1 | Office of Fossil Energy fossil.energy.gov

Office of Fossil Energy

Status of CCUS in the United States

June 13, 2017

Jarad Daniels

Acting Deputy Assistant Secretary for Clean Coal and Carbon Management

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Price of Natural Gas a Key Factor in Projecting Future US Energy Mix

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Source: EIA Annual Energy Outlook 2017

High NG prices

Low NG prices

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Advanced Fossil Technology Systems

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Cross Cutting Research Materials, sensors, and advanced computer systems for future power plants and energy systems

Carbon Storage Safe, cost- effective, and permanent geologic storage of CO2 in depleted oil and gas fields and other formations

Carbon Capture R&D and scale-up technologies for capturing CO2 from new and existing industrial and power-producing plants

Advanced Energy Systems Technologies that greatly improve plant efficiencies, reduce costs, increase plant availability, and maintain the highest environmental standards

Existing Major Demonstrations First Generation fossil energy technology systems built to validate first-of-a-kind fully integrated projects at full scale for the power and industrial sectors

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U.S. DOE CCUS Major Demonstration Projects

CCPI

ICCS

Southern Company Kemper County IGCC Project

Transport Gasifier w/ Carbon Capture ~$7 B – Total; $407M – DOE

EOR – ~3.0 MM TPY; In-Service Expected: 2017

Petra Nova W.A. Parish Generating Station

Post Combustion CO2 Capture $1B – Total; $190M – DOE

EOR – ~1.4 MM TPY; Started Operations: January 10, 2017

Air Products and Chemicals, Inc. CO2 Capture from Steam Methane Reformers

EOR in Eastern TX Oilfields

$431M – Total; $284M – DOE

Over 3.5 MMT already stored as of March 2017!

Started Operations: March 2013;

Archer Daniels Midland CO2 Capture from Ethanol Plant

CO2 Stored in Saline Reservoir

$208M – Total; $141M – DOE

SALINE– ~0.9 MM TPY;

Started Operations: April 7, 2017

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Petra Nova – NRG Energy’s W.A. Parish CCPI-3 Advanced Post Combustion CO2 Capture

• Project at NRG’s W.A. Parish power plant near Houston Texas

• Retrofit of Existing Coal Plant (Post-Combustion CO2 capture) to process flue gas from W.A. Parish unit 8

• World’s largest post-combustion CO2 capture system

• Project was completed On-Budget and On-Schedule

• Delivering and permanently storing around 1.4 million metric tons of CO2 per year for EOR.

• 240 MWe slipstream – scaled up to improve project economics

• Fuel: PRB sub-bituminous coal

• 90% CO2 capture from supplied flue gas (KM CDR Process®)

• Technology applicable to retrofit of existing coal power plants

• EOR at the Hilcorp West Ranch oil field.

• Total Project Cost: ~$1 billion (DOE Cost Share: $190 MM)

– NRG Equity - $300 million

– JX Nippon Equity – $300 million

– JBIC Project Financing - $250 million

– MHI – Technology Provider

Key Dates: • Project Awarded: May 2010

• Air Permit: December 2012

• NEPA Record of Decision: May 2013

• Financial Close: July 2014

• Complete Construction: December 2016

• Project Construction Completed On-Budget and On-Schedule.

• Started Operations: January 10, 2017

• Project Ribbon Cutting Ceremony Held April 13, 2017

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Southern Company Services, Inc. CCPI-2 Kemper County Advanced IGCC with CO2 Capture

Key Dates:

Project Awarded: Jan. 30, 2006

Project moved to MS: Dec. 5, 2008

NEPA Record of Decision: Aug. 19, 2010

Initiate excavation work: Sept. 27, 2010

CC operation on Nat Gas: August 2014

First Syngas production initiated: July 14, 2016

Commercial Operation expected soon

• Mississippi Power’s New Built Coal Plant

• Located In Kemper County, MS

• First Base Load Unit Built in 30 years and Located Away from the Coast after Hurricane Katrina

