Deployment Models for Commercialized Carbon Capture and Storage

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Abstract

Even before technology matures and the regulatory framework for carbon capture and storage (CCS) has been developed, electrical utilities will need to consider the logistics of how widespread commercial-scale operations will be deployed. The framework of CCS will require utilities to adopt business models that ensure both safe and affordable CCS operations while maintaining reliable power generation. Physical models include an infrastructure with centralized CO(2) pipelines that focus geologic sequestration in pooled regional storage sites or supply CO(2) for beneficial use in enhanced oil recovery (EOR) and a dispersed plant model with sequestration operations which take place in close proximity to CO(2) capture. Several prototypical business models, including hybrids of these two poles, will be in play including a self-build option, a joint venture, and a pay at the gate model. In the self-build model operations are vertically integrated and utility owned and operated by an internal staff of engineers and geologists. A joint venture model stresses a partnership between the host site utility/owner's engineer and external operators and consultants. The pay to take model is turn-key external contracting to a third party owner/operator with cash positive fees paid out for sequestration and cash positive income for CO(2)-EOR. The selection of a business model for CCS will be based in part on the desire of utilities to be vertically integrated, source-sink economics, and demand for CO(2)-EOR. Another element in this decision will be how engaged a utility decides to be and the experience the utility has had with precommercial R&D activities. Through R&D, utilities would likely have already addressed or at least been exposed to the many technical, regulatory, and risk management issues related to successful CCS. This paper provides the framework for identifying the different physical and related prototypical business models that may play a role for electric utilities in commercial-scale CCS.

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