Under the US Inflation Reduction Act the 45Q Tax Credit has been increased. For a business building and operating a NET Power Plant which sequestrates its Co2 this will deliver a large revenue stream. Here is the detail.
45Q Tax Credit.
In the US Qualifying projects that employ carbon capture and sequestration are entitled to a tax credit of US$85 per ton of carbon dioxide captured. Or $60 where the Co2 is used for EOR. Generally this is to compensate companies for the additional cost of carbon capture.
For a NET Power plant there is no additional cost of carbon capture as it is built into the process(assuming a high efficiency. )However, they are still able to claim the credit. A single 300 Megawatt NP plant will capture approximately 820,000 tons of CO2 per year. This is circa $70 million worth of credit per year. For the first five years of the scheme this credit can be sold onto to a third-party . Otherwise the credit can be offset against a tax liability. If it cannot be offset then a 3 year carry back or 22 year carry forward appears to be available.
NP slides indicate that this will be nearly equivalent to the fuel cost for the plant. This is not a direct benefit to NP, but it makes the operator extremely competitive on price per megawatt hour for electricity. It should be noted that a US tax credit is a deduction from taxes owed not a reduction of a taxable amount.
At present the scheme is available for plants commencing construction by 1 Jan 2033 with a duration of 12 years. Beyond that date who knows?
These appear to be compelling numbers but please do your own research !
