June 15, 2020 Read More →

Carbon capturing technologies will require large public subsidies

DeSmog Blog: 

In April, the Center for Global Energy Policy (CGEP) at Columbia University released a report concluding that, without major new subsidies from the American public, technologies for capturing heat-trapping carbon dioxide from coal and natural gas-fired power plants will remain uneconomical.

However, CGEP, which has a history of strongly supporting the interests of the fossil fuel industry, concludes in this report that the government should implement new publicly financed policies in order to ensure investors are willing to take the risk of investing in carbon capture — and use the public to backstop that risk so those investors make money. 

The report, Capturing Investment: Policy Design to Finance CCUS Projects in the U.S. Power Sector, goes into great detail about the various approaches that might be required to support carbon capture for both coal and gas-fired power plants, depending on the multiple financial operating models for those plants. It also analyzes the impacts of the existing tax policy, known as 45Q, that supports carbon capture, use, and storage, or CCUS.

The authors of the report set out to answer the following question: “What are the specific U.S. policy design parameters that could provide investors and lenders with net cash flows that are both high enough and certain enough to attract private capital to CCUS projects?” 

Or to put it another way, how much money will the public have to subsidize coal and natural gas plants to implement CCUS so that investors can be assured of a profit? 

[Justin Mikulka]

More: Carbon Capture Will Require Large Public Subsidies to Support Coal and Gas Power 

Posted in: IEEFA In the News

Comments are closed.