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Largest Carbon Capture Complex Complete

NRG Partners with JX Nippon on $1 billion Deal

(Bloomberg) - U.S. power generator NRG Energy Inc. and Japanese energy producer JX Nippon Oil & Gas Exploration  have finished the world’s largest system to capture carbon dioxide produced from burning coal at a power plant.

The $1 billion Petra Nova project, which collects carbon emissions from an existing coal-fired power plant southwest of Houston, passed testing in late December and was turned over for operations, the companies said in a statement Tuesday. The carbon dioxide, a heat-trapping gas that contributes to global warming, is sent by pipeline to an oil field jointly owned by NRG, JX Nippon and Hilcorp Energy where it can be used to draw crude out of the ground.

The achievement comes at a precarious time for so-called clean coal projects that have for years benefited from federal policies encouraging lower emissions from power plants to battle climate change. While the Petra Nova project was finished on schedule, another clean coal plant being built by Southern Co. in Mississippi has been delayed by years and is billions over budget. President Donald J. Trump has meanwhile vowed to roll back rules that require power generators to curb emissions.

“Even for the climate change skeptic, they should be in support of this project because it is about domestic energy reserves," David Greeson, vice president of development for NRG Energy, said in a phone interview. “I really think this kind of project, with this structure, is something that transcends the debate on this.”

NRG and JX Nippon each invested $300 million in the Petra Nova system, with the rest of the financing coming from loans and a U.S. Energy Department grant for as much as $190 million, NRG said. The complex can capture more than 5,000 tons of carbon dioxide a day, the equivalent of taking more than 350,000 cars off the road, according to the Princeton, New Jersey-based power generator.

Southern Co. is still working on starting its long-delayed Kemper clean coal plant, designed to turn coal into a gas that’s then burned to produce power. The company once projected a completion date in 2014. On Friday, the utility said it expects to place the project into service this month, while adding that challenges in running the plant’s gasifiers may delay startup once again.

Almost two years ago, the U.S. government pulled the plug on a different carbon-capture project known as FutureGen amid a combination of approaching deadlines, leery investors and reluctant power buyers. The project in Illinois had been awarded $1 billion in federal aid.

Unlike Southern’s plant, the Petra Nova system captures carbon from coal after it’s been burned. The technology doesn’t raise the price of the electricity produced because the costs of installing it are offset by the revenue earned from supplying carbon to oil fields, Greeson said. The project breaks even with oil trading at $50 a barrel, he said.

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