Clean energy journalism for a cooler tomorrow

EPA rules may push power plants to capture carbon. Is the tech ready?

The Biden administration is poised to propose new regulations for coal- and gas-burning power plants, which could breathe new life into a long-beleaguered technology.
By Maria Gallucci

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A white cloud of smoke rises from a tall smokestack
(Anne Nygard/Unsplash)

America’s gas- and coal-burning power plants generate some 60 percent of the nation’s electricity every year, spewing billions of tons of planet-warming gases in the process. Even as wind and solar energy see record deployment, the power sector remains the country’s second-biggest source of greenhouse gas emissions after transportation.

In the coming weeks, the Biden administration is reportedly set to unveil its plan for dramatically reducing carbon dioxide pollution from existing and future power plants by 2040.

The U.S. Environmental Protection Agency is expected to propose stringent pollution limits that leave operators with a few key ways to comply: by retiring fossil-fuel assets and building renewables, by replacing gas with zero-carbon fuels like green hydrogen — or by installing large, expensive systems that capture carbon dioxide directly from plants’ smokestacks.

If the proposed rules go into effect, experts say they expect that latter approach — carbon capture and storage, or CCS — to be the most appealing lever many plant operators have to pull.

Carbon-capturing technology has been tried and tested at U.S. power plants in recent decades, with very little success. None of the country’s 3,400 commercial power-plant units currently use carbon-capture systems in significant ways, despite years of research and billions of dollars in government and utility funding. Several high-profile initiatives have been canceled or shelved after companies encountered major setbacks and soaring costs.

Yet policy and technology experts say that carbon capture and storage may now have a better shot at succeeding due to several recent developments. Methods for stripping CO2 from a plant’s flue streams are maturing. And the surge of federal investment under the Inflation Reduction Act will make it more affordable to operate such systems. If forced to rein in their emissions, operators may find installing carbon capture to be the most viable option for keeping baseload fossil-fuel plants compliant and functional.

The only reason [carbon capture] hasn’t been deployed more widely is simply because you’re asking businesses to penalize their own operations,” said Ahmed Abdulla, an assistant professor of mechanical and aerospace engineering at Carleton University in Ottawa, Canada. And nobody is going to do that unless you have hard constraints” on emissions, like the ones EPA may soon propose, he told Canary Media.

A large metal cylinder is surrounded by an array of blue and silver pipes
Carbon-capturing equipment strips CO2 from flue streams at a test facility in Scotland. (Carbon Clean)

Abdulla was the lead author on a 2021 paper that found that roughly 80 percent of 149 projects worldwide seeking to commercialize carbon capture and storage have ended in failure. To understand why, Abdulla and his colleagues analyzed the experiences of 39 U.S. projects in particular. They found that the main reason large projects floundered is that they cost huge amounts of money to build, which made them more vulnerable to skittish lenders, impatient investors and other financial risks.

Along with sky-high capital costs, uncertainty about the demand for captured CO2 has also historically hampered projects.

Many of the demonstrations that have shut down [in the U.S.] have been a technical success, in that they met the technical milestones, but a commercial failure,” said Noah Deich, deputy assistant secretary for the Office of Carbon Management at the U.S. Department of Energy. The market just wasn’t there.”

However, When you change the market context considerably, you actually do have a good enough track record to say these are projects that work and will work if the proper regulatory framework is in place,” he said.

The most notable example of a market-driven setback is Petra Nova, a 240-megawatt coal-fired facility at NRG Energy’s W.A. Parish Generating Station near Houston. The project became America’s first and only power plant to use carbon capture when it began operations in early 2017. The system was designed to strip away about 90 percent of the CO2 emitted from the flue gas. The CO2 was then injected into aging oil fields to boost crude production in a process called enhanced oil recovery.”

Three years later, however, NRG said it mothballed the project due to falling oil prices, which diminished the financial incentive to run its expensive, energy-intensive equipment.

The Petra Nova facility near Houston may resume operation after a three-year closure. (EIA)

Other high-profile initiatives have failed because they tried technologies beyond the more common approaches for point-source carbon capture. Take the $7.5 billion clean coal” project in Kemper County, Mississippi. The utility giant Southern Co. planned to use a novel process for gasifying lignite coal and then capturing the resulting carbon dioxide before the fuel is burned. The early-stage approach encountered hiccups along the way that, together with other serious issues, led Southern Co. to abandon its carbon-capture plans in 2017.

