A top official at the U.S. Dept. of Energy says a planned $1-billion carbon-capture project on a large coal unit near Houston represents "a major milestone" in the DOE's effort to maintain coal-fired generation as a viable way to meet energy needs and carbon-emission regulations.
Christopher Smith, principal deputy assistant secretary for fossil energy at DOE, says the Petra Nova Carbon Capture Project at NRG Energy's 610-MW W.A. Parish Unit 8 is significant because it would be the first commercial scale, post-combustion project to be added to a U.S. coal unit and could help states and utilities comply with proposed carbon-dioxide goals.
The Parish project will use an amine-based process to remove 90% of the carbon dioxide (CO2) from diverted flue gases equivalent to a 240-MW portion of Unit 8. The project will be the largest of its type on an existing coal unit. A similar post-combustion, amine-based carbon capture project is under development at a coal unit at SaskPower's Boundary Dam power station in Saskatchewan, but that unit's capacity is only 110 MW.
The DOE says the technology, once completed and on line, is expected to capture about 1.4 million metric tons of CO2 annually from the coal-fired plant in Texas.
The captured CO2 will be compressed and delivered via a new pipeline to the mature West Ranch oil field in Jackson County, south of Houston. There, the CO2 would be used in enhanced oil recovery, significantly increase oil production and sequester the CO2. DOE is supporting the project via a $167-million Clean Coal Power Initiative grant.
NRG Energy Petra Nova Holdings co-owns the carbon-capture project with JX Nippon Oil & Gas Exploration Corp. Arun Banskota, president of NRG Energy, says the cost of the project will be offset by the revenue generated by increasing the oil output of the West Ranch oil field to more than 15,000 barrels a day from today's 500 barrels a day.
The West Ranch oil field is jointly owned by the NRG Energy-JX Nippon joint venture and Hilcorp Energy Co. The oil field currently is estimated to hold about 60 million barrels of oil recoverable from enhanced oil-recovery operations. At an average of $100 per barrel, the value of the recoverable oil would be about $6 billion.
Because of the enhanced oil-recovery element of the project, "the [carbon- capture] project is economic" and will not adversely affect the Parish coal unit's ability to generate low-cost power in the Electric Reliability Council of Texas' competitive power market, says Banskota. "That is the beauty of this project: We will be producing clean energy from a coal unit at a competitive price," he says.
The project will be constructed under a fixed-price contract by a consortium of Mitsubishi Heavy Industries Americas and TIC, also known as The Industrial Co. Preparations for a construction start in late 2014 are underway, with operation expected by late 2016.
About $7 million of the $167 million DOE grant already has been received by the project's co-developers for the initial design and engineering phase. Other financing elements include loans totaling $250 million, to be provided by the Japan Bank for International Cooperation and Mizuho Bank.
