Project to Outfit Natural Gas Power Plant with Carbon Capture Gets Investor Boost

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A project to outfit an existing natural gas power plant with a "large-scale" carbon capture facility got its legs on April 2 with the finalization of key investment agreements.

Private equity investment firm Starwood Energy Group Global and global investment fund OGCI Climate Investments announced Thursday they had finalized agreements to co-invest in the initial development of the project. Elysian Ventures, a developer that is focused on carbon sequestering projects, will jointly develop the project with Starwood.

Though the companies did not reveal the name of the plant or where it is sited, they said the project will use "commercially available CO₂ capture technology and is expected to capture 90% of the CO₂ emissions from an existing power facility. The captured CO₂ will then be used in enhanced oil recovery and permanently sequestered in an existing oil field," they said.

The project will seek to use Section 45Q tax credits for the deployment of carbon capture projects "once final regulations are implemented, including potential upcoming legislative enhancements," they noted. Section 45Q of the U.S. tax code provides a performance-based tax credit for carbon capture projects that can be claimed when an eligible project has securely stored the captured CO₂ in geologic formations, such as oil fields and saline formations; or beneficially used captured CO₂ or its precursor carbon monoxide as a feedstock to produce fuels, chemicals, and products such as concrete in a way that results in emissions reductions as defined by federal requirements. The companies also revealed that the project will "be non-recourse financed."

Construction of the facility is expected to begin in early 2021.

According to Starwood CEO Himanshu Saxena, once built, the project will become "a premium asset and showcase for the deployment of this technology." He added: "We look forward to this project, and to exploring further carbon capture opportunities across multiple sectors, consistent with our [environmental, social, and governance] goals."

Bret Logue, principal and co-founder of Elysian, noted that his company has been seeking "transformational projects to develop that are financeable, replicable, and that will eliminate millions of tons of carbon emissions annually." The partnership with Starwood and OGCI, he said, "provides the technical and commercial experience and financial backing-from development through construction to operation-that immediately puts us on the road to achieving this goal."

(This story is being updated with new details as they emerge. POWER has reached out to the developers with questions about the size and location of the facility, along for other details.)

-Sonal Patelis a POWER senior associate editor (@sonalcpatel,@POWERmagazine).

The post Project to Outfit Natural Gas Power Plant with Carbon Capture Gets Investor Boost appeared first on POWER Magazine.