Abby L. Harvey
GHG Monitor
1/30/2015
While progress has been made towards the full deployment of carbon capture and storage technology in the United States, the Department of Energy is not where it needs to be to support full-scale deployment of the technology, according to a National Coal Council report released this week. The NCC, an advisory body to the U.S. Secretary of Energy, found that progress needs to be greatly accelerated for the technology to reach commercialization. “The main conclusion from this study is that, despite its successes, the current DOE program has not reached critical mass with regard to the commercialization of CCS in the time frame needed to meet stated U.S. goals for CO2 emissions reductions. Significantly more CCS/CCUS pilot and demonstration projects are needed in order to commercially deploy the technology. While there have been some notable successes, the urgent need for numerous commercial demonstration units does not appear to be part of the DOE plan. Without adequate demonstration, there can be no commercialization,” the report says. To address this problem the NCC has made several recommendations to DOE regarding policy, funding and other issues such as public outreach.
The first issue addressed in the report is that CCS is not treated equally to other low-carbon technology in current policy. “Policy parity for CCS in funding, extending tax credits, and other subsidies provided to renewable energy sources, will facilitate creation of a robust CCS industry in the US, benefiting the American people and leading to the development of the lowest cost, near zero emission energy technology. Such technology would be available for electric generation as well as all fossil fuel dependent industrial applications,” the report says, recommending that “DOE take a stronger position on the need for policy parity with respect to funding allocations.”
Funding Must be Carefully Handled
Various issues addressed in the report deal with funding problems. First, the report states, the funding incentives that currently exist are not well coordinated. The NCC suggests that a review of all federal incentive programs be conducted to ensure that they work together to support CCS deployment effectively. “The current basket of incentives has not proven to be effective in getting a substantial number of demonstration projects to come to fruition,” the report says.
The report also suggests that the DOE may have to step in where federal funding support fails, finding new ways to fund commercial scale demonstration projects. “Given the absence of recent federal funding support for commercial scale CCS demonstration projects and national budget constraints, there is a need to find creative mechanisms to finance such projects. The existing DOE loan guarantee program is insufficient to move these projects forward. The NCC recommends a concerted effort be undertaken by DOE to identify and pursue creative mechanisms to finance CCS/CCUS projects,” the report says. Additionally, the NCC recommends waiving the 50 percent cost share requirements currently in place for CCS projects.
Further, the NCC found inefficiencies in the DOE’s funding practices for research and development projects. The group states that DOE is doing well when funding early stage projects, but needs to accelerate the pace at which larger scale projects are brought to fruition. However, the group says, DOE must be highly selective in choosing which technologies to scale-up. The group suggests that after projects reach a certain level of development, “DOE cull its support to only those technologies which show a clear promise of meeting or exceeding DOE’s CCS performance goals.” In an attempt to generate funding for these more promising technologies, the groups suggests that DOE “develop a plan for demonstrating second generation and transformational CCS technologies at a scale of 25–50 MW by 2020 and make subsequent budget requests to Congress to carry out the plan,” the report says.