• Mississippi Power is a PSC Regulated Utility

• Part of Kemper Costs are Subject to PSC Rate Recovery

• Generation: 582 MWe (net) with duct firing

• 2 TRIGTM gasifiers developed by Southern Co. and KBR

• Fuel: Local Mississippi Lignite

• 67+% CO2 capture (Selexol® process)

• ~3,000,000 metric tons CO2/year

• EOR: Denbury Onshore LLC

• Total estimated project cost: ~$7B

• DOE Cost Share: $407MM

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Archer Daniels Midland Company ICCS Area 1 CO2 Capture from Biofuel Plant

• CCS project built and operated by Archer Daniels Midland (ADM) at their existing biofuel plant

• located in Decatur, IL

• CO2 is a direct by-product from production of fuel-grade ethanol via anaerobic fermentation

• Up to 90% CO2 capture (with >99% CO2 purity), dehydration (via tri-ethylene glycol) & compression

• ~900,000 tonnes CO2 /year captured and stored

• CO2 Sequestration in Mt. Simon Sandstone deep saline formation.

• Will be the first one to use the new EPA UIC Class VI well permit for CO2 capture.

• Total Project Cost: $208 MM.

• DOE Cost Share: $141 MM (68%)

Key Dates:

FEED Completed: April 2011

Construction started: May 2011

Two monitoring wells drilled: Nov. 2012

UIC Class VI Injection Well Permit: Sept. 2014;

Injection well drilled and completed: Sept. 2015

Construction complete Apr. 2016

Started Commercial Operations: April 7, 2017

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Air Products & Chemicals, Inc. ICCS Area 1 Steam Methane Reforming with CO2 Capture

• Built and operated by Air Products and Chemicals Inc. and located at Valero Oil Refinery in Port Arthur, TX.

• CO2 capture added to 2 existing Steam-Methane Reformers (SMRs) used for Hydrogen Production

• Project achieves 90+% CO2 capture sing Vacuum Swing Adsorption (VSA) for CO2 separation

• Capturing ~925,000 tonnes CO2/year

• ~30 MWe cogeneration unit makeup steam to SMRs and power to VSA and Compressors

• CO2 to Denbury “Green” pipeline for EOR in Texas at the West Hastings oil field

• Total Project cost: $431 MM;

• DOE Share: $284 MM (66%)

• Project was executed on time and under budget

• Has operated >100% of design when needed

Key Dates:

Phase 2 Awarded: June 15, 2010

Construction started: Aug. 2011

Started Operations: March 2013

1 MM Tons of CO2 delivered Apr 2014

2 MM Tons of CO2 delivered May 2015

3 MM Tons of CO2 delivered May 2016

3.5 MM Tons of CO2 delivered March 2017

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Carbon Capture R&D Pathways

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Carbon Capture Small Pilot Projects – up to 1.5 MWe

Decrease capital and energy costs

2nd Generation Technologies

• 10 post combustion systems

• Low degradation rates

• High permeance/reaction/flux

• ~$40/tonne

Transformational Systems

• Membrane Systems for post combustion

• Solvent and Sorbent Systems for pre-combustion

• ~$30/tonne

Technologies ready for large scale testing

• 10 to 25MWe

• $60M for greenfield units

• 5000+ hours of testing for commercial viability

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Post Combustion Capture National Carbon Capture Center - Benefits to Program

• Operated by Southern Co Services

• Hosted at Plant Gaston, AL

• DOE funds 80% of operations

• Over 91,000 test hours

• Technologies from U.S. and six other countries since 2008 founding of NCCC

• More than 40 carbon capture technologies tested • 20+ Post combustion

• 20+ Pre-combustion

• Dedicated staff of plant engineers

• Standard design guidelines

• Small and Large Solvent Test Units

• 90+% of US developers opt for NCCC

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Example of CO2 Capture Development Timeline Membrane Technology - Historical

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Accelerating the Rate of RD&D - Transformational

• Partnership between national labs, academia, and industry

• Accelerate deployment by 50% in TRL 2-5 range

• Parallel paths for materials discovery – synthesis – process design

• Leverage advanced computing

• Robotics for rapid synthesis and analytical capabilities

“Transformational Technology Development”

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The Problem

New high temperature structural alloy development and commercialization is time consuming and expensive: >10 years and multi-million dollars for a single alloy

The Vision

• Reduce cycle time, cost and failure rate of advanced FE materials development by at least a factor of 2X by:

o Integrated High Performance Computational materials design and long term predictive behavior tools coupled with smarter, more efficient experimental techniques and

o Data analytics to leverage existing data and knowledge to its maximum possible extent.

