe it 81 miles to the West Ranch oil field, where it would push more oil to the surface.
Department of Energy spokeswoman Shaylyn Hynes said the department believes that, despite the outages outlined in the report, the project had been generally successful, and that NRG had idled the project “due to the pandemic and the low price of oil, not failed technology.”
“DOE remains committed to CCUS technology as it is critical to meeting our nation’s emission reduction goals,” she said, referring to carbon capture, utilization and storage.
NRG idled the facility on May 1, saying a collapse in the price of oil prompted by the coronavirus pandemic made it uneconomical.
NRG would not comment on the plant’s technical performance, but said it could be brought back online when economic conditions improve. . . .
Petra Nova’s shutdown “highlights the deep financial risks” facing other CCS projects in the works, according to a report by the Institute for Energy Economics and Financial Analysis.
Here's the document:
Petra Nova DOE NETL Report uploaded by Sally Jo Sorensen on Scribd
In IEEFA U.S.: Mothballing of Petra Nova carbon capture project shows likely fate of other coal-fired CCS initiatives, a press release from the Institute for Energy Economics and Financial Analysis, we read:
A research brief published today by the Institute for Energy Economics and Financial Analysis (IEEFA) concludes that the abrupt recent shutdown of the Petra Nova coal-fired carbon capture plant in Texas should be seen as a strong signal for investors to avoid such projects.
The report—Petra Nova Mothballing Post-Mortem: Closure of Texas Carbon Capture Plant Is a Warning Sign—describes how the project failed to perform as predicted after going online in January 2017 and how its recent mothballing by NRG Energy should warn investors off other coal-fired carbon capture projects.
The 240-megawatt Petra Nova project, located at Unit 8 of the W.A. Parish Generating Station near Houston, was the only commercially operational coal-fired CCS project in the U.S. It has been cited frequently by carbon capture promoters as a shining model of success that could be replicated widely to keep coal-fired plants online and was advertised as a means to use carbon dioxide emissions to improve production in nearby oil wells.
The IEEFA report concludes that Petra Nova failed to perform as advertised and that other planned coal-fired carbon capture projects face a similar fate. Such projects include one promoted heavily in New Mexico by Enchant Energy and another backed by Minnkota Power Cooperative in North Dakota.
“Proponents of these projects are selling an unproven dream that in all likelihood will become a nightmare for unsuspecting investors,” said Dennis Wamsted, an IEEFA analyst and lead author of the report. “Investors would do well to conduct their due diligence before investing in any coal-fired carbon capture project anywhere.”
The report notes that Petra Nova’s core investors and owners—NRG and the U.S. Department of Energy (DOE)—had never publicly addressed essential performance issues at Petra Nova. It highlights several persistent questions:
- Whether the plant really consistently captured 90% of the carbon dioxide in the slipstream it was processing, as advertised.
- What it cost to capture carbon dioxide.
- How much the captured CO2 helped in boosting production at NRG’s affiliated oil field.
- Whether the Petra Nova project’s track record ever suggested it was economically viable.
The IEEFA report notes also that Petra Nova benefitted from significant DOE funding and concessionary lending from the Japanese government, benefits that may not be available for other proposed projects, further limiting their economic viability.
“Clearly, Petra Nova was never the money-maker the company had hoped it would be,” the report states. “What should be even more alarming to potential CCS investors elsewhere is that Petra Nova benefitted from a $190 million investment from the U.S. Department of Energy and received $250 million in concessionary lending from the Japan Bank for International Cooperation (JBIC) and Mizuho Bank, Ltd.”The report describes also how Petra Nova’s failure is not the sole indicator of the difficulties facing carbon capture initiatives at coal-fired power plants.
“Additional risk comes from broader market dynamics that can be difficult to forecast. Here, the performance at Parish Unit 8 is a perfect example. The plant was a steady performer through the end of 2019, but 2020 has been a different story. For the first four months of the year (according to the most recent data available from the Energy Information Administration), the unit’s capacity factor was just 45.9%. An investor expecting a certain level of CO2 emissions and the receipt of 45Q tax credits based on unrealistically high and/or long-term levels of generation (and CO2 capture) was clearly out of the question at Petra Nova this year. This phenomenon could very well be repeated at other carbon capture projects, a very real possibility that should give investors pause.”
Here's that research brief from (IEEFA) that "concludes that the abrupt recent shutdown of the Petra Nova coal-fired carbon capture plant in Texas should be seen as a strong signal for investors to avoid such projects."
Petra Nova Mothballing Post... uploaded by Sally Jo Sorensen on Scribd:
Quartz's Tim McDonnell reports in The business model for carbon capture is broken:
In the months since the pandemic cratered the price of oil, the financial fallout has spread from drilling companies to refineries and oilfield maintenance companies. Now the crash has claimed another, more unlikely victim: The only system built to capture carbon emissions from a coal plant in the US, one of only two worldwide.
