GHG Monitor Vol. 1 No. 2
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January 13, 2017

Petra Nova Becomes Nation’s First Commercial-Scale CCS Project

By Abby Harvey

With little fanfare, NRG Energy on Tuesday announced the successful completion of its Petra Nova carbon capture and storage project near Houston, Texas. The project, which was completed on time and on budget, is the world’s largest post-combustion CCS project and the first operational commercial-scale CCS project in the U.S. “I’m really proud. I’m really proud of NRG. I’m really proud of the team,” David Greeson, NRG vice president of development, told GHG Weekly during a phone interview. “At every step along the way people have stepped up.”

Located at the W.A. Parish facility, the project is intended to capture approximately 1.6 million tons of CO2 annually from an approximately 240-megawatt (MW) slipstream of flue gas from Unit 8 of the coal-fired power plant. This equates to a 90 percent capture rate.

The captured CO2 is being transported roughly 80 miles via pipeline to the West Ranch oil field, which is now partly owned by NRG. In total, the CO2 is expected to enable the procurement of approximately 60 million barrels of oil via enhanced recovery.

NRG broke ground on the project in 2014 and since then has shared little about its progress, hoping to avoid any embarrassing missteps. “We didn’t want to be constantly out there beating our chest about how good we’re doing only to find out when we got to the end to commission the plant that we stubbed our toe,” Greeson said. “We just wanted to make sure that we actually could deliver, that everything that we thought we had figured out about how to do this was going to pan out. That’s why we’re just now being real public about this, because we know we’ve got something that’s going to work.”

Planning for the project began in 2010, at which time the project was imagined to be much smaller, capturing CO2 from only 60 megawatts. However, after bringing in experts to run simulations and consult on the project it became clear to NRG that to make the economics work for enhanced oil recovery, the plant would have to be larger. “The simulator kept coming back with the same answer: If you just had more CO2 all these reservoirs would produce enough to economically cover [the carbon capture],” Greeson said.

The company decided at that time to increase the facility’s size, regardless of limits to the funding available from the Department of Energy, which had granted the project $167 million at its original small size. “The problem was our DOE grant was limited in dollar amount, not in percentage of the project, so we knew we couldn’t count on the government to put in more money,” Greeson explained.

NRG set out to find compatible companies to partner with on the project. “Raising the capital was one of the toughest parts. We were real fortunate that we found like-minded companies in JX and Hilcorp who saw the opportunity and were willing to invest even though it was a … first-of-a-kind joint venture between oil companies and power companies,” Greeson said.

JX Nippon, a Japanese oil and gas exploration company, partnered with NRG 50-50 on Petra Nova, each investing $300 million in the $1 billion project. “We believe this project will contribute to significantly increasing incremental crude oil production from legacy oil fields and also will be a major step forward in helping to decrease CO2 emissions globally,” JX Nippon President and CEO Shunsaku Miyake said in a press release.

Hilcorp is the operator of the West Ranch oil field, which NRG purchased a stake in to further increase its revenue stream from the use of its captured CO2.

The Department of Energy eventually scraped up roughly $20 million in additional funding, though that money didn’t arrive until the project was already under construction. The remaining funding was provided through loans.

Regardless of how tight-lipped NRG was during the construction of the project, the company looks forward to sharing the lessons it learned at Petra Nova, according to Greeson. “We’re certainly willing, with the right confidentiality agreement in place, to consult with, maybe even as a service, help somebody else develop another project,” he said. “We’re not hoarding this. There are certain aspects of the project that have to be confidential because of trade secrets and that sort of thing, but those are the aspects that are protected by intellectual property laws.”

Greeson credited the project’s success largely to the substantial planning performed before the company even broke ground. NRG took “measure twice, cut once” to heart with Petra Nova. “Because it was a first-of-a-kind project and all of us were very, very focused on not following the path that other CCS projects had gone down, we spent, NRG and then later with our partners in the DOE, we spent a lot of energy and a few dollars on up-front studies and up-front engineering,” he said. “We had about 90 percent of the conceptual design of the plant done when we started construction and we had over 20 percent of the detailed engineering done. That is a two times number from what is normally done for this kind of project.”

NRG is one of the largest U.S. power companies, operating a diverse fleet of power generation assets across the country. According to the company, it has “the nation’s largest and most diverse competitive electric generation portfolio and leading retail electricity platform.”

Petra Nova fits into NRG’s ongoing efforts to decarbonize its operations. The company has invested heavily in renewable energy and has begun switching many of its coal-fired plants to lower-carbon natural gas. CCS may be considered for future decarbonization efforts, but the company will need to see a few things before it seriously considers another project.

First, oil prices are not what they need to be to make the idea of retrofitting another plant with CCS an attractive option. “At $50 a barrel for oil we do get our money back, but it’s not enough of a return to justify a new investment. So it made sense to finish this project, economically it made sense to finish this project,” Greeson said.

However, if the cost of carbon capture technology falls, the cost of oil is less of a concern, he added. “$50 a barrel of oil will work if you can get the cost of capturing the CO2 and delivering it to the oil field down,” he said. “When I talk to folks who are doing research on how to improve carbon capture, whether it’s coal or gas, I tell them, you have to get the up-front capital down, that was the biggest hurdle that we had to overcome was raising the funds.”

Another potential solution to the ever-changing variable of oil prices is to find new uses for the carbon. “If we can stay out of the oil business, we’d love to do that. We’re a power company; we’re not looking to get into that business. We got into it on this project because that’s what it took in order to get it done, but if there’s another way besides enhanced oil recovery to take care of the CO2, we’re all for that, and we’re actively putting our money where our mouth is to find it,” Greeson said, noting NRG’s participation in an XPRIZE competition to find novel uses for captured CO2.

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