IEEFA: More Scrutiny Needed For U.S. CCS Projects

The prospects for the Petra Nova carbon capture facility have dimmed significantly after it was announced that NRG Energy just sold its 50 percent stake in the project for a mere $3.6 million. Looking at a larger scale, it represents only half-percent of the projects' $1 billion construction costs. The sale leaves JX Nippon Oil & Gas Exploration Corp. as the sole owner of the 1,904-MW coal-fired Petra Nova power plant in Texas.

The Institute for Energy Economics and Financial Analysis (IEEFA) further noted that the U.S. Department of Energy (DoE) splashed some $195 million into the carbon capture and storage (CCS) facility, IEEFA urged the government to cut any further investment in such projects as the Petra Nova facility has shown that channeling taxpayer money into these projects is a financial loss.

“The U.S. government needs to ask hard questions about investing more taxpayer dollars in CCS for coal plants. The CCS technology used in the Petra Nova project was not new. The DOE called it “proven.” But it did not work as well as promised. Other CCS projects attempted at power plants have failed, as well,” IEEFA stressed in its statement.

The Petra Nova CCS Plant

The Petra Nova facility began operations in 2017. The CCS equipment was installed to capture CO2 from a slipstream of the W.A. Parish Unit 8’s flue gas. The captured CO2 traveled via 80-mile pipeline to an oilfield near Houston for use in enhanced oil recovery (EOR) operations to increase extraction. Petra Nova’s target CCS capture rate was 90 percent.

However, IEEFA stressed that Petra Nova’s owners have never provided the actual data behind that claim. Emissions data for Parish Unit 8 reported to the EPA suggests the actual CO2 capture rate was substantially lower than 90 percent, perhaps as low as 65 percent to 70 percent. And the average capture rate does not include emissions from the gas-fired combustion turbine used to power the facility. Adding those emissions lowers the overall on-site capture rate to perhaps as low as 55 percent to 58 percent.

It was further plagued by technical difficulties, failing to meets its in-operation target of 85 percent. The unit was taken offline in May 2020 and remains down. JX Nippon now says it anticipates bringing Petra Nova back online in the second quarter of 2023 but has not provided an exact schedule or cost estimate.

IEEFA urged the government to sharply scrutinize all claims made by applicants for federal dollars to promote CCS technology. IEEFA research indicates that the technology is far from proven. The Institute further stresses that given the amount of funds involved and the exposure of taxpayer dollars to risk, the U.S. government must implement robust due diligence and get beyond the advertising hype to the actual facts about carbon capture technology. It should not tolerate any more wasteful Petra Nova debacles.

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