The U.S. will likely need to transport significant quantities of captured carbon dioxide through yet-to-be-built pipeline networks to achieve its climate goals, the U.S. Department of Energy said July 13. |
The U.S. Department of Energy on July 13 announced roughly $2.6 billion in funding opportunities for carbon capture and storage demonstration projects, as well as studies to help speed the build-out of pipeline networks to transport planet-warming carbon dioxide.
The funding is tied to a bipartisan infrastructure bill signed into law by President Joe Biden in November 2021.
Among its many energy- and climate-related provisions, the law appropriated approximately $2.5 billion for fiscal years 2022 through 2025 for domestic commercial-scale carbon capture and sequestration, or CCS, demonstration projects.
The bill specified that two final projects must be sited at new or existing coal-fired power plants, with two more sited at new or existing natural gas-fired generators. Another two projects must be sited at new or existing industrial facilities, such as cement plants or steel mills.
The DOE explained in a notice of intent that it expects to award funding for the projects through a "competitive down-select" process over multiple phases, with "standard" and "accelerated" timelines. Most applicants are expected to apply for project funding under the accelerated timeline, since the federal 45Q tax credit for geologic CO2 storage requires projects to begin construction by Jan. 1, 2026, the DOE said.
The DOE said it expects to award funding to 12 projects in an initial phase and eventually narrow recipients down to six projects, with the bulk of federal funding coming in the latter stages of the award process. All phases of the award process will require recipients to share at least 50% of the project's costs.
Minimum requirements in the first phase include commitment letters for host site agreements, secure CO2 storage access, and equity plans documenting community engagement in line with the Biden administration's "Justice40" environmental justice initiative.
The DOE has struggled in recent years to fund successful carbon capture demonstration projects for the U.S. power sector.
Eight coal plants received $684 million in DOE funding through the 2009 U.S. stimulus package, but just one of those projects — NRG Energy Inc.'s Petra Nova project — was completed and reached commercial operation, according to a U.S. Government Accountability Office audit released in December 2021. After experiencing lengthy stretches of downtime, Petra Nova ceased operating in May 2020 when low oil prices rendered the plant uneconomic.
However, the same audit found that 97% of $438 million awarded to industrial facilities through the stimulus package went to facilities that were still in operation.
In its notice of intent, the DOE stressed that the demonstration projects funded by the bipartisan infrastructure bill will be crucial to the Biden administration's climate goals, which include achieving a carbon-free power grid by 2035 and a net-zero economy by 2050.
$100M for CO2 pipeline studies
The bipartisan infrastructure law also included $100 million in DOE funding over fiscal years 2022 through 2026 for front-end engineering studies of commercial-scale CO2 pipeline projects.
The DOE said in a separate notice that it expects to award funding for the studies with an emphasis on "different geographic regions that will provide DOE with increased understanding of CO2 transport costs, transport network configurations, and technical, regulatory, and commercial considerations."
Notably, the studies could help clear up unanswered questions over federal-state jurisdiction over interstate CO2 pipeline systems.
Funding will be awarded with special consideration for "the creation and integration of a hub and cluster configuration," rather than stand-alone CO2 pipelines, the DOE said. Applicants are also encouraged to propose repurposing existing pipelines, the DOE added.
Funding recipients will be required to share at least 20% of a study's costs.
The July 13 notices follow several recent Biden administration announcements for carbon capture projects funded through the bipartisan infrastructure law.
On May 5, the DOE announced $2.3 billion for projects involving geologic sequestration. And the DOE on May 20 launched a $3.5 billion program to support direct air capture of carbon dioxide emissions, a nascent technology that supporters say will be crucial to achieving national and global climate goals.
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