The $1 billion system, known as Petra Nova, was built in 2017 to catch CO2 from one unit of a coal plant near Houston. That plant is one of the dirtiest in Texas, both in terms of climate and air quality impacts, according to a Rice University study. Petra Nova was meant to cut the unit’s carbon footprint by about a third—roughly the equivalent of taking 300,000 cars off the road each year.
But on July 28, E&E News broke the story that the facility has been shuttered since May. And while the plant’s owners have said they plan to get it running again once the economy improves, Petra Nova’s shutdown exposes the weird market dynamics that could threaten the sustainability of carbon capture facilities in progress around the world. . . .
Large-scale carbon capture and storage (CCS) systems, many of which rely on EOR, have been rolled out at nearly two dozen facilities worldwide, from chemical and fertilizer factories to natural gas processing plants. But they’ve remained elusive for power plants.
In large part, that’s because the CO2 in power plant emissions is relatively diffuse. And that means it’s more expensive to capture.
One groundbreaking coal plant CCS project in Mississippi turned into an infamous $8 billion boondoggle before it was scrapped in 2018. The world’s only other power plant CCS project, in Canada, has fared better: It claims to have captured 3 million tons of CO2 since 2014, and has managed to stay open despite the low oil price because the country’s strict limits on coal pollution make the economics more favorable.
The $1 billion Petra Nova project was supposed to top them all. But according to a report the plant’s owners filed to the Department of Energy in March, the results have been mixed. . . .
There's more at Oil Price's Why Is Carbon Capture Struggling In Texas?, Energy and Policy Institute's Petra Nova page, and alternative investing publication Karma Impact's Failed Carbon Capture Storage Project Spells Trouble for Future Ventures, Say Experts. In the final piece, Neanda Salvaterra reports:
The IEEFA report says investors should scrutinize CCS projects tied to the fossil fuel industry as they may experience similar challenges as Petra Nova: “The mothballing of Petra Nova highlights the deep financial risks facing other proposed U.S. coal-fired carbon capture projects, including Enchant Energy’s plan for the San Juan Generating Station in New Mexico and Minnkota Power Cooperative’s Tundra Project at the Milton R. Young Station in North Dakota.”
Houston Chronicle energy business columnist Chris Tomlinson shares an interesting take in Oil industry could lose by gambling on carbon capture.
You get the picture.
Carbon efforts at capturing hearts and minds of Minnesota legislature
On April 1, we noted in our North Dakota energy digest: coal, oil, ethanol tanking amid Saudi-Russian feud, COVID19 woes,"the cheery marketing (and expensive greenwashing) of carbon capture by the Great Plains Institute to Minnesota legislators, and its friends in other non-profits."
In February, we also noted that the Lignite Energy Council set up MN political fund.
With the pre-primary reports from political action committees in, we can learn about the getting and spending of the Lignite Energy Council Political Fund. By July 20. 2020, the fund received $4,900.00 and gave $3,750.00 to candidates and $250 to a party unit.
Only one DFL candidate, Ranger senator David Tomassoni received a check ($250). The Republicans getting $250 checks were incumbents Willmar state rep Dave Baker; Ham Lake state senator Michelle Benson; Farmington state rep Pat Garofalo; Red Wing state senator Michael Groggin; Burnsville state senator Dan Hall; Princeton state senator Andrew Mathews; Buffalo state rep. Marion O'Neill; Prior Lake state senator Eric Pratt; Brook Park state senator Jason Rarick; Marshall-area state rep Chris Swedinski; and Hanska state rep Paul Torkelson.
The PAC gave $250 to candidates Woodbury Republican Mary Giuliani Stephens, who is challenging DFL Senate Minority Leader Susan Kent--and to Republican House contenders Jordan Rasmussion (Fergus Falls) and Spencer Igo (Grand Rapids), who will likely fill the seats now occupied by retiring members Bob Nornes and Sandra Layman respectively.
The party unit? The 33rd Senate District RPM, once upon a time the hotbed for the climate denial group, Minnesotans for Global Warming. We can't make this up.
As for the donors, here's the entire report; most of those giving to the political fund work in the lignite industry--or in the case of some, promote it.
Lignite Energy Council Political Fund 2020 Pre-Primary Report uploaded by Sally Jo Sorensen on Scribd
Of course, the contributors are also able to give to individual candidates, within the legally set limits. Only one has done so. US Siteworks CEO Bart Anderson, Monticello, who gave the political fund $300.00, also gave Shakopee Republican Erik Mortensen for House $1000.
Photo: Great River Energy's Coal Creek power plant, which the electric generating co-operative is closing in 2022.
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