Parsing new carbon capture tax credits
University of Texas electricity expert Joshua Rhodes looked at how many power plants are poised to benefit from expanded carbon capture tax credits, per Forbes.
Why it matters: The credits in the February federal spending deal represented a rare bipartisan effort on climate policy, but whether they're attractive enough for use in the power sector (as opposed to other industrial facilities) remains a question.
The bottom line: In his report, he finds 27 coal-fired and natural gas combined cycle power plants within 10 miles of existing CO2 pipelines, which is important for cost purposes.
- "Of the 27 power plants we examined, it appears the economics might work for at least 22," he writes.
- "In fact, all nine coal plants now operating likely could make a profit by sequestering the CO2, or selling it off for [enhanced oil recovery]," he writes, adding that some plants could make as much as $3.7 billion over the 12-year life of the credit.
- Of the 21 gas plants on the list, he sees profits from using the credit for 12 of them, though only 5 of them would see profits via direct sequestration.