Carbon capture and sequestration (CCS) is the great hope of the fossil fuel industry. What if, instead of figuring out more efficient wind or solar energy we could just cleanup our existing addiction to coal? The problem is that capturing carbon coming out of coal plants is expensive — 1 to 5 cents per kilowatt-hour more expensive — and at this point, experimental, too. Here’s a breakdown of the CCS scene in terms of technology, startups, utilities, and investors all making plays in this sector.
What is carbon capture and sequestration?
There are two separate parts to CCS – the “capturing” process whereby carbon emissions are prevented from being released into the air, and the “sequestration” or “storage” of the captured carbon. “Capturing” carbon means separating out the carbon dioxide from all of the other gases and particulates often found in fossil fuel exhaust. Once you’ve gotten a relatively pure carbon stream you’ve got to find somewhere to store it, “permanently.” This is the type of “permanent” we talk about when we look for places to store toxic waste.
What carbon capture technologies exist?
The biggest difficulty in carbon capture is getting a pure carbon stream. In traditional coal power plants the exhaust is full of other toxic oxides that make it difficult to safely capture and sequester carbon. There are three ways to capture carbon:
- Post-Combustion carbon capture attempts to capture CO2 after a fuel has already been burned. This includes the carbon scrubbers systems and could potentially be applied to all existing power plants.
- Pre-Combustion carbon capture is part of what is being pushed as “clean coal.” Some proposed new coal power plants are Integrated Gasification Combined Cycle plants (IGCC) which uses pre-combustion carbon capture. The idea of a IGCC plant involves oxidizing the fuel in a gasifier before combustion. This process produces “syngas” which is made of carbon oxides and hydrogen. The resulting carbon emissions can be pulled off in a relatively pure stream while the hydrogen is burned as fuel.
Most newly proposed coal plants from power utilities all over the country are IGCC proposals hoping to preempt emission restrictions by creating cleaner, purer effluent streams. However, even these are having difficulty getting approval or proving profitable.
- Oxyfuel Combustion burns fossil fuels in pure oxygen as opposed to open air. Flue gases are recirculated through the combustion chamber to cool the reaction. The resulting emission stream is almost pure CO2 and water vapor. The water vapor can be separated by condensation leaving just the CO2 to be captured.
What carbon sequestration technologies exist?
- Geologic sequestration is the more popular method. It involves injecting carbon back into the fossil reserves from which is was mined, pumped, and piped. Often carbon gases are injected into oil and gas fields to increase fuel yields, called “enhanced oil recovery” (EOR). Research is being conducted in injecting CO2 into gas and oil reservoirs, coal bed methane recovery, and saline formation sequestration.
- Terrestrial sequestration looks to capitalize on the fact that the global biosphere absorbs nearly 2 billion tons of CO2 a year. The DoE is focusing efforts in maximizing the carbon uptake of a number of ecosystems including forests, croplands (both agricultural and biomass fuels), deserts, and wetlands. Far more experimental and less concentrated, terrestrial sequestration is unlikely to be an easy way to increase biosphere carbon uptake. Unless, of course, we stop destroying the biosphere.
- GreatPoint Energy – Their main product is natural gas derived from coal called “bluegas.” Using a chemical catalyst to break down low-grade, and low cost, carbon fuels (tar sands, petroleum coke, etc.) in a process called “catalytic coal methanation” GreatPoint produces pipeline grade methane. The resulting emission stream is nearly all CO2 that GreatPoint recommends can be used in EOR operations. GreatPoint has raised $137 million in three rounds of funding and have announced a pilot plant and R&D program. Investors.
- PowerSpan – Maker of pollutant controls focusing on SOx and NOx, PowerSpan is working on CCS as part of its ECO2 program. ECO2 is an ammonia-based scrubber system that can be added to existing plants ad remove CO2 from flue gases after other pollutants have been scrubbed. PowerSpan has plans for two different pilot programs, one in a partnership with BP Alternative Energy and the other with NRG Energy to prove the commercial scalability. Investors.
- Blue Source: A carbon middleman, Salt Lake City-based Blue Source orchestrates sales of carbon emissions along their gas pipelines between polluters and EOR projects. MIT Technology Review lauded them as financially innovative for coupling CCS with carbon offset sales.
- Skyonic: Skyonic’s “SkyMine process” is a post-combustion system that can be implemented in existing plants. The process reacts flue effluent with sodium hydroxide and pulls CO2 out to form sodium bicarbonate (“better-than-food-grade baking soda”) while also removing heavy metals and acid gases. The process uses energy in the form of waste heat from the plant. Oh, and it’s profitable since emitters can sell off the chemicals byproducts. Skyonic has installed a pilot project on a Luminant (formerly TXU) plant in Texas and are planning on installing a system on a large plant (500 MW) in 2009. Skyonics has raised $4.25 million in two rounds of funding, including investment from TXU.
