Proposed Calpine carbon capture project

What is the proposed Sutter CCS Project and what is SMUD’s role?

The proposed Sutter CCS Project, led by Calpine and its technology experts, will add carbon capture and storage (CCS) technology to Calpine’s existing natural gas-powered Sutter Power Plant. In doing so, it will add a new, 15-mile carbon transport pipeline to a nearby underground storage area. The pipeline will leverage existing rights-of-way. The Sutter Power Plant, located in Sutter County, is owned and operated by Calpine. SMUD would be a partner in a Department of Energy (DOE) grant application for the project and would buy energy from the plant through a power purchase agreement (PPA). Calpine is the project developer and carries the financial responsibility and risks for the project.

 

How will SMUD protect itself and its customers from unforeseen issues?
The proposed Sutter CCS Project will undergo a robust permitting process that will address any potential environmental or safety issues. The SMUD Board would also be asked to approve a PPA, which would include safeguards from unexpected issues such as high cost, poor performance and/or safety issues. SMUD’s goal remains the same -- to continue providing safe, reliable, cost-effective and clean power to help us achieve our 2030 Zero Carbon goal.

 

How would the addition of CCS affect future renewable plans in SMUD’s 2030 Zero Carbon Plan (ZCP)?

SMUD remains committed to the range of renewable energy resources identified in the 2030 Zero Carbon Plan. This proposed project is in addition to everything we are already doing including supporting customer solar and storage, and exploring and investing in emerging clean technologies such as long duration energy storage and green hydrogen. Furthermore, we are committed to developing new customer programs such as Virtual Power Plants and other load flexibility programs to help reduce the need for natural gas generation. There is no single solution to achieving our zero-carbon goal. We will need to utilize all options to ensure an affordable, reliable and equitable transition to zero carbon.

 

How would this project support SMUD’s 2030 Zero Carbon Plan and how does it provide flexibility?

The proposed Sutter CCS Project would provide a short-term, low-carbon, reliable generation resource that is not weather dependent. Its consistent operation will allow us to purchase low carbon power, while reducing our reliance on our natural-gas plants. While we think we can achieve 90% of our zero-carbon goal with current technologies, the proposed project has potential to help us reduce the last 10% of our carbon emissions, while newer technologies like long-duration energy storage and hydrogen are brought to scale. This project would allow more flexible use of the varied resources in our portfolio today.

 

How will SMUD engage the public and ensure transparency? What is the project timeline?

SMUD has already begun to engage in a comprehensive public process and will continue to engage stakeholders, and communicate project information at board meetings, events and on its website. Calpine is also engaging in its own public process with Sutter County and Yuba City communities, local educational institutions and through public events. The current timeline allows for ongoing public engagement and feedback through the end of 2024, as well as continued progress reporting during the biannual ZCP update with SMUD’s Board and the public:

• March 15: SMUD Board meeting to start the public process and review the CCS opportunity.
• May 2: SMUD-led public workshop with Calpine and its partners, industry experts, and SMUD staff.
• May 4: Calpine-led public workshop in Yuba City.
• May 17: CCS Policy, California focused CCS information, project details presented to SMUD Board.
• May 18^: Board decision on DOE grant application partnership and memorandum of agreement (MOA) to begin negotiating contract terms.
• Q4 2023: DOE grant award decision.
• Q1-Q2 2024: SMUD Board meeting to review project contract information and approval of a Power Purchase Agreement.
• 2024-2027: Project updates to SMUD Board and public as part of the biannual ZCP update.
• 2027: Calpine expects the project to be online.

 

What key federal and state regulations will Calpine and its partners need to follow in developing the Sutter CCS project?

Calpine has a long history of developing clean energy technologies and working with local, state and federal regulators. The safe deployment of carbon capture and storage requires an extensive environmental and regulatory review on both the state and federal levels.

The California Energy Commission (CEC) has authority over the Sutter Power Plant and is the lead CEQA agency that will conduct the environmental review for the project. Calpine is committed to working through and meeting all the requirements of the CEQA process to reduce all potential environmental impacts.

The new carbon transport pipeline is required to meet strict federal and state standards for the design, operation, siting and maintenance needed to protect public, and environmental health and safety.

In addition to state regulations, the proposed project will be subject to federal permitting with EPA Region IX for its injection well. The Class VI well application and permitting process is designed to protect drinking water resources and reduce the risk of malfunctions or leaks. The project will need to get a Class VI permit to operate.

