Could Petra Nova, The Leading CCS Power Station, Provide A Model For Australia?

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Originally published on Quora.
By Simon Holmes à Court

tl;dr version: Petra Nova, the leading CCS power project globally, may be an impressive piece of engineering, but makes a tiny difference to the generator’s emissions and demonstrates that the technology is un-investable. It’s highly unlikely that we’ll see another CCS power station built within a decade, if ever, in either the US or Australia.

On 1 May 2017 the Australian Federal Minister for Energy and the Environment, Josh Frydenberg, posted a YouTube video (43 views at time of writing, 10 of which, I confess, were me) of his visit to the second ‘significant’ CCS power station in the world, the Petra Nova project at the WA Parish Generating Station in Texas. In the video Josh claimed that the US$1bn project was “helping to reduce the carbon footprint by some 40%.”

The Parish Power station is big: 2,462 MW of coal and 1,191 MW of gas generation which together emitted 15.4 million tonnes of carbon dioxide (Mt CO2e) in 2015. By comparison, the Loy Yang A and B coal fired power stations in Victoria have a combined capacity of 3210 MW and emitted 28.1 Mt CO2e in 2015-16, ie. the two plants are pretty similar in size but Loy Yang has a significantly higher climate impact as it burns a lower grade coal (lignite, also known as ‘brown coal’).

If NRG Energy, the owner of the project, has found a way to cut carbon emissions by 40%, ie. 6.2 Mt annually, for just US$1bn, then we need to get Australia’s Clean Energy Finance Corporation (CEFC) on to this technology quick sticks!

And that’s exactly what Josh is trying to make happen with his announcement on Tuesday 30 May 2017 that the Turnbull Government will seek to convince the Senate that the CEFC should provide taxpayer funded loans to CCS projects.

Let’s dig deeper.

The Parish station has 10 generating units, only one of which has been upgraded with carbon capture, Unit 8. Of the 610 MW unit’s exhaust, 40% is diverted into a ‘post-combustion capture’ (PCC) system designed to capture 90% of the CO2 in that stream. The facility, commissioned in January 2017, is gearing up to capture 1.4 Mt per annum (Mtpa).

Unfortunately, it gets worse.

A parasitic nature

Carbon capture in coal fired power stations is an energy intensive process. The world’s first commercial scale plant, SaskPower’s Boundary Dam power station in Canada — which after 2.5 years of operation is only just now getting close to its design capacity of 1 Mtpa or 18% of the plant’s 5.7 Mtpa emissions — requires around 25% of the plant’s capacity be diverted back into the plant to power the capture and compression systems.

In the case of Petra Nova, NRG built a 75MW gas fired power station next to the facility to generate the electricity and steam needed to run the CCS process. The CCS process is projected to consume 45MW of so called parasitic load and result in an additional 446,000 tons of CO2 emissions annually — reducing the net CO2 sequestered to 0.95 Mtpa, which represents just 6.2% of the Parish plant’s 2015 emissions.

For all the hype, you’d be forgiven for thinking that there are hundreds of CCS power plants operating around the world and that Australia is coming late to the party.

In fact, the two plants mentioned above are the only commercial scale CCS/coal plants in operation globally.

CCS advocates are making a lot of noise about the “17 large-scale, commercially proven CCS facilities operating around the world”. CCS is a suite of technologies that can be applied to many processes. Only two of the 17 projects are coal-fired power plants. Examining the claims of “commercially proven” is beyond the scope of this article.

The mess in Mississippi

The industry would prefer that you didn’t know about the only significant CCS/coal plant under construction, the Kemper County Energy Facility in Mississippi. Kemper is more than three years past its May 2014 expected completion date — the date has been set back 10 times over the past 18 months alone — and, much to the chagrin of owner Southern Company’s shareholders and Mississippi electricity consumers, the total price tag is now more than US$5.7bn over the original estimate of $1.8bn.

After more than 10 years and $7.5bn, Kemper’s owners have confessed that the small (528 MW net) plant is not currently viable and would lose less money if run on natural gas instead. Once the plant is finally certified complete, it will still require a series of modifications that could could span 18 to 24 months and cost $164 million. Expensive to build, and expensive to run: in February 2013 the plant’s owner announced that the operating and maintenance costs for the plant’s first five years of operation would increase from $258m to more than $1bn.

