The U.S. Department of Energy said it has made its final decision to provide cost-shared funding to NRG Energy (NYSE: NRG) for the W.A. Parish Post-Combustion CO2 Capture and Sequestration Project.
The DOE funding will come out of the agency’s Clean Coal Power Initiative Program. DOE prepared an environmental impact statement (EIS) to evaluate the potential environmental impacts associated with DOE’s proposed action of providing financial assistance for the Parish PCCS Project. A final record of decision approving the EIS was signed on May 8.
DOE has decided to implement the proposed action and will provide limited financial assistance through a cooperative agreement with NRG for the Parish PCCS Project, which will include a new post-combustion CO2 capture and compression system that would be added to Unit 8 of the existing W.A. Parish plant. The captured CO2 would be piped to the West Ranch oil field for use in enhanced oil recovery.
DOE would provide $167m in cost-shared financial assistance to NRG. The funding would be used for project design and development, procurement of capital equipment, construction, and CO2 monitoring during the 35-month demonstration period of the integrated CO2 capture and compression system.
The capture facility would use an advanced amine-based CO2 absorption technology to capture at least 90% of the CO2 from a 250-MW equivalent portion of the flue gas exhaust from Unit 8 at W.A. Parish. The project would capture about 1.6 million tons of CO2 per year from the plant exhaust. The captured CO2 would be compressed and transported via an approximately 81-mile-long, 12-inch-diameter underground pipeline to the existing West Ranch oil field in Jackson County, Texas. The CO2 would be used for enhanced oil recovery (EOR) and ultimately sequestered in geologic formations about 5,000 to 6,300 feet below ground surface.
Said NRG’s May 7 Form 10-Q report about this project: “The Company is continuing construction of the 75 MW peaking unit at W.A. Parish and anticipates a commercial operations date during the second quarter of 2013. The unit is expected to be retrofitted for use as a cogeneration facility to provide steam and power to operate the CCUS, which is being partially funded by a grant from the US DOE. Construction of the CCUS is intended to allow NRG, through its wholly owned subsidiary Petra Nova LLC, or Petra Nova, to utilize the captured CO2 in enhanced oil recovery operations in oil fields on the Texas Gulf Coast. In December of 2012, the final air permit was issued by the Texas Commission on Environmental Quality for the full carbon capture system. The final Environmental Impact Statement is approved and the Record of Decision is expected to be issued by the U.S. DOE in May 2013. Construction of the CCUS is subject to receipt of appropriate financing and negotiation of material contracts.”
CO2-capture technologies like this, which many parties don’t think will be commercially viable until next decade, are considered a key to the survival of coal-fired power in the long-term U.S. energy picture.