Powering Strong Communities

DOE Agrees to Fund Carbon Capture Project Tied to SMUD

A carbon capture project that has a long-term commercial relationship with California public power utility Sacramento Municipal Utility District is one of three projects that is set to receive funding from the Department of Energy.

The Sutter Decarbonization Project will demonstrate and deploy a commercial-scale carbon capture system at the Sutter Energy Center, a 550-megawatt natural gas combined-cycle power plant.

SMUD has said that the project will provide tangible benefits to its customers, which include disadvantaged and under-resourced communities, and that it will be a partner in targeted outreach and two-way engagement with traditionally excluded communities.

The project will then transport the CO2 and sequester it permanently and safely more than a half a mile underground in saline geologic formations.

The project will be the first in the world to deploy an air-cooling system at a carbon capture facility, which will eliminate the use of cooling water and significantly minimize freshwater usage -- a critical concern of the local community.

Negotiation of a Project Labor Agreement is underway and the project plans to engage with local and statewide labor organizations and educational institutions to secure qualified and highly skilled craft labor. The project also plans to negotiate a robust Community Benefits Agreement. 

The DOE’s Office of Clean Energy Demonstrations in December announced up to $890 million in funding for three projects to demonstrate technologies designed to capture, transport, and store carbon emissions.

The federal cost share for the California project is up to $270 million and the prime contractor is Sutter CCUS LLC, a subsidiary of Calpine.

Details on the other projects to receive funding are as follows:

  • Baytown Carbon Capture and Storage Project: Baytown, Texas: The Baytown Carbon Capture and Storage Project plans to capture CO2 from the Baytown Energy Center, a natural gas combined-cycle power plant. The CO2 will be transported using new and existing pipelines and sequestered in storage sites on the Gulf Coast. The project is evaluating the use of greywater cooling to minimize freshwater consumption by reusing wastewater. Calpine leads this project and has partnerships with Minority-Serving Institutions to support equitable job access and workforce development. Calpine plans to develop a Community Benefits Agreement and will include third party monitoring and validation of its Community Benefits Plan to support accountability and transparency. Federal Cost Share: Up to $270 million. Prime Contractor: Calpine Texas CCUS Holdings, an indirect subsidiary of Calpine.
  • Project Tundra: Center, North Dakota: Project Tundra is a carbon capture system that will be developed adjacent to the Milton R. Young Station, a coal-fired power plant near Center, North Dakota. The captured CO2 will be safely and permanently stored in saline geologic formations beneath and surrounding the power plant. Project Tundra is led by the project sponsors of Dakota Carbon Center East Project LLC, which includes Minnkota Power Cooperative and TC Energy, and was formed to facilitate investment in and development of Project Tundra. Federal Cost Share: Up to $350 million. Prime Contractor: Dakota Carbon Center East Project LLC (DCC East Project LLC) 

Selection for award negotiations is not a commitment by DOE to issue an award or provide funding. Before funding is issued, DOE and the applicants will undergo a negotiation process, and DOE may cancel negotiations and rescind the selection for any reason during that time. If awarded, OCED will evaluate these projects through a phased approach to project management that includes “go/no-go” decision points between each project phase. 

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