Lone CC&S Coal Project Closed (NRG rate base boondoggle)

Different technologies, different time periods, different rationales, same result. Lesson learned again: markets pick winners, leaving the losers for government.

It was synthetic fuels then; it is coal carbon capture & storage (CCC&S) today.

News flash: The billion-dollar Petra Nova Coal Carbon Capture System (CCCS) outside of Houston, enabled by a $190 million U.S. Department of Energy grant, has announced closure. Last May, NRG Energy put Petra Nova “in reserve shutdown.” It now faces the scrap heap.

From its start-up in 2017, Petra Nova suffered cost overruns, prolonged outages, and other problems associated with new, unproven technology. It also failed to meet its CO2 capture goals of one-third of the coal unit’s CO2 emissions.

The 240-MW project at Coal Unit 8 of the W.A. Parish Generating Station was designed to remove one-third of the coal’s CO2. As the only operational CCCS project, the failure signals to industry and government that capturing coal’s CO2 for “carbon neutrality” is, to use Bill McKibben’s words, “wildly uneocomic.”

The alarm bells are ringing. Stated a headline at the Institute for Energy Economics and Financial Analysis:

Petra Nova Mothballing Post-Mortem: Closure of Texas Carbon Capture Plant Is a Warning Sign Red Flags for Investors on Coal-Fired CCS Projects; Shutdown Lays Bare the Risks Around Proposals that Include Enchant Energy’s in New Mexico and the Tundra Project in North Dakota

An autopsy will need to cover these questions:

• Was Petra Nova really capturing 90% of the carbon dioxide from the 240-MW project? If not, what were the problems?
• What were the economics of the project when on-line?
• And how much of the captured CO2 increase oil production, and what is the net CO2 calculation assuming the incremental oil is burned?

Short of these answers, several general lessons can be gleaned:

• Of what is technically possible, only a small subset is economic
• Trump energy policy failed when it resorted to government quick-fixed and taxpayer subsidies
• Special government favor brings out the worst in corporations
• The carbon-based nature of fossil fuels is not to be ‘reversed’

Molly Taft provides the details:

• “Early last year, the Trump administration’s Department of Energy celebrated a special birthday. ‘Happy Third Operating Anniversary, Petra Nova!’ the agency trumpeted in a press release. The release boasted of a coal-fired power plant in Texas that seemed to have done the impossible: It successfully removed carbon dioxide from the plant’s emissions for three years, safely storing them….”
• “Last week, NRG Energy, which owns the project, announced that it would be shut down indefinitely, in what may be one of the last gasps for carbon capture and storage technology in the U.S….”
• “Decades of research has made CCS technically feasible, but it’s both incredibly complex and wildly expensive. Petra Nova was the only operational CCS project in the U.S., and the largest one in the world using its specific technology.”
• “While other projects have attempted to get off the ground in the U.S., there have been some painfully high-profile failures, including one plant in Mississippi where costs ballooned more than 200 percent to $7.5 billion without ever actually coming online.”
• “… the fossil fuel industry continues to chase after carbon capture. Just this week, ExxonMobil said that it was investing $3 billion over the next 5 years on projects to lower emissions, including 20 carbon capture projects around the world.”

False, Hyped Hope

• “Petra Nova looked at first to be a bright point for CCS before flaming out last week.”
• “On paper, carbon capture and storage, or CCS, sounds like the solution to all our problems. If we could just suck the carbon dioxide emitted by burning fossil fuels and put it somewhere else, we could cut warming without shifting away from old methods of generating energy.”

Company Spin

• “‘What NRG always touted was that they were on time and on budget,’ Daniel Cohan, a professor of environmental engineering at Rice University, said. ‘The Trump administration flew in journalists from across Europe to show Petra Nova as an example of clean coal technology… It became the poster child of what carbon capture could do.’”

Unintended Consequences

• “In purporting to solve some fossil fuel problems, the project actually made some new ones. The CCS technology at Petra Nova required so much energy that NRG made an entirely separate natural gas power plant—the emissions of which were not offset by the Petra Nova technology—just to power the scrubber….”
• “While CCS technology can help cut down on other pollutants like sulfur and nitrogen, the Petra Nova technology only affected one of four coal units at NRG’s power plant.”

Ironies

• “… the carbon dioxide pulled from the plant’s emissions was actually used to make more fossil fuels. Part of NRG’s deal with the federal government for running Petra Nova was gaining permission to transport the carbon dioxide scrubbed from burning coal to a separate oil field, where it was injected underground to help release more oil.”
• “In a twist of fate, this oil was what ultimately killed Petra Nova. After the crash in oil prices at the start of the pandemic last spring, NRG took the CCS project offline, stating that the price of the oil it could get with the extracted carbon dioxide wasn’t worth the cost of actually doing the extracting.”

Glimmer of (False) Hope

• “Despite repeated technical problems and suspicions that NRG overestimated the amount of carbon dioxide the project actually pulled from burning coal, Petra Nova ultimately proved that you could get a CCS project of that size up and running.”
• “[Daniel] Cohan said Petra Nova’s legacy could be important for certain industries where use of fossil fuels is unavoidable, or give some hope for big new coal plants with long lifespans being built overseas while also helping to mitigate the health impacts of those plants.”