Additionally, the project will follow any future state and federal legislation. According to Senate Bill 905, the California Air Resources Board is expected to pass new regulations prior to the date the project would come online. Calpine is tracking these developments closely and will work with the relevant state partners to ensure project compliance.

 

How will Calpine and its technology experts achieve 95-98% of carbon capture and ensure permanent underground storage without leaks? How will SMUD address the remaining 5% of carbon emissions?

Multiple project-specific studies have been completed and others are underway to ensure a successful capture rate of at least 95%. The technology used in this project from ION Clean Energy has already been demonstrated in a lab setting and will be further demonstrated at Calpine’s Los Medanos Energy Center pilot facility in Pittsburg, CA (expected to achieve over 95% of carbon capture). Independent studies from Lawrence Livermore National Laboratory (LLNL) and Black & Veatch (B&V) have identified an excellent storage area with multiple layers of rock formations and low permeability, which protects against leakage. The carbon would be safely and permanently stored within the pores of the rock itself, like water in a sponge, not within an open space or cave.

The proposed Sutter CCS Project is unique because of its work with industry-leading partners including LLNL, GTI and Stanford University researchers. SMUD plans to investigate opportunities and work with Calpine to offset the remaining 5% of carbon emissions at the Sutter Power Plant. These options could include exploring carbon offsets, investing in additional renewables and/or electrification measures, or other carbon reducing measures.

 

Will the GHG reductions from the project be additive (i.e., will the project avoid creating more emissions than it can reduce)?

The plant will operate below existing permit levels and no new GHG emission sources will be created from the proposed Sutter CCS Project. Furthermore, the project will reduce current plant emissions with additional planned upgrades. The project will use energy directly from the plant to operate the carbon capture technology. The carbon capture technology will be applied to all carbon emissions from electricity generation at the Sutter Power Plant, effectively capturing and storing about 95-98% of plant carbon emissions.

 

What local air quality impacts, if any, will the project have?

Based on current studies, the plant will operate below existing permit levels. Calpine will conduct air modeling to determine and report potential air quality impacts according to regulatory requirements. Calpine is looking to upgrade the existing plant to increase its efficiency and further reduce emissions. Calpine remains committed to ensuring the Sutter CCS Project addresses local emissions concerns.

 

What other environmental impacts could the project have on the local area, including water quality, soil quality, and light/noise pollution?

The project is not expected to impact water or soil quality. The carbon will be safely, securely and permanently stored substantially deeper than groundwater, and the project will follow multiple state and federal regulations that protect drinking water and soils. The project will also use continuous monitoring at many levels underground that can detect potential issues years before negative impacts could occur. Some increase in light pollution from the project is expected due to new safety light standards required on tall structures. No additional noise pollution would result from the project.

 

How will the project ensure public safety and reduce potential risk from earthquakes or leaks?

The project will be designed with safety as the top priority, and extensive and ongoing monitoring will take place throughout operation. A risk assessment will be conducted on the project’s storage location under the Class VI permitting process and verified with a test well under a DOE grant. The project includes pipeline monitoring, carbon injection monitoring, storage monitoring, earthquake monitoring and water quality monitoring. Calpine is also engaging the local Sheriff’s office, fire department, and community members to ensure there are adequate resources and knowledge to provide a rapid response in case of any potential incidents.

 

Will the project require additional water to operate than a conventional gas-fired plant?

In response to continued concerns around water use in agricultural areas of California, Calpine has elected to use air cooling technology for the project, so there will be no increase in water use at the plant.

 

Will the project benefit the local economy and community?

As the project developer, Calpine is committed to enacting a community benefits plan consistent with the Department of Energy’s published best practices. This is in line with the original Community Benefits Agreement established during the initial development of the Sutter Energy Center, which provided financial support to the levee district. The new plan encompasses stakeholder and community engagement; expanded diversity, inclusion, accessibility, and equity practices; tracking all impacts; and supporting workers' rights. Additionally, Calpine is working with local educational institutions to provide internships and apprenticeships to foster the transition to a clean energy economy in the region. Furthermore, consistent with Calpine-developed facilities in California, the Sutter CCS Project will be built under a Project Labor Agreement. Unionized labor will be used whenever possible during construction.