Many carbon capture utilization and storage demonstration projects have been proposed over the years, but few have broken ground, and even fewer have come to fruition. However, lessons can be learned from even the shortest-lived effort, according to Howard Herzog, a senior research engineer at the Massachusetts Institute of Technology. In an extensive review of demonstration projects past and present Herzog determined that initiatives with long timelines and that depend too much on one source of funding do not do well.
Timeline issues have been a thorn in the side of many U.S. demonstration projects, such as FutureGen 2.0, Hydrogen Energy California, and most recently the Texas Clean Energy Project, all of which lost their federal funding because of an inability to meet spending deadlines. “That deadline on the money provided the coup de grâce for that project at the time when it ran out,” Herzog, speaking at the United States Energy Association, said of the FutureGen 2.0 project.
The funding timelines set for these projects were simply too short for complex programs. There are two clear answers to the problem. First, the timelines set by the funding programs could be extended. Second, the project timelines could be shortened.
Extending funding timelines raises a new set of issues, however, such as changes in administration. If a project is not complete when a new administration takes office continued government support may be uncertain.
Instead, Herzog suggested, projects themselves should have shorter timelines. “I think as we go forward I think short timelines are best,” he said. “If you have shorter [timelines] there some strategies you can use, you can do some smaller-scale projects. … What I’m saying is design the projects so you can have a shorter timeline.”
The FutureGen 2.0 project didn’t only fail because it couldn’t meet its spending deadline under the American Recovery and Reinvestment Act, but because it was entirely dependent on that funding, which totaled $1 billion, Herzog said. “Successful CCS power projects use multiple financing components. There are several projects that relied very heavily on government subsidies,” Herzog said. “Most of the successful projects got anywhere between a quarter of a million to maybe $400 million in direct subsidies. These other projects were trying to get much more.”
Two projects based in the U.K. ran into a similar problem last year when the nation canceled its £1 billion CCS commercialization competition. The success of both projects had been dependent on that funding, so when it was longer available, the developers had little option but to pull the plug.
For all of the failed demonstration projects, however, there are success stories. Herzog noted SaskPower’s Boundary Dam project in Canada. The project was small enough to have a short timeline and did not rely too heavily on subsidies, Herzog said. The Boundary Dam power plant consists of three units; putting CCS on all three would have been complex and time-consuming. Instead, SaskPower did just one unit, Unit 3, and based on its performance will decide in the future if it wants to install CCS on the other two as well.
