Abby L. Harvey
GHG Monitor
1/16/2015
The eventual retrofit of all three of NRG Energy’s Gulf Coast coal plants with carbon capture and storage technology is a possibility, NRG President and CEO David Crane said during an investors event this week. While Crane made clear that he was not making a commitment to do so, he explained that the location of the plants near depleted oil wells, well suited for enhanced oil recovery, and the likely potential of a carbon constrained future, made the estimated cost of the retrofits more or less acceptable. “We think that we could do that entire thing for a total capital cost of $3.5 billion, which after you think equity and debt, that’s about a billion dollars of equity, which obviously is a lot of money, and we’re not here to say that we’re making a commitment to invest a billion dollars to capture all the carbon from our coal plants in the gulf region, but what I would say is for an $11 billion equity company, $1 billion dollars to capture all the carbon, which is the number that we might do over five years, 10 years, 15 years, 20 years, it brings it within the realm of reason,” Crane said.
Speaking later during the event, John Ragan, President of NRG’s Carbon 360 program, said that in the future, he envisions all three of the coal plants in the region to be running with CCS. “I think we’ll have all of our coal plants running in the Gulf Coast and instead of emitting a significant amount of carbon into the air, we’ll be capturing that and putting it underground. I think we’ll be generating 50 to 100,000 barrels a day of oil, and looking to expand in other directions,” Ragan said.
Currently, the retrofit of one of NRG’s three gulf coast plants is underway. The Petra Nova project, which Ragan said is on track to be completed on time and on budget, will capture approximately 1.6 million tons of CO2 annually from an approximately 240 megawatt (MW) slipstream of flue gas from W.A. Parish Unit 8, according to an NRG release. This equates to a 90 percent capture rate. The project stands to be the world’s largest post-combustion carbon capture facility installed on an existing coal plant. The CO2 captured will be transported roughly 80 miles via pipeline to the West Ranch oil field, which NRG has purchased a stake in. There it is expected that the CO2, which will be used for enhanced oil recovery, will enable the procurement of approximately 60 million barrels of oil.
EOR Integral CCS in the Gulf
Enhanced oil recovery is a large factor in the NRG vision for the future of their Gulf Coast fleet. Both executives noted that the location of the plants near oil fields is integral to successfully launching CCS. “When people look at our portfolio and they look at our carbon emissions and our coal fired plants, and they say ‘Boy, you know, I don’t know how this company is going to survive. If you believe that it’s going to be a carbon constrained world, as we actually do, how can this company get by, emitting as much carbon as it does?,’” Crane said. “Five-thousand-six-hundred megawatts is the number of coal fired megawatts we have in the Gulf Coast region. That’s important … because all three of our coal plants in the Gulf Coast region sit near secondary oil fields, where carbon capture related enhanced oil recovery is a distinct possibility.”
Ragan noted that not only are the oil fields close, they also hold a significant amount of residual oil. “We’re blessed with three very large coal fired generation plants. They’re young, they’re efficient, for the most part they have all the environmental retrofits they need on them and we have these huge oil fields, we have 7 billion barrels of oil that we think can be captured using enhanced oil recovery, using CO2,” he said.
Moving forward, the company plans to continue investments in CCS based on a belief that societal pressures and government mandates will lead to a carbon constrained world. If coal is to remain a part of the nation’s energy mix, CCS is going to be imperative and NRG intends to be proactive, the executives said. “We believe that coal should be part of the fuel mix for the American economy going forward. We want our coal plant to survive. If you believe it’s going to be a carbon constrained world, capturing the carbon and putting the carbon to good use, I think is an absolutely fundamental part of our core strategy of our company,” Crane said.
