Billions in Federal Funding Earmarked for Power Plant CCS Projects: Here's a Snapshot

The Department of Energy (DOE) unveiled plans on Sept. 27 to inject $1.3 billion into its portfolio of federally funded carbon capture demonstration and large-scale pilot programs by the end of the year—including up to $400 million to support one commercial-scale coal power plant carbon capture and storage (CCS) demonstration.

The Office of Clean Energy Demonstrations (OCED) on Friday said it will issue a Notice of Funding Opportunity (NOFO) titled “Point-Source Carbon Capture Large-Scale Pilots, Commercial Demonstrations, & Networked Demonstration Commercialization” in the last quarter of 2024. Slated to cover four topic areas, the funding will seek to demonstrate a commercial-scale project—including capture, transport, and storage of carbon dioxide (CO₂) “from at least one unit operations” of a new or existing domestic coal facility. The project will “serve as a potential ‘anchor tenant’ for future nearby CCS developments and provide “necessary cost and performance data to inform future investment decisions in coal applications,” the NOFO says.

The funding will also support up to two projects with a combined $350 million in federal share at non-power industrial facilities and up to four projects (with up to $450 million) to test “novel technologies integrated at a large-scale and under real exhaust conditions in both the power and industrial sector.” These projects will “de-risk transformational carbon capture approaches with improved performance and reduced capture cost,” it said. Finally, the funding will designate up to four projects (with up to $30 million) to support their integrated, iterative planning and business development of localized carbon management networks. A key facet of that effort will be to leverage shared transport and storage among multiple relevant entities that agree to work together.

OCED’s planned $1.3 billion in new CCS funding is part of the DOE’s mandate under the 2021-enacted Infrastructure Investment and Jobs Act (IIJA). Spurred by the law, OCED’s carbon management portfolio includes the $2.537 billion Carbon Capture Demonstrations program and the $937 million Carbon Capture Large-Scale Pilots program. The Carbon Capture Demonstrations program essentially funds projects that contribute to the development of six full-scale integrated demonstrations of carbon capture and storage, as directed under the Energy Policy Act of 2005. The Carbon Capture Large-Scale Pilots program, meanwhile, funds projects that further the development of transformational carbon capture technologies “not yet advanced to the point of being tested under real operational conditions at commercial scale,” as directed by the statute.

So far, OCED’s power plant–related portfolio includes three commercial-scale demonstrations, two large-scale pilots, and five projects that will conduct integrated front-end engineering and design (FEED) studies. Following is a snapshot of what those projects entail.

Carbon Capture Demonstrations

Following its release of a funding opportunity in February 2023, the DOE in December 2023 picked three eligible carbon capture commercial-scale demonstrations following a merit review.

Baytown Carbon Capture and Storage Project in Texas. Calpine Texas CCUS Holdings received $270 million for Phase 1 of the project on July 23. The Baytown, Texas, project will seek to capture up to 2 million metric tons of CO₂ annually from the 810-MW baseload NGCC in Baytown, Texas, using Shell’s CANSOLV technology. The project, composed of three combustion turbines with three heat recovery steam generators, is set to demonstrate the first full-scale implementation of CCS technology at a natural gas combined cycle power plant in the U.S. The project plans to sequester the CO₂ in saline storage sites on the Gulf Coast. The year-long first phase will involve completing an integrated FEED, workforce planning, project permitting, and environmental reviews.

Sutter Decarbonization Project in California. Led by Sutter CCUS, an indirect Calpine subsidiary, the project proposed for Yuba City, California, received $8.6 million for Phase 1 of the project on Aug. 7. Sutter will capture up to 1.75 million metric tons of CO₂ each year, using ION Clean Energy solvent, from the 550-MW Sutter Energy Center (SEC), transport it and sequester it permanently underground in saline geologic formations. The gas-fired project consists of two combustion turbine generators, two heat recovery steam generators with duct burners, and a single condensing steam turbine generator. Like Baytown, Sutter’s first phase involves an integrated FEED study and other attributes. Unique to this project is the world’s first deployment of an air-cooling system at a carbon capture facility, which will minimize freshwater use—an essential feature for the arid western U.S.