During the commissioning phase the Kemper plant is running on natural gas instead of coal — several commentators in the power sector have raised the possibility that this may continue indefinitely.

Using pollution to make more pollution

All three CCS power projects are designed to capture and compress part of their CO2 emissions and direct the majority towards Enhanced Oil Recovery (EOR) projects. In the process, CO2 is injected into otherwise unproductive oil wells. The CO2 forms an emulsion with the previously unreachable oil and forces it to the surface where most of the CO2 is separated and reinjected back into the oil field.

Putting aside the somewhat Pythonesque proposition that CO2 being put underground to avoid warming the planet is being used to extract oil which will be burnt thereby warming the planet, it turns out the ‘sequestration’ part of the CCS process is itself compromised by EOR. Canadian research reports that for EOR in the Weyburn Field, where much of Boundary Dam’s CO2 will end up, only 70% is expected to remain underground, with the remainder escaping back into atmosphere.

Insignificant, uncommercial and unwanted

Given these two degrading factors — high ‘parasitic’ energy demand for the capture process and significant carbon leakage in the storage component — the actual reduction of emissions from the Parish power station from NRG’s US$1bn investment is probably closer to 4.5%. Somewhat less than Frydenberg’s 40%.

NRG’s CEO has claimed that the Petra Nova CCS project “made both strategic and economic sense at $75 to $100 a barrel” and that “obviously [with West Texas Crude selling for less than US$50 a barrel], it does not currently make economic sense.”

Given that US gas and renewables both halved in cost during the eight years it took to deliver the project, it’s no surprise that NRG has no current plans to invest in any more CCS.

Saskpower, owners of Boundary Dam, have no stated plans for more CCS, and the earnings calls of the Southern Company, owners of the Kemper Project, make it clear that Southern’s C-suite wishes they’d never heard of the technology.

No other CCS projects are on the drawing board in the US (or Canada or Australia for that matter), so there’ll be nothing more delivered there this decade. And with the Trump administration cutting CCS funding by 85% (both Petra Nova and Kemper received significant grants) nobody expects another CCS plant in the US before 2030 either. By that time the Parish Station will be 53 years old and in line for a gold watch.

Turning our thoughts back to Australia, if we wanted to capture all of the emissions of Loy Yang A and B in Victoria, we’d need a plant 30 times bigger than Petra Nova. With currency and Australian labour rates, but allowing for some significant economies of scale and ‘learnings’, that could cost AUD$30–40bn. To put that number in context, it’s 150 times bigger than the largest loan made by the CEFC to date.

We’ve been here before

In 2006 Australia embarked on a project to build a CCS power station in Central Queensland called ZeroGen. Belying its name, the project was to expected to capture 65% of its CO2 emissions, and at 390MW net, would have been Australia’s smallest coal power station by a country mile.

The central Queensland project received $188m in grants — $102.5m from the Queensland Government, $47m from Coal21 (ie. funds diverted from Queesland coal royalties) and $38.5m from the Federal Clean Energy Initiative. A Brisbane Times article from March 2008 breathlessly proclaimed that the full-scale plant was to come on line in 2017 (this year!) and:

ZeroGen CEO Anthony Tarr said the full cost of the power plant project will be $1.7 billion – $500 million more than originally planned.

Originally estimated to cost at $1.2bn, detailed engineering studies yielded an revised estimate of $6.9bn. The project collapsed in 2011, taking with it hundreds of millions of public funding. Thank goodness taxpayers lost only $188m — Queensland came awfully close to having its own Kemper project.

Back to the Texas CCS project that Josh Frydenberg is so excited about. No doubt this expensive demonstration plant is an amazing feat of engineering. If we can put aside the fact that this exemplary CCS power project is helping the oil sector increase CO2 emissions, at best the project is making a very modest difference to the power station’s emissions.

Technically, it’s interesting. Economically, it’s a dog.

nb. Frydenberg’s office has been advised of this massive overstatement and given the opportunity to correct the record.

nb. CCS as a technology has a lot of potential for reducing emissions from industrial processes, such as cement and steel manufacture and natural gas processing. It’s not the technology that’s a dog, it’s the application to power stations.

CCS is one arm of ‘clean coal’. For an analysis of the other arm, HELE, please see my answer to How clean are Australia’s ‘Clean Coal’ Power stations?

Reprinted with permission.

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