Canada-based Capital Power Corp. (Capital Power) will not continue its pursuit of the CA$2.4bn (US$1.7bn) carbon capture and storage (CCS) project at its Genesee natural gas-fired power plant.
The company has deemed the power plant project near Edmonton technically viable but not financially feasible.
“Regarding CCS, after a detailed review of the project, we have concluded that the economics for CCS at the Genesee site do not meet our targeted risk return thresholds,” said Avik Day, President and CEO of Capital Power, who spoke during a quarterly earnings call yesterday.
“This is a result of our thorough work, including extensive technical review of the post-combustion CCS value chain from capture through sequestration, including types of solvent and components that can optimise the process,” he added.
Despite the cancellation, the CEO said that Capital Power will continue to evaluate potential CCS projects.
Through a grant awarded by the Michigan Public Service Commission, the company is conducting a CCS feasibility study at Midland Co-Generation, the largest natural gas-fired combined electrical energy and steam energy generating plant in the US.
Canadian environmental advocacy organisation Environmental Defence reacted to the cancellation of the Genesee CCS project, calling the decision ‘the latest failure in carbon capture’s terrible track record.’
“It should serve as a lesson for governments on how reckless it is to be using taxpayer dollars to subsidise these projects,” said Julia Levin, Associate Director, National Climate at Environmental Defence.
The organisation stated that carbon capture has not effectively been implemented in the power sector, capturing only a fraction of the promised rate.
“Equipping fossil power plants with carbon capture makes fossil fuel generated power even more expensive, while the cost of renewable energy has plummeted.”
CCS costs range from €14 (US$15) to €110 (US$117) per tonne of captured carbon depending on the missions source. DAC projects are even more expensive, between €550 (US$587) and €916 (US$978) per tonne, according to the International Energy Agency.
Developers advocate for a carbon price, be it through a tax, trading scheme or tax incentive to make CCS financially viable.
Without it, only projects that boost revenue in alternative ways, such as increased oil production, are profitable.
Countries like the US have introduced public subsidies for carbon capture projects, such as the Inflation Reduction Act of 2022, which provides tax credits of $50 (€46) per tonne for CCUS, $85 (€78) per tonne for CCS and $180 (€165) per tonne for DAC.
