On the Policy-Driven Potential for Decarbonizing a Fossil-Rich Power Sector via Carbon Capture and Sequestration

In 2020, the Wyoming Legislature enacted House Bill No. 0200 (HB0200), which requires utilities to generate a percentage of dispatchable and reliable “low-carbon” electricity by 2030 in Wyoming and recognizes carbon capture, utilization and storage (CCUS) as the enabling technology. To incentivize investment in CCUS, the federal Section 45Q tax credit is a major economic driver. This study aims to examine the potential role of economic and policy incentives that facilitate CCUS deployment. The results of a retrofit analysis at a unit level reveal that implementing CCUS at existing coal-fired power plants in Wyoming to meet the HB0200 emission limit would significantly decrease the plant efficiency and increase the cost of electricity generation. The cost of CO2 avoided by amine-based CCUS falls within the range from $65 to 201 per metric ton. However, the current tax credit of $50 per metric ton of CO2 stored in saline reservoirs can decrease the cost of CO2 avoided by 47% on the fleet average. The enhancement of the tax credit to $85 per metric ton with the payout term of up to twenty years would offset the added cost for CCS deployment for 62% of the fleet capacity of interest. The joint policy and economic incentives can facilitate CCUS deployment