PPL finalizes award for up to $72 million in federal funding from U.S. Department of Energy's Office of Clean Energy Demonstrations

Rhea-AI Summary

PPL has finalized an agreement with the U.S. Department of Energy's Office of Clean Energy Demonstrations for an award of up to $72 million. This funding will support a groundbreaking carbon dioxide capture research and development project at PPL's natural gas combined-cycle generation facility in Louisville, Kentucky. The project, developed in partnership with the University of Kentucky, represents a total investment of over $100 million.

The first tranche of $4.9 million has been awarded to begin Phase 1 activities. This initiative aligns with PPL's strategy to enable new technologies that accelerate the transition to a clean energy future and achieve net-zero carbon emissions by 2050. PPL believes that reliable, dispatchable natural gas units will be essential in ensuring sufficient electricity supply while supporting the transition to renewables.

Positive

• Secured up to $72 million in federal funding for carbon capture R&D
• Received first tranche of $4.9 million to begin Phase 1 activities
• Total project investment exceeds $100 million
• Partnership with University of Kentucky for technology development
• Aligns with company's strategy for clean energy transition

Negative

• None.

Insights

Energy Policy Analyst

This $72 million federal funding award for PPL's carbon capture project is a significant development in the clean energy sector. It demonstrates the government's commitment to supporting innovative technologies that can help reduce carbon emissions from natural gas power plants. The project's total investment of over $100 million indicates a substantial financial commitment to advancing carbon capture technology.

The phased approach, starting with $4.9 million for Phase 1, allows for careful evaluation and progression of the project. This could potentially lead to more efficient and cost-effective carbon capture solutions for natural gas combined-cycle plants, which are expected to play a important role in maintaining grid reliability during the transition to renewables. If successful, this project could have far-reaching implications for the utility industry's efforts to achieve net-zero carbon emissions by 2050.

Environmental Technology Expert

The collaboration between PPL, the University of Kentucky and the DOE showcases a promising public-private partnership model for advancing clean energy technologies. This project is particularly noteworthy as it focuses on carbon capture for natural gas combined-cycle generation, an area that has received less attention compared to coal-fired plants.

The success of this project could be a game-changer for the utility industry. If carbon capture can be effectively implemented on natural gas plants, it would allow these facilities to continue providing reliable, dispatchable power while significantly reducing their carbon footprint. This aligns with the industry's need for flexible power sources to complement intermittent renewables. However, the challenge lies in scaling up the technology and making it economically viable for widespread adoption.

Financial Analyst

From a financial perspective, this federal funding significantly de-risks PPL's investment in carbon capture technology. The $72 million award covers a substantial portion of the $100 million total project cost, limiting PPL's direct exposure. This strategic move could position PPL favorably in a future carbon-constrained market, potentially enhancing its long-term competitiveness and shareholder value.

Investors should note that while the initial $4.9 million tranche for Phase 1 is modest, successful progression through subsequent phases could unlock the full $72 million award. This project demonstrates PPL's proactive approach to addressing climate-related risks and opportunities, which could positively impact its ESG profile and attract environmentally conscious investors. However, the long-term financial benefits will depend on the project's success and the future regulatory landscape for carbon emissions.

ALLENTOWN, Pa., Sept. 12, 2024 /PRNewswire/ -- PPL Corporation (NYSE: PPL) announced today it has executed an agreement with the U.S. Department of Energy (DOE) Office of Clean Energy Demonstrations (OCED) for an award up to $72 million to help fund a groundbreaking carbon dioxide (CO₂) capture research and development project at the company's natural gas combined-cycle generation facility in Louisville, Kentucky. OCED awarded PPL with the first tranche of funding – $4.9 million – to begin Phase 1 activities.

The carbon capture project – developed in partnership with the University of Kentucky and others – represents a total investment of more than $100 million and will be hosted at the Cane Run generating station jointly owned and operated by PPL subsidiaries Kentucky Utilities and Louisville Gas and Electric Company. OCED announced in February of this year that the DOE selected the project for award negotiations.

"Today marks another step forward in our strategy to enable new technologies that can help accelerate the transition to a clean energy future and close the gap to economy-wide, net-zero carbon emissions," said PPL President and Chief Executive Officer Vincent Sorgi. "We understand that delivering net-zero carbon emissions by 2050 will require faster action and commercialization of new technology than our industry has ever achieved, and it will require utilities leading the way on innovation.

