State Releases Optimistic Report On Carbon Capture, Skeptics Say Too Optimistic

Sep 3, 2020

Job Impact Analysis by Year from DOE-funded report on CCUS in Wyoming. It predicts nearly 20 additional years of jobs from its scenarios versus Pacificorp's baseline plan.
Credit United States Department of Energy Office of Fossil Energy

The governor's office has released a report it requested from the U.S. Department of Energy last year that explores alternative scenarios to Pacificorp's plan to retire several coal plant units early and transition to a heavier focus on renewables. The report considers the impacts of instead retrofitting the plants with carbon capture technology.

"If you do all renewables, yes, you do slow the amount of carbon dioxide that is emitted, but you have done nothing to take carbon dioxide out of the atmosphere," said Gov. Mark Gordon, during a press conference.

Pacificorp's preferred portfolio, announced last October, would add 1,920 megawatts (MW) of wind capacity by 2024, 1,415 MW of solar energy and 354 MW of battery storage between 2024 and 2038 at existing plants. It would also retire several coal plant units early including in Wyoming counties.

The utility's decision prompted an investigation by the Wyoming Public Service Commission, which was backed financially by the Governor's office.

A public hearing in July offered groups an opportunity to question Pacificorp. Several who testified brought up carbon capture as a possibility for the utility to explore.

Now, a 76-page report gives an optimistic outlook on the economic and environmental benefits of incorporating carbon capture on nine coal plant units in the state.

In direct comparison to Pacificorp's Baseline Integrated Resource Plan (IRP) scenario, it finds retrofitting the utility's power plants would reduce carbon dioxide (CO2) emissions by an additional 37 percent, boost employment benefits up to five times higher, bring higher local and state revenue, and cause ratepayers to pay approximately ten percent less per month.

The governor's study contemplates two alternative scenarios to the utility's Baseline IRP scenario. The first considers the maximum amount of captured CO2 would be sold for enhanced oil recovery with the remainder stored in saline aquifers in the state. The second would exclusively store the captured CO2 in those aquifers.

Within both scenarios, the report assumes 90 percent of the carbon dioxide would be captured from the exhaust stream, that the coal units would retrofitted and start operations in 2026 to take advantage of the federal 45Q tax credits, that the retrofitted coal units would continue operations through 2055, and that the price of a barrel of oil would be $60 throughout that time. The minimum post-retrofit capacity factor for all units was assumed to be 85 percent throughout that time as well, a measure of how intensely a generator operates.

During the press conference, Dr. Holly Krutka, director of the University of Wyoming's School of Energy Resources, said the report didn't try to assume who would develop the projects and take advantage of the federal tax credits.

"The ability to be able to remove carbon dioxide can actually realign our strategy for making sure that Wyoming continues to produce electricity, consumers get to have low costs and good electricity supply that is reliable and dependable and do that in a way that is beneficial to the climate," said Gov. Mark Gordon, "that's what these studies are about."

The report's findings, though, were met with skepticism by some, with particularly attention on the assumptions being made.

"In an initial review, the report appears to have some significant limitations," said Spencer Hall, media relations with Pacificorp's Rocky Mountain Power. He said the company will continue to evaluate the study's calculations and conclusions.

Dennis Wamsted, an analyst with the Institute for Energy Economics and Financial Analysis, a pro-renewable think-tank, went a step further.

"It is a very high level, very optimistic, very unlikely to pan out, assessment of carbon capture in Wyoming," he said.

Wamsted said it's a problem that the economic impacts in the report assume the retrofitted coal plants would run until 2055, that enhanced oil recovery would enjoy $60 barrel of oil through that time, and that the coal plants would run at 85 percent capacity throughout that time as well.

"The combination just makes me think that they decided these are the numbers, we have to make this try to pencil out. So, those are the numbers we're going to put in there," he said.

Jason Begger, deputy director of the Wyoming Energy Authority, said the capacity factor was determined based on operational data from the Texas-facility Petra Nova, a coal-fired power plant that ran with carbon capture until this year when it was shut down due to low oil prices.

The report finds that seven of the nine units currently run below 85 percent capacity, but Begger said that would necessarily increase.

"You probably would run that at a much higher capacity than just a regular coal fired power plant, and then also need that higher capacity factor to gain the operational efficiencies necessary at that level," he said.

As for the $60 barrel of oil, Scott Quillinan, director of research at U.W.'s School of Energy Resources, said, "We'd like to just have a few more days to review it, before we can respond to it."

Begger said the lower oil prices of the past few months are a function of the pandemic and aren't a true indication of where prices would settle out for years to come. The price of oil today sits at $41.30.

Rob Godby, energy economist, said it might have helped to have expanded the range of its assumptions rather than set specific numbers.

"Minimally, they probably should have run some scenarios for more pessimistic market conditions as well as the very optimistic market conditions that they considered," he said.

In their statement, Spencer Hall with Pacificorp said carbon capture hasn't been considered a viable option given it's only been installed at a small number of facilities nationwide. He clarified it's only been utilized at Petra Nova in Texas.

Gov. Mark Gordon responded to a question about that facility's closure by saying carbon capture may follow in the footsteps of wind energy, which took years to get off the ground.

"Fast forward to the last several years and see, as these pinwheels start showing up in the West, how much more economically viable they are," he said. "I think the point is that any new first moving generation does take some time. It doesn't mean that we surrender the opportunity to move forward and improve and bring costs down."

Begger said Wyoming did not pay for the report. It stemmed from a conversation between Gordon and U.S. Department of Energy's Deputy Assistant Secretary for Clean Coal and Carbon Management Lou Hrkman 14 months ago.

The state also announced the U.S. Environmental Protection Agency has granted it primacy over Class VI wells. In other words, the state has more control over the sequestration process in carbon capture utilization and sequestration.

Have a question about this story? Please contact the reporter, Cooper McKim, at cmckim5@uwyo.edu.