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The development of carbon capture, utilization, and storage (CCUS) projects presents unique opportunities and challenges for investment firms looking to deploy capital into the carbon capture space. CANUSA EPC, with its extensive experience in evaluating and developing carbon capture projects, offers valuable insights and strategies to navigate this complex landscape.

Determining Your Levelized Cost of CO2

Determining the internal rate of return requires accurate Capital Expenditures as well as Operational Expenditures to determine the levelized cost of capture and transport of the CO2.

The CapEx for the facility encompasses the construction of the capture process to provide the CO2 product. A large portion of CO2 project equipment costs will be tied up in compression equipment. Typically, large compression systems are custom-fabricated and require specialized services that are not readily available. Instead, CANUSA EPC recommends deploying compression systems with smaller units in parallel designs. This solution is more likely to:

  • be readily available (compress schedule),
  • allow for efficient capacity modulation of the system,
  • provide efficient scalability for capacity, and
  • produce higher reliability for the project.

The OpEx to run the facility is predominately based on power consumption. There are important strategies to ensure the facility runs efficiently and power costs are structured appropriately. VFDs and soft starts can be used in combination to lower demand spikes and electricity bills. Read more about electrical drive approaches.

Technology Development for CO2 Capture

Capturing CO2 from sources with higher concentrations of CO2 (greater than 8%) leads to lower separation costs and less energy consumption. High concentrations of CO2 present de-risked capture technology, as they can rely on traditional methods. Recent technological deployments for engine emission applications are trending towards $40 per metric ton of CO2. CANUSA EPC highlights that CO2 emissions from amine plants and ethanol facilities are relatively pure and can be economically delivered to pipeline or beverage grade specifications. Read a detailed case study: CO2 Injection & Amine Emissions Capture.

Transportation: Best By Truck, Rail, or Pipeline?

Transporting CO2 from the capture site can be done via truck, rail, or pipeline, similar to oil or bulk goods. Trucking is suitable for smaller projects, topping out around 150 metric tons per day (MTPD) due to logistical complexities. Rail applications are viable for projects approaching 400 MTPD when there is an existing train line near the facility. Pipelines are the most efficient way to transport large amounts of CO2 to hubs for injection or distribution to industrial users. CANUSA EPC advises focusing on injecting CO2 into saline reservoirs close to the emitter source in states with primacy over Class II injection wells, as these projects are quicker to approve1.

What Government Incentives are Applicable to CO2 Capture?

The long-term commercial use of CO2 as an emission removal tool is still developing. Government programs, such as those funded under the Inflation Reduction Act (IRA), support many active projects through reimbursement programs like 45Q or 45Z. CANUSA EPC emphasizes the importance of executing projects in a manner that meets IRA requirements to take advantage of these incentives. This approach provides flexibility to adapt to any changes in the program. Read more about rebates for your project.

Approaching Carbon Developments Wisely

To successfully navigate the complexities of CO2 project development, it’s crucial to consider:

  • developing a levelized cost of carbon that accounts for CapEx and OpEx,
  • leveraging reliable CO2 capture technologies,
  • optimizing transportation methods or remove them with onsite injection, and
  • capitalizing on government incentives.

By implementing these strategies, investment firms can enhance the efficiency and profitability of their CO2 projects while contributing to a sustainable future.

 

Let’s work together to help build a financial model for your CO2 project.  With just a few data points, we will provide a report that will bring clarity to your project’s feasibility – request a free Class V Estimate.

 

Source: 1 https://www.epa.gov/uic/primary-enforcement-authority-underground-injection-control-program-0

 

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