- Calera: There are few details on this Silicon Valley startup, but the company was founded by Stanford earth sciences professor Brent Constantz and has received funding from Khosla Ventures. Calera looks to make cement, a carbon-intensive undertaking, by taking CO2 out of the atmosphere.
- GreenFuel Technologies: Looking to sell biomass to biofuel makers, GreenFuel plans to take CO2 from flues and use it to grow algae. The “emissions-to-biofuel” process pulls flue gases through an algal farm to grow the algae and released a performance summary in September. They have raised $18 million in Series B led by Polaris and are raising more funding now.
- First Reserve: An equity firm focused on energy based in Greenwich, Conn. raised $1 billion for Blue Source.
- Kleiner Perkins Caufield & Byers: GreatPoint Energy – co-led $30 million Series B
- Khosla Ventures: GreatPoint Energy – co-led $30 million Series B. Calera – cement maker uses atmospheric CO2.
- Sustainable Development Investments: GreatPoint Energy – co-led $100 million Series C
- Dow Chemical (DOW): GreatPoint Energy – co-led $100 million in Series C
- Draper Fisher Jurvetson: GreatPoint Energy – multi-round investor
- Advanced Technology Ventures – multi-round investor,led $7 million round for GreatPoint Energy
- OPEC recently announced it has created a $750 million fund to further research in CCS. Looking to secure a safe place for their fossil fuel reserves in the uncertain carbon-regulated future, OPEC is looking to “de-carbonize” fossil fuel.
Players Implementing the Technology:
Most utilities are looking into this technology, but here’s a working list of some that are leading the pack. (We’ll update this more throughout the day)
- NRG Energy (NRG): GreenFuel Technologies – testing algae bioreactor system on biofuels power plant.
PowerSpan – testing ammonia-based ECO2 system in 125 MW coal-fired plant.
- TXU: Since being sold about a year ago TXU has canceled 8 new coal power plants and have made CCS a high priority in their new designs.
- Archer Daniels Midland (ADM): The agricultural giant, unveiled plans to implement CCS technologies at its ethanol plant in Decatur, Ill. The $84.3 million project will receive $66.7 million from the DoE while ADM supplements the rest. The project will inject carbon dioxide into porous rock some 6,500 feet underground. Drilling is scheduled to being in spring of 2008 and sequestration is to follow in 2009. This is the fourth such project the DoE has financed.
How big is the market for carbon capture and sequestration?
The Intergovernmental Panel on Climate Change released a report on CCS which yielded the 1 to 5 cent price increase estimate. The graphic below, from The Oil Drum, converts that estimate into a cost per ton of CO2 captured. The market opportunity for CCS is in getting the cost of carbon capture and storage below carbon credit costs. The World Bank estimates the global carbon market to be worth $70 billion dollars. CCS’s value could exceed this if it allows polluters to reduce their emissions for less than carbon credit prices and then sell their CCS-created credits on the open market.
What is government doing about carbon sequestration?
The DoE announced its first three CCS projects in October 2007 and the fourth in December. The first three projects are being undertaken with separate members of the Carbon Sequestration Regional Partnerships, specifically the Plains, Southeast, and Southwest regions. The projects total $318 million, $197 million of which the DoE will fund. The projects will test the storage of 1 million or more tons of CO2 in deep reservoirs. President Bush kicked of the DoE’s CCS program in 2001 saying “We all believe technology offers great promise to significantly reduce [greenhouse gas] emissions — especially carbon capture, storage and sequestration technologies.”
- The Carbon Sequestration Leadership Forum (CSLF) is a voluntary climate initiative whose members, including 21 countries and the European commission, account for about 75 percent of man-made carbon emissions. The CSLF is designed to share and disseminate information and research in CCS. Formed in 2003, the CSLF has recognized 19 CCS projects, only 2 of which have been completed.
- There are seven Carbon Sequestration Regional Partnerships splitting up the country into seven regions. This network of state agencies, universities, and private companies is a sort of carbon contingency plan “[i]f it is determined that carbon sequestration must be implemented.” The program has three phases, the third of which, the “deployment phase,” is supposed to start rolling out large volume carbon storage tests this year.
- The FutureGen Initiative was announced in 2003 by President Bush as a “10-year demonstration project to create the world’s first coal-based, zero-emissions electricity and hydrogen power plant…” Part of the President’s plant to build a “hydrogen economy,” the FutureGen plant was expected to cost $1.5 billion. The plant’s site was just announced last month, but the DoE released a statement saying they have not yet approved this site and that projected cost overruns require a reassessment.
- The Carbon Sequestration Core Program includes all of the ongoing research the DoE is involved in permanent carbon capture and sequestration. There is separate research into carbon capture and carbon sequestration. Different sequestration methods include terrestrial sequestration (vegetative and soil versus geologic sequestration (oil, gas, and coal reserves). The DoE even runs a “Novel & Advanced Concepts” research arm that includes attempting to make carbon “icebergs” to sink into the ocean.