Tamar Hallerman
GHG Monitor
05/18/12
A small electric utility is hoping to stimulate a new market surrounding carbon capture and utilization technologies with a recently proposed $10 million prize. Denver-based utility Tri-State Generation and Transmission Association is working with the X Prize Foundation to raise money for the Carbon X PRIZE, an inducement prize for breakthrough CO2 capture and utilization technologies that, if fully funded, promises utility-level demonstration work, $10 million in winnings and an ongoing development contract for the top entry. In an interview with GHG Monitor, Tri-State Senior Vice President for Business Strategy and R&D Jim Spiers said the goal of the prize is to ultimately spark a new industry surrounding CO2 capture and use. “At the end of the day, [the $10 million] wets the competitors’ appetites,” Spiers said. “The real game is creating a market that’s worth literally hundreds of millions to billions of dollars so that the competitors will be able to get a leg up. Instead of betting on a company or technology, we are betting on a portfolio of candidates.”
Spiers said Tri-State and the X Prize Foundation are in the process of garnering more corporate sponsors for the four-and-a-half-year competition, which in addition to the $10 million prize purse will likely cost $36 million to administer. “There’s a good deal of interest and we’re cautiously optimistic we’re going to raise the money,” Spiers said. However, he said there will be no start date set until the two reach their fundraising goals.
If the competition gets off the ground, Spiers said a board of experts will dwindle down the pool of candidate utilization technologies—which must work in tandem with systems that capture at least 80 percent of CO2 emissions—down to five finalist technologies that will be tested on a 1-4 MW pilot level at a Tri-State-owned coal plant in New Mexico before a winner is selected. Spiers said demonstrating the technology on a utility scale could unlock private investment for the technologies that may not have had the same marketing potential before in a far shorter timeline than most typical R&D schedules. “Inducement prizes tend to have major monumental breakthroughs that you don’t see in traditional R&D. It collapses the research and development cycle from decades to a single decade, if not shorter,” he said.
EOR to Be Exempt from Prize
Carbon capture and utilization has received significant attention from the Department of Energy’s Office of Fossil Energy over the last year, particularly since the Obama Administration nominated Chuck McConnell to be assistant secretary for Fossil Energy last summer. Fossil Energy has focused on developing the technology as a way to sweeten the deal financially for carbon capture and storage projects in the eyes of skeptics in Congress and state public utility commissioners. However, to date much of the focus has stayed on enhanced oil recovery, a mature process that has been used for decades by the oil industry with natural sources of CO2. Spiers said that EOR technologies will not be eligible for the Carbon X PRIZE and that the project’s board will instead focus on a relatively broad field of “radical breakthrough technologies” that utilize CO2 to produce sellable products like building materials, synthetic gasoline, biochemicals, plastics and fertilizers.
Spiers and Nick Eisenberger, the prize sponsorship lead for the project, said an inducement format is needed to develop the technology despite DOE’s recent push because there has been little movement on the non-EOR side of the utilization industry. “If you look at where the research money is going into right now, when it comes to utilization almost the entire discussion is around EOR, and there’s not a lot of focus or money going into other types of utilization,” Spiers said. “I think the current research space doesn’t seem to be pushing us in that direction, so an inducement prize is the best mechanism we’ve come up with that would help push us in the right direction.”
On its own, Tri-State has a lot to gain from making carbon capture and storage technology more economic. The utility’s coal fleet is comprised of newer and mid-life plants that are not yet near retirement but will likely be required to retrofit with pollution control technology like CCS if the Environmental Projection Agency moves forward on performance standards for existing generation as it has previously promised.
