At a Glance
Princeton researchers are exploring the ways retiring coal-fired power plants can be replaced by Allam-cycle natural gas power plants with CCUS (carbon capture, utilization and storage). With reasonable levels of government support, the researchers suggest that the resultant carbon dioxide (CO2 ) captured during the Allam cycle can be transported via pipelines to major saline aquifers and EOR (Enhanced Oil Recovery) hubs. Developing a viable pipeline infrastructure system will go a long way in creating a productive and efficient CCUS industry in the United States, which will ultimately help reduce CO2 emissions from fossil fuel combustion.
In 2018, Ph.D. student Ryan Edwards showed that the newly revised Section 45Q tax credit for CCUS was sufficient to incentivize pipeline construction to deliver CO2 captured from ethanol plants in the upper Midwest to the Permian Basin in West Texas for Enhanced Oil Recovery (EOR) (Edwards and Celia, 2018). Ethanol plants were chosen because they produce a pure stream of CO2 . This eliminates expensive gas separation when capturing CO2 . The low cost of carbon capture made the overall system economically viable. Because U.S. emissions from ethanol are only about 30 million tonnes of CO2 per year (Mt CO2 /yr), the underlying motivation of that work was to initiate pipeline construction necessary for a large-scale CCUS industry to develop. However, that work also showed that the revised 45Q tax credit was not enough to make capture of the much larger sources from traditional power plants economically viable.
The researchers are currently exploring which government policies would be required to make pipeline construction for the power sector economically viable. They are studying a specific proposed system where retiring coal-fired power plants in the United States are replaced by Allam-cycle natural gas plants, with the new plants built at the same locations and having the same power output. The researchers focus on the Ohio Valley and lower Mississippi Valley, extending westward into Texas. In that region, they identify 156 large coal-fired power generators collectively generating 100 GW of power.
They propose a main trunk line that will deliver captured CO2 from the proposed Allam-cycle power plants to the Illinois Basin for saline storage, to the Gulf Coast for either saline storage or EOR, and to West Texas for EOR. A map with the pipeline, storage locations, and power plant locations is shown in Figure 4.1.
In the analysis, pipelines are initially oversized to accommodate the portion of the 156 power generators with later retirement dates. In addition, because the Allam cycle is a new technology, the researchers apply a learning curve consistent with observed learning in related systems. Finally, they measure the cost for Allam-cycle CCUS as the incremental cost above the cost for a standard Natural Gas Combined Cycle (NGCC) power plant. Details of all calculations and assumptions can be found in Tao et al., (to be submitted).
The current 45Q tax credit does not provide sufficient economic incentive to allow a pipeline to be built for fossil-fuel power plants so additional government policy is required. A key result of the current work is that extension of the 45Q tax credit from 12 years to 20 years, coupled with an increase of about 80% in the amount of the tax credit (from a current maximum of 50 USD per tonne CO2 to $90/tCO2 ) would make the entire system economically viable. Under this scenario, all participating power plants find CO2 capture to be economically advantageous while pipeline operators make a sufficient return to finance the construction and operation of the pipeline network, with total pipeline construction cost being on the order of 10 billion USD.
The resulting network involves about 7,500 miles of pipeline and includes 40% of the current coal-fired power in the U.S. The proposed network can also connect into other future regional infrastructure networks to provide overall nationwide carbon management. Other policy options include creation of a regional management authority, similar to the Tennessee Valley Authority, to distribute costs among the power plants. That option reduces the cost penalty for early adopters, who experience first-of-a-kind costs while contributing to the learning curve, which reduces costs for later Allam cycle plants. This option allows for lower costs in the system but requires more government oversight. Overall, this analysis provides quantitative targets with associated policy options to incentivize power-sector CCUS in the United States.
Edwards, R.W.J., and M.A. Celia, 2018. Infrastructure to enable deployment of carbon capture, utilization, and storage in the United States. Proc Natl Acad Sci USA 115(38): E8815–E8824. (DOI: 10.1073/pnas.1806504115).
Szulczewski, M.L., C.W. MacMinn, H.J. Herzog, and R Juanes, 2012. Lifetime of carbon capture and storage as a climatechange mitigation technology. Proc Natl Acad Sci USA 109(14):5185–5189. (doi: 10.1073/pnas.1115347109).
Reports from Advanced Resources International, Inc. NETL Carbon Storage Atlas, Fifth Edition, 2015. (U.S. Department of Energy National Energy Technology Laboratory, Pittsburgh, PA).
Tao, Y, R.W.J. Edwards, D. Mauzerall, and M.A. Celia, 2021. Strategic CO2 infrastructure development to achieve lowcarbon electric power sector in the Midwestern and Southcentral United States, to be submitted.