Abby L. Harvey
GHG Monitor
10/2/2015
The Department of Energy this week returned to the U.S. Treasury Department $1.27 billion in American Recovery and Reinvestment Act funds earmarked for carbon capture and storage projects. This sum consists of unspent money from four different projects, one that was shut down and three that were unable to meet the Sept. 30 spending deadline.
The return of the funds is “a reflection of the significant challenges faced by businesses that are introducing innovative, early-stage energy technologies to markets and not a negative reflection on the readiness of CCUS technologies,” a DOE spokesperson said this week.
Funds that had been allocated to four projects — the FutureGen 2.0 project in Meredosia, Ill.; the Hydrogen Energy California (HECA) project in Kern County, Calif.; the Texas Clean Energy Project near Odessa, Texas; and the Lake Charles Clean Energy project in Lake Charles, La. — have been returned to Treasury as of Sept. 30.
The gasification facility at Lake Charles was abandoned in 2014 based on the developer’s business assessment of the core plant. “The decision was unrelated to the additional deployment of CCS technologies supported by DOE,” according to DOE. ARRA funding totaling $248.6 million for the project has been returned to the Treasury Department.
ARRA funding for the FutureGen 2.0 project, an oxycombustion retrofit, was suspended in early 2015 due to the plant’s inability to meet the spending the deadline. FutureGen encountered legal issues related to permitting, which all but halted progress. Of the $1 billion in ARRA funding awarded to the project, DOE invested approximately $116.6 million for work on the power plant and approximately $83.3 million on the pipeline and storage reservoir project. The remaining $794.8 million has been returned to Treasury. The loss of funding has been a heavy blow to the FutureGen project, though it has not officially been abandoned at this point.
The HECA project, which has encountered permitting issues, will be an advanced coal-fired generating plant that co-produces electricity and fertilizer products. It became clear in July that, due in part to the project’s permitting issues, developers would not meet the spending deadline. The California Energy Commission has been under pressure by the Sierra Club to terminate the project’s certification proceedings due to an inability to secure a CO2 offtake agreement. DOE suspended funding at that time, and $122.2 million has been returned to Treasury.
The most recent project to announce its inability to meet the spending deadline is the Texas Clean Energy Project, an integrated gasification combined cycle facility that will incorporate carbon capture, storage, and utilization. TCEP has had no legal problems but has been unable to secure key construction contracts. Until the second half of September, TCEP’s developers believed they would secure these contracts and allocate the ARRA funds before the deadline. ARRA funding totaling $104.2 million earmarked for TCEP has been returned to Treasury.