Project Tundra in North Dakota. The project developed by the Dakota Carbon Center East Project and led by Minnkota Power Cooperative and TC Energy will be located next to the 250-MW Milton R. Young Station near Center, a two-unit, lignite coal-based power plant. On Sept. 25, the project received nearly $4.2 million in federal funding (of the total federal cost share of up to $350 million) for Phase 1 activities. The project plans to use Mitsubishi Heavy Industries’ KS-21 solvent to capture an annual average of 4 million metric tons of CO₂. The captured CO₂ will be sequestered in saline geologic formations surrounding the power plant, which already has an approved  Class VI well permit.

Carbon Capture Demonstration Integrated FEED Awards

Separately, in September 2022, the DOE announced $189 million in funding for integrated FEED studies to support the development of integrated carbon capture, transport, and storage projects. On May 5, 2023, the agency announced project selections that would proceed to award negotiations.

Power projects awarded so far include:

Edwardsport Integrated Gasification Combined Cycle (IGCC) Carbon Capture Project. The project in Knox County, Indiana, led by Duke Energy Indiana in September 2023, received $8.2 million in federal funding for a FEED study as part of a larger $17.2 million project. The study will evaluate the feasibility of capturing up to 3.6 million metric tons of CO₂ per year from flue gases of the Edwardsport IGCC power plant’s heat recovery steam generators (HRSGs) using Honeywell’s Advanced Solvent Carbon Capture process, which has a technology readiness level (TRL) of 7. The captured CO₂ will be stored onsite in the plant’s “ample” pore space, which can hold up to 400 million metric tons of CO₂

Polk Power Station Integrated CO₂ Capture Project. The project at Polk Power Station in Mulberry, Florida, led by Tampa Electric Company (TECO), received $4.7 million in federal funding for a FEED study in December 2023 as part of a larger $9.4 million project. The study will focus on designing and determining the cost of retrofitting ION Clean Energy’s post-combustion carbon capture technology to the 1,190-MW four-unit natural gas combined cycle (NGCC) unit at the Polk Power Station, capturing up to 3 million metric tons of CO₂ per year, or 95% of the plant’s emissions. “As part of this project, the CCS system will be designed to maintain the necessary flexibility of a dispatch-based generating asset, which pushes the boundaries of scalability, maximizes energy efficiency, and utilizes a transformational solvent, while maintaining a robust and flexible system,” OCED noted.  The captured CO₂ will be transported via pipeline and stored in secure geologic formations.

Lake Charles Power Station Integrated CO₂ Capture Project. The full-scale integrated carbon project at Lake Charles Power Station in Westlake, Louisiana, received $8.6 million in federal funding for a FEED study in January 2024 as part of a larger $17.3 million project. Led by Entergy Services, the FEED study is slated to focus on retrofitting Mitsubishi Heavy Industries’ KS-21 solvent-based post-combustion carbon capture technology to the natural gas combined cycle (NGCC) unit at the 994-MW power plant, capturing up to 2.5 million metric tons of CO₂ per year, or 95% of the plant’s emissions. Entergy Services has partnered with Gulf Coast Sequestration to use their sequestration site 30 miles from the plant, with a pipeline to transport the captured CO₂ for secure storage.

A separate partnership comprising Houston-based oil service firm Crescent Midstream and SAMSUNG E&A on Sept. 20 announced it would conduct a FEED study on cost estimates for the planned integrated CCS project at Lake Charles. The $1 billion project is slated to use Honeywell capture technology to capture 3 million metric tons of CO₂ per year—making it one of the largest CCS projects. “As part of the project, Crescent would apply its extensive onshore and offshore pipeline construction and operations experience to facilitate the safe transportation of CO₂ from emitters to permanent underground storage facilities,” Crescent noted. Entergy said that it will consider pursuing one of these two options based on the findings of these studies.

