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The modern power grid faces significant challenges due to its aging infrastructure. Many components, such as transformers and transmission lines, are decades old, leading to higher maintenance costs, increased failure rates, and limited capacity to support modern energy demands and the integration of new technologies, such as renewable energy sources. Additionally, extreme weather events and heightened vulnerability to cyberattacks compromise the grid's reliability.
As we transition to new energy sources, the need for advancements in Green Molecule™ technologies, such as point source carbon capture has become essential and is now mandated to mitigate emissions from existing power plants and industries, ensuring a cleaner and more resilient grid. Carbon capture, particularly when integrated with reliable, low-emission energy sources like natural gas, is vital in addressing the gap left by renewables. Natural gas currently serves 40% of power demand and is expected to play a significant role in meeting future energy needs, especially in data centers and manufacturing. Integrating carbon capture with natural gas plants can further reduce emissions, making it a cornerstone of the future energy landscape.
In the U.S., total electricity demand remained flat for about 15 years, with sales to customers increasing only 1% from 3,765 terawatt hours (TWh) in 2007 to 3,806 TWh in 2021. However, this trend is reversing, driven by a resurgence in manufacturing and the growth of energy-intensive sectors like computer chip and battery production. For instance, Taiwan Semiconductor's (TSMC) flagship chip plant in Arizona will initially require 200 megawatts of power, while battery plants demand 20 to 37.5 kilowatt hours of electricity for every 1 kWh of storage capacity they produce.
The growth in demand is also evident in data centers. The International Energy Agency (IEA) forecasted in January that electricity consumption from data centers, artificial intelligence, and cryptocurrency could double by 2026. JP Morgan projects a 15% compound annual growth rate (CAGR) in data center power demand from 2023 to 2030, leading data centers to constitute 8% of total U.S. power demand by 2030, up from 3% currently. This increase will require about 47 GW of additional power generation capacity by 2030, met with a mix of 60% gas and 40% renewable sources.
The Environmental Protection Agency's (EPA) new carbon pollution standards, finalized in April 2024, mandate strict CO₂ emission limits for both new and existing power plants. Existing coal-fired power plants must capture nearly all their CO₂ emissions by 2032 or cease operations by 2039. Similarly, new natural gas-fired power plants operating more than 40% of the time must capture nearly all CO₂ emissions by 2032. These regulations underscore the importance of carbon capture and storage (CCS) and Green Molecule technology as a primary mitigation strategy.
Given the growing energy demand and the need for cleaner energy, point source carbon capture is essential. Carbon capture involves capturing carbon dioxide (CO₂) emissions directly from the source before they enter the atmosphere. This technology is critical for industries that rely heavily on fossil fuels, such as natural gas power plants, which are expected to support a significant portion of future energy needs.
Point Source Carbon Capture is distinct from other methods of reducing emissions or capturing carbon, such as carbon offsets and direct air capture, in its direct approach to addressing emissions at their source. While carbon offsets involve compensating for emissions by funding equivalent carbon dioxide saving projects elsewhere, and direct air capture involves removing CO₂ directly from the atmosphere, point source carbon capture targets the emissions before they are released. This makes point source carbon capture more efficient and effective in high-emission industries. According to the International Energy Agency (IEA), point source carbon capture can capture up to 90% of CO₂ emissions from industrial sources, making it a crucial technology for meeting stringent environmental standards and significantly reducing overall greenhouse gas emissions.
The EPA's standards are expected to drive significant demand for Carbon Capture and Sequestration (CCS) technology. The Inflation Reduction Act and the Bipartisan Infrastructure Law provide substantial tax incentives and funding to offset the costs associated with implementing CCS. This includes $2.5 billion recently announced for funding point source deployment and technology development. These incentives make CCS more financially viable for utilities, encouraging broader adoption of the technology. The EPA projects that these standards will result in a reduction of 1.38 billion metric tons of CO₂ through 2047, equivalent to the emissions from 328 million gasoline cars for a year.
Technological advancements in CCS are also crucial. Continuous improvements and cost reductions in CCS technology are essential to meet the EPA's emission reduction targets. Early projects in industries with high-purity CO₂ streams, such as ethanol production and natural gas processing, will lead the way through 2030. These projects will anchor the buildout of large-scale transport and storage infrastructure, laying the foundation for carbon management applications in other industries.
A notable example of innovation in the Green Molecule space is Cemvita, an Energy Capital Ventures® portfolio company, that utilizes synthetic biology to create custom microbes that absorb and convert greenhouse emissions and transform CO₂ into valuable products. This approach not only reduces emissions but also creates economic value from captured carbon, demonstrating the potential for technological advancements to drive both environmental and economic benefits.
By 2035, ammonia/hydrogen production and power generation are expected to dominate carbon capture capacity deployment, accounting for 33% of the announced capture capacity. Industries with lower-purity CO₂ streams will see cost declines supported by pilot and commercial demonstration projects. New gas power plants with carbon capture could become cheaper than unabated power in regions with high carbon prices, such as Germany.
The integration of point source carbon capture and other Green Molecule technology with natural gas power plants will be necessary for meeting future energy needs while reducing emissions. Despite the growth in renewables, natural gas remains a flexible and reliable energy source, essential for balancing supply fluctuations. As demand for electricity, especially from data centers, continues to rise, natural gas demand is expected to grow by 3% annually. To accommodate this growth, CCS technology must be widely implemented to capture CO₂ emissions from natural gas plants. By leveraging advancements in Green Molecule technology and capitalizing on economic incentives, the energy industry can meet regulatory demands while continuing to provide reliable power to consumers.