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Speaker: Richard Esposito, Southern Company

Many electricity utilities in the US are pursuing GHG emissions reduction goals. Since 2018, 22 utilities have announced longer-term goals of carbon-free or net-zero emissions by 2050. While the interim, year 2030 to 2035, goals for GHG emission reductions vary considerably, they are still significant and will require a hard look at accelerated installation of CCS. Regional differences in energy markets, generation mix, regulatory environments, and access to renewable energy resources will influence the evaluation and pursuit of the net-zero emissions goal. 

Electricity producers are considering many approaches to meeting these CO2 emission reduction goals including greater use of wind, solar and nuclear; use of CCS with fossil fuel resources; a larger role for energy storage; and an increased emphasis on end-use efficiency. These CO2 reduction approaches compete for “market share” based on cost, reliability, and technology commercial availability. At the same time the US electric power generation industry is steadily increasing its use of natural gas. For example, for 2020, the US Energy Information Administration estimates that about 36% of US electricity will be generated using natural gas and about 23% will be generated using coal. As recently as 2010, coal generated about twice as much US electricity as natural gas. This fuel shift is likely to continue for many reasons including expectations for low-cost natural gas. This ongoing shift increases the importance of capturing CO2 from gas-fueled generation as it becomes a progressively larger fraction of US power generation. This shift from coal to gas has reduced overall CO2 emissions from the US electricity sector because natural gas-fueled electricity generation emits less than half of the CO2 per kWh compared to coal. 

Supporting new, high-impact energy and environmentally friendly initiatives has been a regular and important component of US tax policy. A production tax credit (PTC) of up to 2.3 cents per kWh (now reduced) was available for electricity generated by wind. Solar photovoltaic projects receive a 30% investment tax credit (ITC). These tax credits, along with state-level renewable performance standards, have significantly increased investment in renewables and supported their growth in the electricity generation sector. A similar opportunity now exists for supporting accelerated installation of large-scale Carbon Capture and Storage (CCS) in the US electric generation industry. Section 45Q of the US tax code represents a first of a kind step for covering the costs of using CCS with power generation. It provides a $50 per metric ton tax credit for captured CO2 stored in geological formations and a $35 per metric ton tax credit for captured CO2 used and stored with enhanced oil recovery (CO2-EOR). However, these tax credits contain a series of limitations including a fast approaching “commence construction” deadline, and a  limited number of years for claiming the tax credit. 

This presentation will discuss the status of CCS in the power section including capture and storage technology, Class VI UIC permitting, and current incentives for commercial deployment such as the Section 45Q tax credits. 

Speaker Biography: Richard Esposito, Southern Company
Richard has 30 years of experience in the electric utility industry and currently serves as the Program Manager of Energy & Geosciences in the Department of Research & Development at Southern Company. He has a strong academic background with a B.S. and M.S. degree in Geology from Auburn University and a Ph.D. in Engineering from the University of Alabama at Birmingham. Prior to Southern Company he worked at the Alabama Department of Environmental Management as an environmental regulator. 

In addition to his primary employment at Southern Company he serves on the research faculty and as a graduate student advisor in the Department of Mechanical Engineering at UAB. He is the President of the Alabama Geological Society, Vice Chair of the Energy Division of the Geological Society of America (GSA), and serves on the Executive Committee for the International Energy Agency (IEA) GHG program.  He has published extensively and lectured internationally on a wide range of energy related issues.

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