However, other sectors have widely demonstrated that post-combustion” technology is mature and commercially viable.

The most common method involves passing flue gases through an amine solvent to remove the CO2 molecule. Such systems are being deployed to capture carbon emissions from steel plants, ethanol refineries, fertilizer production facilities and gas-processing plants — with more than a dozen such projects in operation across the United States. The Petra Nova project, which is now undergoing repairs to restore operations, also uses post-combustion technology.

Even before the EPA revived federal efforts to restrict power-plant emissions, efforts to decarbonize heavy industries such as chemical, cement and steel manufacturing have driven unprecedented interest in carbon capture and storage. Investment in CCS hit a record high of $6.4 billion last year, more than double the amount for 2021, according to BloombergNEF.

Much of that momentum is thanks to the Inflation Reduction Act, which offers generous incentives for capturing and storing CO2. The 2022 law provides an $85 tax credit for every ton of CO2 that developers capture and sequester, 70 percent more than was previously offered. The 2021 infrastructure law includes another $10 billion for research, development and deployment of carbon-management” technologies, a category that includes point-source carbon capture from power plants and industrial facilities.

Startups and energy giants alike are seeking to take advantage of the new financial landscape. One such firm, London-based Carbon Clean, opened a U.S. headquarters in Houston last month and announced a significant North American expansion. The startup raised $150 million last year from Chevron and other investors to deploy its modular CO2-capturing units, which can fit inside a shipping container.

Arrays of blue and silver pipes surrounded metal equipment inside an industrial facility
One of Carbon Clean's modular CycloneCC units at Altrad Doosan’s Emissions Reduction Test Facility in Scotland. (Carbon Clean)

It allows us to build toward decarbonization, rather than forcing customers to build the biggest unit possible on the planet,” said Aniruddha Sharma, Carbon Clean’s co-founder and CEO. He said the company has deployed units at 49 operating sites around the world, which have cumulatively captured about 1.8 million metric tons of carbon dioxide. That’s roughly equivalent to the annual emissions of 4.5 gas-fired power plants, by EPA’s estimates.

Hulking power plants could likewise stand to benefit from expanded tax credits and ongoing technology innovation, said Rory Jacobson, a senior advisor for deployment at the DOE, who co-authored a new report outlining pathways to commercial liftoff” for carbon management.

We see that some of these carbon-capture technologies could very much be cost-effective today,” he said.

Still, despite the big-picture improvements, it remains to be seen whether power plant operators will ultimately decide to install such systems to comply with EPA regulations.

After all, the point of EPA’s forthcoming rules isn’t to force power plants to adopt carbon capture or any other technology or fuel source. For one, the agency doesn’t have the authority to do that under the Clean Air Act. However, the EPA can establish emissions limits based on a technology that’s been adequately demonstrated” and is considered to be affordable,” said David Doniger of the Natural Resources Defense Council.

The environmental group and others, like the Clean Air Task Force, say they believe carbon capture and storage can now meet those criteria. As a result, they argue, the Biden administration should set the bar high by requiring 90 percent emissions reduction for power plants — a level that’s purportedly possible to achieve using CCS.

Our position is that EPA should set the standard based on CCS,” Doniger said. But that doesn’t mean that plants would be required to use CCS.”

Some climate experts have even suggested that any proposed restrictions would not be intended to spur adoption of carbon-capture technology per se, but rather would act as a tax on coal and gas plants’ emissions — a costly technology addition that owners would have to adopt if they want to keep plants operating.

If they do build CO2-scrubbing systems, companies will still have to navigate other complex hurdles, such as figuring out how to transport the CO2, whether to inject it deep underground or sell it to manufacturers, and how to develop large-scale projects without causing harm to adjacent communities. Environmental-justice groups have warned that because facilities use more energy to run carbon-capture systems, they risk spewing more toxic air pollution in surrounding neighborhoods.

Some [companies] will decide they don’t have the land to install a new capture system, or they can’t get to a pipeline, or there’s public opposition,” Abdulla said. It’s not a result of technical immaturity. It’s a result of project execution.”

Maria Gallucci is a senior reporter at Canary Media. She covers emerging clean energy technologies and efforts to electrify transportation and decarbonize heavy industry.