Dry Fork Station Integrated CO₂ Capture Project. The project at Dry Fork Station in Gillette, Wyoming, led by Membrane Technology and Research (MTR) Carbon Capture, received $4.6 million in federal funding for a FEED study in April 2024 as part of a larger $9.3 million project. The project is led by MTR, but it will serve Basin Electric Power Coop’s Dry Fork Station. The DOE is at the same time backing a large-scale pilot at the Wyoming Integrated Test Center to capture CO₂ from flue gas produced at Dry Fork Station (see below).

The project is focused on designing a system using MTR’s second-generation Polaris, and the FEED will analyze the requirements for designing a system to capture, compress, and store 3 million metric tons of CO₂ per year onsite, achieving a minimum carbon capture rate of 90%. The study will focus on carbon capture, but it will also assess the potential integration of a CO₂ pipeline and geologic storage using CarbonSAFE data.

Four Corners Power Plant Integrated CO₂ Capture and Storage Project. The project at the coal-fired 1.5-GW Four Corners Power Plant, led by Navajo Transitional Energy Company (NTEC), received $6.6 million in federal funding for a FEED study in September 2024 as part of a larger $13.1 million project. The study will focus on designing an amine-based, post-combustion carbon capture system capable of capturing a minimum of 10 million metric tons of CO₂ per year—over 95% of the plant’s emissions. The captured CO₂ will be transported and stored securely in geologic formations, with plans for pipeline development through a separate DOE CarbonSAFE initiative. In addition to engineering, the project will emphasize workforce development and community engagement through its Community Benefits Plan, partnering with San Juan College and Navajo Technical University to provide job training and prioritize local hiring within the Navajo Nation. If the study finds CCS to be viable, NTEC plans to use amine-based, post-combustion carbon capture technology to extend the life of the Four Corners plant beyond its current 2031 timeline.

[Award pending] Integrated Capture, Transport, and Geological Storage of CO₂ at Dallman 4. The project at City Water, Light and Power’s Dallman 4 coal-fired power plant in Springfield, Illinois, led by the University of Illinois at Urbana-Champaign, will receive federal funding to develop an end-to-end solution for capturing, transporting, and storing 2 million metric tons of CO₂ per year. The project will use a Linde-BASF solvent-based carbon capture system to reduce emissions from the plant, with the captured CO₂ being transported to the Illinois Storage Corridor for secure geologic storage.

Carbon Capture Large-Scale Pilots

Following its February 2023 funding announcement, the OCED on Feb. 2, 2024,  announced  four projects selected for award negotiations under its Carbon Capture Large-Scale Pilot Projects Program following a merit review process described in its funding opportunity announcement. Awards will be made on an ongoing basis starting in August 2024.

Projects related to power generation include:

Dry Fork Carbon Capture Pilot in Wyoming. TDA Research and Schlumberger Technology Corp. are slated to receive up to $49 million in OCED funding to pilot TDA Research’s sorbent-based technology. The project received $5 million under the program in August 2024 to kick off Phase 1. The Dry Fork pilot project, located at the Wyoming Integrated Test Center near Basin Electric’s 405-MW Dry Fork Power Station, will capture over 90% of CO₂ emissions from coal flue exhaust at high purity levels (+95%). The system aims to capture up to 158,000 metric tons of CO₂ per year. Phase 1 activities, which will span 18 to 22 months, include a front-end engineering design (FEED) study, workforce planning, project permitting, and environmental reviews. The captured CO₂ will be evaluated for sequestration options, including through Wyoming CarbonSAFE.

Cane Run 7 Carbon Capture Project in Kentucky. PPL Corp.’s Cane Run Generating Station in Louisville, Kentucky, in September 2024, received $4.9 million from a total OCED award of up to $72 million to kick off Phase 1 activities. The project aims to capture 95% of CO₂ emissions from a portion of the gas power plant’s flue gas using advanced heat-integrated technology developed by the University of Kentucky, targeting 67,000 metric tons of CO₂ per year. Phase 1 activities, which will span 18 to 21 months, include a front-end engineering design (FEED) study, workforce planning, project permitting, and environmental reviews. The project, a key step toward assessing carbon capture viability on natural gas units, involves collaboration with EPRI, Siemens Energy, and Koch Modular Process Systems.

