Phase 1 of Entropy’s Glacier CCS project (200,000 tonnes per annum (“tpa”) in two phases) has been running steadily since commissioning in July 2022, and the system performance has established a new global benchmark for efficiency. Capture rates from the 5.3% CO2 flue gas are generally between 90% and 95%. Runtime of the CCS equipment has averaged 98%, not including outages related to host plant maintenance and a series of planned reconfigurations for research and development (“R&D”). The project has achieved a specific reboiler duty of 2.4 GJ/tonne during extended periods of stable operations, with even lower numbers achieved intermittently. The compression, transportation and sequestration system is performing as designed, permanently storing all captured CO2 volumes at predicted conditions, and Entropy is generating compliance-based environmental performance credits.
Analysis of final project capital for Glacier CCS Phase 1 indicates that future projects are on-track to achieve a capital cost of C$475/tonne/annum (capture only, including inflation) for high-quality mid-sized projects, and lower for large projects. Once the R&D phase is complete, Entropy expects full-cycle operating costs (including capture, compression, transportation and storage) for Glacier Phase 1 will trend downwards from approximately C$30/tonne currently towards C$27/tonne. Based on these results, Entropy expects Phase 2 full-cycle operating costs will drop below C$22/tonne, and larger projects are expected to be lower.
Entropy would like to thank the many team members who have made the project successful, including the research and development team from the University of Regina, the engineering team from Entropy led by Brent Allardyce, James Martin and Rick Bower, the Entropy project team, and our strategic partners at Advantage and Brookfield Renewable.
Entropy’s Athabasca Leismer CCS project (440,000 tpa in two phases) has reached “shovel-ready” status. The next step for the project is to drill and test the local reservoir for injectivity; however, the disposal permit has been delayed while the province establishes regulations for the CO2 sequestration “hub” model. This permitting delay may result in the project being delayed by approximately three months as the end of the winter drilling season approaches. In an effort to support Alberta’s emissions reduction objectives, we are continuing to engage with regulators to ensure effective local carbon storage policy, including geological suitability, permanence, access rights and monitoring while ensuring that emitters are not forced into constrictive, uneconomic storage solutions.
The Athabasca Leismer project has received significant financial support from the Alberta government through Emission Reduction Alberta’s (“ERA”) Carbon Kickstart Grant and is expected to be fully eligible for the federal CCS investment tax credit (“ITC”) and carbon contract-for-differences (“CCFD”) structure, although the federal programs have not yet been substantially enacted.
Now that Entropy’s advanced technology has been proven at Glacier, Entropy has begun expanding its team with a focus on commercial growth in the United States. Entropy believes the highly effective CCS policies contained in the Inflation Reduction Act of 2022 (“IRA”), with a government-guaranteed carbon price of US$85/tonne (~C$115/tonne), will lead to faster deployment of CCS technology.
Entropy is pleased to announce its first memorandum of understanding in California with California Resources Corporation (“CRC”). The project involves Entropy providing technology, engineering and development expertise to decarbonize gas-fired boilers that are used in field operations. Upon completion, the project is expected to capture and sequester approximately 400,000 tpa.
Entropy’s near-term projects include approximately 1.5 mmtpa of post-combustion projects being developed in Canada and the United States, including Glacier (200,000 tpa), Athabasca Leismer (440,000 tpa), the CRC project (400,000 tpa) and an additional Alberta project on turbines and boilers (450,000 tpa). All of these projects have the potential to advance to procurement and construction during 2023 and represent first-in-kind deployment of CCS technology. Mid-term and long-term projects remain well in excess of 10 mmtpa.
Entropy is continuing to develop two large-scale sequestration hubs in Alberta. At the Bow Valley Carbon Hub, Entropy and its partner have begun investment in geologic and geophysical evaluations to meet the near-term requirements of a joint CCS project under development nearby. At the Grande Prairie Net Zero Gateway, Entropy and partners are kicking off geological evaluation work and scoping potential projects in the region.
Entropy is pleased to introduce EntropyIQTM, a proprietary emissions tracking, processing and reporting software platform that is a complete solution for all CCS measurement, monitoring and verification (“MMV”) data. Developed by Entropy as a necessity for commercial CCS projects, this powerful proprietary platform creates a digital twin of emitting facilities to gather emissions and operating data directly from multiple control systems. The platform calculates a full suite of performance metrics and assembles a suite of auditable MMV reports for export and analysis. The subscription-based, fully operational platform is expected to satisfy the growing industry need for data management, emissions tracking, reporting and carbon credit generation, and is expected to complement Entropy’s base business as a CCS developer.
Entropy is pleased to announce that Trevor MacFarlane has joined the board of directors. Mr. MacFarlane brings over 25 years of energy infrastructure experience including areas of expertise in strategic planning, operational risk management and technology. He holds a Masters in Metallurgical Engineering from Queen’s University and completed advanced leadership programs, including a QuantumShift Fellow, from the Ivy School of Business. Mr. MacFarlane has previously held responsibility for overall corporate strategy, leadership and vision, and business performance for companies with an enterprise value of over $1 billion and 1,000+ employees. Mr. MacFarlane currently sits on the Board of the Canadian Energy Pipeline Association (CEPA) Foundation as well as an independent director for Skipper NDT, a technology firm focused on the performance of energy infrastructure, based in France.
Entropy is also pleased to announce that Jason Chadwick has been promoted to Chief Commercial Officer. Jason joined Entropy in 2021 as Vice President, Business Development and has played a critical role in developing partnerships with emitters and the commercial frameworks that will allow Entropy to develop projects in multiple jurisdictions around the world.