Sutter Decarbonization Project Selected by Department of Energy for Major Demo Program

SUTTER COUNTY, CA (DECEMBER 14, 2023) – Today, Calpine announced that its Sutter Decarbonization Project has been selected by the Office of Clean Energy Demonstrations within the Department of Energy (DOE) to negotiate to enter into a cost-sharing agreement to build a commercial-scale carbon capture and storage (CCS) project that will capture and store up to 1.75 million metric tons of carbon dioxide each year. In a related announcement, DOE also selected Calpine’s carbon capture project at Baytown Energy Center in Texas. DOE’s selection of these projects validates and will accelerate Calpine’s program to advance the use of CCS infrastructure to produce clean energy. The parties expect to negotiate the terms of the agreements over the coming months.

Following on the success of several pilot programs focused on testing advanced CCS technologies, the DOE is administering the Carbon Capture Demonstration Projects Program to significantly improve the efficiency, effectiveness, environmental performance, and scale of CCS systems.

The Sutter Decarbonization Project will retrofit the Sutter Energy Center, an existing 550- megawatt natural gas combined-cycle energy facility located in Sutter County, California. Working together with ION Clean Energy’s post-combustion carbon capture technology and 1PointFive Sequestration LLC’s more than 50 years experience safely and securely storing CO2, the Sutter Decarbonization Project is critical to achieving California’s ambitious carbon neutrality goals while maintaining grid reliability and affordable customer rates.

“We are very pleased and honored that the DOE has recognized the quality of this project and the strength of Calpine’s CCS program,” said Thad Hill, CEO of Calpine Corporation. “We are looking forward to working with the DOE on finalizing the cost-sharing agreement and with our other stakeholders in progressing the development of the Sutter Decarbonization Project. Carbon capture is an important technology for decarbonizing the electricity sector and the economy. Calpine is very grateful for the commitment and support for the project by our stakeholders.”

Last summer, Calpine launched the first-in-California carbon capture demonstration with Project Enterprise at Los Medanos Energy Center in partnership with the DOE to study ION Clean Energy’s advanced CCS technology. This 18-month pilot, scheduled to run through 2024, will inform the implementation of CCS at Sutter Energy Center and provide a model for reducing carbon emissions at existing power plants by at least ninety-five percent.

“Calpine has long been a leader in California’s power generation market, having responded to the state’s need for new power generation in the early 2000s,” said Alex Makler, Senior Vice President, West Region of Calpine Corporation. “This project, along with Calpine’s recent battery storage projects and its longstanding geothermal power production, reaffirms that leadership as California continues to meet its commitment to a zero-carbon future.”

The Sutter Decarbonization Project is being developed in partnership and consultation with local stakeholders in Sutter County. As part of the development process, Calpine will continue robust efforts to provide local community benefits such as expanding the number of full-time local jobs, enhancing workforce development programs (including opportunities for organized apprentices), targeting procurement with diverse and small business enterprises, and working with local K-12 schools and Minority-Serving Institutions. These benefits reflect Calpine’s long-standing history and commitment to the communities in which Calpine operates.

“This project will equip Sutter County with infrastructure that is critical for California’s transition to cleaner energy,” said Karm Bains, Chairman, Sutter County Board of Supervisors. “We applaud the DOE and Calpine for partnering on a momentous CCS project in our community and look forward to working alongside Calpine to ensure robust community engagement throughout the development process.”

The Sutter Decarbonization Project is essential to achieving California’s 2045 net zero carbon emissions targets and supports the Sacramento Municipal Utility District’s (SMUD’s) 2030 Zero Carbon Plan, with a goal of zero emissions in its power supply by 2030.

“The Calpine Sutter Decarbonization Project holds tremendous potential to help accelerate carbon reduction, the transition to a clean energy future and support SMUD’s ambitious zero carbon goal,” said Paul Lau, CEO & General Manager of SMUD. “We know renewables like solar, wind and geothermal can get us 90% of the way to zero emissions, and we need innovative solutions like carbon capture and storage to help us get the rest of the way to zero while maintaining our world class reliability and low rates.”

Beyond the environmental benefits, responsible deployment of CCS creates skilled craft labor jobs. To ensure a proper transition for energy workers throughout the region, Calpine will enter into a Project Labor Agreement with the California State Building and Construction Trades Council.

“The State Building Trades and our affiliates have been vocal supporters of carbon capture and its critical role in meeting California’s clean energy goals,” said Chris Hannan, President of the California State Building and Construction Trades Council. “We are excited to see the Sutter Decarbonization Project become a reality and look forward to partnering with Calpine in a Project Labor Agreement to ensure the infrastructure is built to the highest standards by skilled women and men receiving middle-class sustaining wages and benefits. Clean energy jobs are the future, and we appreciate that Calpine recognizes that workers cannot be left behind.”