"We are proud to take the lead in evaluating and piloting carbon capture technology on natural gas combined-cycle generation, and we're grateful for the DOE's support. Ultimately, we believe reliable, dispatchable natural gas units will be essential in the years ahead to ensure there's sufficient supply to meet electricity demand 24/7. Further, we believe natural gas can be a reliable partner in accelerating the transition to renewables while preserving reliability and affordability."

About the project

The system planned for Cane Run is designed to capture a portion of the CO₂ from the natural gas plant's flue gas using an advanced heat-integrated CO₂ capture technology. It's expected to capture more than 95% of the carbon emissions from up to 20 megawatts (MW) of the plant's 691 MW generating capacity, or up to 67,000 metric tons of CO₂ per year. That's equivalent to the annual CO₂ emissions of 16,000 gasoline-powered cars, according to OCED.

The demonstration project is an important step in assessing the future viability of utility-scale carbon capture technology on natural gas units. Current plans include the captured CO₂ being purified and beneficially reused in its entirety by a nearby industrial customer.

In addition to the University of Kentucky, collaborators on the project include the Electric Power Research Institute (EPRI); Kentucky State University; Visage Energy; and American Welding & Gas. Vogt Power International Inc., a Babcock Power Inc. subsidiary, and Siemens Energy, manufacturers of the Cane Run 7 Generating Station, are contributing technical support as part of the project team on integrating the new CO₂ capture system. Koch Modular Process Systems and others will support the design, fabrication and construction of the carbon capture unit.

Part of PPL's continued focus on clean energy R&D

The latest research initiative at Cane Run is one of more than 175 research and development projects that PPL is currently collaborating on with over 30 industry and academic partners. Projects range from accelerating low-carbon energy technologies to strengthening network resiliency and building the grid of the future.

PPL subsidiaries LG&E and KU have partnered with the University of Kentucky for nearly two decades on various carbon capture research projects and were founders of the university's carbon capture research program in 2006. Together with EPRI, the company and university deployed a pilot-scale carbon capture facility in 2014 at the KU E.W. Brown coal-fired generating station.

About PPL

PPL Corporation (NYSE: PPL), headquartered in Allentown, Pennsylvania, is a leading U.S. energy company focused on providing electricity and natural gas safely, reliably and affordably to more than 3.5 million customers in the U.S. PPL's high-performing, award-winning utilities are addressing energy challenges head-on by building smarter, more resilient and more dynamic power grids and advancing sustainable energy solutions. For more information, visit www.pplweb.com.

About the Office of Clean Energy Demonstrations

The U.S. Department of Energy's Office of Clean Energy Demonstrations (OCED) was established to accelerate clean energy technologies and fill a critical innovation gap on the path to achieving our nation's climate goals of net zero emissions by 2050. OCED's mission is to deliver clean energy demonstration projects at scale in partnership with the private sector to accelerate deployment, market adoption, and the equitable transition to a decarbonized energy system. Visit energy.gov/oced to learn more.

Note to Editors: Visit our media website at www.pplnewsroom.com for additional news about PPL Corporation.

Contact:

For news media: Ryan Hill, 610.774.4033 For financial analysts: Andy Ludwig, 610.774.3389

 

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SOURCE PPL Services Corporation

FAQ

What is the total amount of federal funding PPL (NYSE: PPL) has been awarded for its carbon capture project?

PPL has been awarded up to $72 million in federal funding from the U.S. Department of Energy's Office of Clean Energy Demonstrations for its carbon capture research and development project.

Where will PPL's carbon capture project be located?

The carbon capture project will be hosted at the Cane Run generating station in Louisville, Kentucky, which is jointly owned and operated by PPL subsidiaries Kentucky Utilities and Louisville Gas and Electric Company.

How much has PPL (NYSE: PPL) received as the first tranche of funding for its carbon capture project?

PPL has received $4.9 million as the first tranche of funding to begin Phase 1 activities of its carbon capture project.

What is the total investment value of PPL's carbon capture project?

The total investment value of PPL's carbon capture project exceeds $100 million, including the federal funding and the company's own investment.