Team Pennsylvania, an inter-governmental partnership funded by the state, presented their vision for a hydrogen and carbon-capture hub that would span the entire Commonwealth at last year's Global Clean Energy Action Forum. The team claims that a hub like this would allow Pennsylvania to be a leader in energy while simultaneously reducing greenhouse gas emissions.
The technology would retrofit power plants, factories, and other high-emitting facilities to capture carbon emissions before they are released into the air and transport them via pipelines to locations where carbon would be injected below ground for permanent storage.
The map depicted 1,400 miles worth of hypothetical pipelines that crossed the Commonwealth.
Team Pennsylvania's presentation indicated that 89% of emissions that can be captured are from coal and gas power plants. In the Q&A, I asked how much CCS will increase the cost to produce electricity in these plants.
I confess that my question was set up. I knew the answer. What I was looking for was to see if the Team Pennsylvania panelists, who were promoting the project as the most expensive ever undertaken in Pennsylvania, had any idea of the cost.
They didn't. One brave soul, after furtive glances among the panelists failed to find anyone with an answer, made a wild guess that CCS could increase the cost for electricity generated by coal and gas plants.
The correct answer is: retrofitting coal plants with CCS will more than triple the cost of electricity production.
It is absurd to spend so much money on electricity when you can use wind and solar power, which emit no carbon dioxide and cost little or nothing more than current electricity prices.
Imagine a gas-fired power plant with a capacity of 1,000 megawatts that produces 7 million megawatt-hours of electricity per year.
If the plant were to use the average wholesale electricity price in the five-year period before the Ukraine war temporarily spiked prices, it could expect to receive about $223 millions of dollars for its production.
If the plant retrofitted CCS under the Inflation Reduction Act of 2020, it would be paid an additional $85 per ton of carbon dioxide it produces. This would amount to approximately $262 million.
The plant would receive more money for creating and storing carbon emissions than for producing electricity. Customers and taxpayers will end up paying $485,000,000 for electricity that would otherwise cost $223,000,000.
Even worse would be coal plants which emit more carbon dioxide than gas plants.
The carbon emissions from a coal plant worth $223,000,000 would be captured by $610,000,000, which would mean that the ratepayers would pay $833,000,000 for this $223,000,000 worth of electricity.
We would pay huge premiums for power plants to reduce their emissions.
Let's say, for example, that we don't want to pay the extra money and instead decide that CCS is not cost-effective in coal and gas power plants. We will only use CCS in cases where it makes sense, like steel and cement production.
Do you recall the 1,400 miles of pipe? We could save billions of dollars if coal and gas power plants, which generate 89% of carbon, were replaced with clean energy sources.
It's for this reason that Team Pennsylvania, and other hub advocates, should scrap the idea of CCS in power plants and instead, do the math for a rational hub vision.