Developing Advanced Materials

Friction stir welding of ¼” thick dispersion strengthened Sandvik APMT plate

Advanced FE systems - Extreme environments - Long service life (>100,000 h) - Large components

Opportunity - New Phase Stable Alloys - Manufacturing of Alloys, Materials Systems & Components - Build upon DOE-FE successes with Integrated Computational Materials Engineering (ICME) environments

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Transformative R&D: Supercritical Carbon Dioxide (sCO2)

Supercritical CO2:

A highly efficient working fluid

Cleaner, more

affordable electricity

Diverse fuel/

heat sources

Higher thermal efficiencies,

smaller physical footprint, and

lower capital costs (than conventional steam-based

power generation)

COAL

SOLAR

NUCLEAR

NATURAL

GAS

WASTE

MFG.

HEAT

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Industrial Capture

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Storage Infrastructure Small Scale to Large Scale

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Completed 18 injection

projects (1.35 million metric

tonnes injected

RCSP Development Phase Large-Scale

Field Projects

RCSP Validation

Phase Field Projects

Over 10 million metric tonnes stored

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Storage Infrastructure – Addressing Large Scale Challenges

Brine Extraction Storage Tests (BEST)

Regional Carbon Sequestration Partnerships

Offshore Storage Carbon SAFE

Unconventional EOR

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Advanced Storage R&D Risk Assessment, MVAA, Well Integrity & Mitigation, Predicting Plume & Pressure Impacts

• Advanced simulation tools for coupled processes – Flow, mechanical deformation/failure, geochemistry in complex, fractured reservoirs and caprock

• Measurement tools to ensure reservoir conformance

• Measuring and modeling geomechanical properties and coupled processes in reservoir, caprock and faults

• Reduce risk of induced seismic events monitoring and forecasting capabilities

• Monitoring and mitigating wellbore leakage: biomineralization, pH-triggered polymers, nanocomposites, mesoporous nanoparticles

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CO2 Infrastructure Opportunities

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A regional CO2 pipeline network will require collaboration between private companies, the investment community, State agencies, Federal regulators, and other interested stakeholders.

CO2 pipeline network showing oil and gas fields. Pipeline data

from Energy Velocity, saline reservoir and oil and gas field data

from NATCARB.

Source: NETL

• CCUS is capital intensive, faces policy and market uncertainties, and requires a long-term commitment, all of which present a financial burden and risk for CCUS project developers.

• Regulatory, policy and financial certainty essential for industry

• EOR operations in the United States represent a commercially demonstrated and Federally-recognized form of geologic storage that could provide a market pull for the deployment of CCUS technology.

• The United States will need to expand the existing CO2 pipeline network to realize the full potential for domestic oil production using CO2 -EOR.

Source: Siting and Regulating Carbon Capture, Utilization and Storage Infrastructure WORKSHOP REPORT

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Integrated System Approach

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The Big Questions

Opportunity to make existing fleet more efficient and competitive? • What technologies?

• Added Revenue (REEs extraction, CO2 Utilization, EOR)

• High Performance Computing (advanced modeling and subsurface characterization)

• How fast can they be developed?

• What market/regulatory dynamics?

What would it take for a U.S. new-build plant?

Impact of Renewables and Natural Gas • How much gas is there?

• Impact of LNG exports on pricing

• Expected growth curves for solar and wind

Project Funding • Finance-ability (debt) for large Long-term projects

• New funding models?

• Policy support?

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Office of Fossil Energy

Questions?