Technology, Commercial Readiness a Key Concern

According to the DOE, the federal funding is necessary to boost the technology readiness level (TRL) of CCS’s three distinct arms: carbon capture, transport, and storage. CCS is already established it notes. So far, 26 commercial-scale projects in operation globally and an estimated 45 CCS facilities in operation in development in the U.S. today. In North America, however, only two power-related projects have demonstrated the full scope of CCS: the coal-fired PetraNova W.A. Parish Project in Texas and the SaskPower Boundary Dam project in Saskatchewan.

For now, many carbon capture approaches have not been tested on flue gases or at large scale. “Most non-solvent carbon capture approaches (e.g., membrane-based, sorbent-based, hybrid, molten salt, cryo-based) are at TRL 4-6 today regardless of flue stream. Although nascent, these non-solvent approaches may have high potential for performance improvements long-term,” it says.

Meanwhile, while the TRL of carbon transport by pipeline is mature—more than 5,500 miles of CO₂ pipeline has been established the U.S. today—research is needed to “understand how CO₂ composition variations can affect pipelines,” it says. Carbon storage is  technically feasible and mature today in some places, but each site poses “unique uncertainties and risks that require a technical subsurface evaluation to define and confirm the adequacy of the complex geology for the proposed project site(s),” it notes. “Much of this work is supported today by the existing and active DOE CarbonSAFE program, managed by the Office of Fossil Energy and Carbon Management (FECM).”

The commercial adoption readiness level (ARL)—a DOE-developed measure that assesses how well a technology has been de-risked alongside its ecosystem economics—also widely varies across aspects of CCS deployment. Some technologies, particularly in carbon capture, may face higher costs that are not fully mitigated by incentives like the 45Q tax credit, while others encounter performance uncertainties due to limited operational data. Additionally, the readiness of carbon transport and storage infrastructure, along with regulatory, financial, and workforce challenges, can significantly affect the pace and scale of CCS adoption across different sectors, the DOE explains.

The NOFO unveiled on Friday will seek to broadly support the design, community engagement, construction, and operation of point-source carbon capture facilities and related infrastructure. It will focus on three key areas: Topic Area 1 will fund commercial-scale carbon capture demonstrations at one coal-fired power plant and one industrial facility, aiming to provide long-term operational data. Applicants “must have at least performed a pre-FEED study on the capture system,” the DOE notes. “Applicants will be expected to be ready for the detailed design phase if a FEED study already exists or is nearing completion. Facilities are expected to leverage capture technologies tested on relevant flue gas, demonstrating at least a 90% capture efficiency for at least 1,000 hours (i.e., TRL 7 or above).”

Topic Area 2 will support large-scale pilot projects that test transformational carbon capture technologies in power generation or industry, improving efficiency and reducing costs. Topic Area 3 will facilitate financial investment decisions for carbon management networks, encouraging shared transport and storage infrastructure development.

Ultimately, the DOE hopes the program will drive initial market adoption while improving the viability of CCS.  “DOE estimates that reaching our nation’s climate goals will require capturing and storing 400 million to 1.8 billion tons of CO₂ annually by 2050,” it noted. “Commercial demonstration of advanced carbon capture technologies, integrated with reliable transportation and storage infrastructure, is necessary for the widespread deployment of these carbon capture technologies.”

OCED on Friday said it anticipates that the funding solicitation will be released in late 2024. “Potential applicants may wish to register for the informational webinar on October 21, 2024. OCED is also hosting an in-person Industry Day on November 19, 2024, in the Washington, D.C. metro area to facilitate partnerships among eligible applicant teams,” it said.

—Sonal Patel is a POWER senior editor (@sonalcpatel, @POWERmagazine).

Correction (Oct. 10.): Clarifies that two separate FEED studies are underway for carbon capture at Lake Charles Power Station.