NRG has recently started a demonstration plant for carbon capture and storage at its coal-fired power plant southwest of Houston, Texas. The project is a 50/50 joint venture between JX Nippon Oil & Gas Exploration and NRG and aims to capture all CO2 emissions from the 240 MW plant and use it in a nearby oilfield for enhanced oil recovery (EOR) increasing production from 500 to 15,000 bpd. The combination of using dirtier coal, carbon capture technology, and EOR may help slow if not reverse the decline of coal-fired power plants in the U.S.
Expanding both coal and natural gas demand may be difficult to do. Today, coal’s primary use is as a feedstock for electricity generation and accounts for about one-third of all electricity production. From 2005 to 2015 the average operating costs for coal-fired power plants rose over 30% and over the same period the cost of operating a natural gas-fired plant declined nearly 50%. The reduction in natural gas-fired operating costs is primarily due to a large reduction in fuel costs. Expanding coal production may be difficult as there is a large supply of cheap natural gas that is available today due to hydraulic fracturing and natural gas is a cheaper fuel for power generation than coal.
EOR using CO2 could, however, help improve the viability of some coal-fired power plants. Higher CO2emissions from coal impact the competitiveness of coal-fired power plants. However, the use of carbon capture technologies coupled with the use of the resulting CO2 stream in EOR could help coal plants located near producing oil fields. NRG’s Petra Nova carbon capture project is taking advantage of this synergy. While the synergies of coal, carbon capture, and EOR may not be enough to keep coal from losing share to natural gas, it may extend the life of current coal plants and help reduce their overall operating costs, so long as the benefit from EOR outweighs the cost of a carbon capture system.
-Tyler Wilson and Uday Turaga
