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FAQs

What is Project Diamond Vault?

Project Diamond Vault is a carbon capture and sequestration (CCS) facility to be located at Cleco’s Brame Energy Center near Boyce, La. The facility will (i) use a chemical process to remove 95% of the CO2 produced by the combustion of fuel in Cleco’s Madison 3 electric generation unit, (ii) compress the CO2 and (iii) store it permanently in deep geological formations located directly beneath the Brame site. Cleco also expects to permanently store CO2 in these geological formations for third parties on a fee basis. CO2 stored for third parties may be generated by separately owned Direct Air Capture (DAC) facilities located at the Brame site or delivered to the Brame Site by pipeline.

Why Is Madison 3 a Good Candidate for CCS?

Madison 3 is a 600 MW electric generation unit fueled 70% by petroleum coke (a waste product of oil refining) and 30% by Illinois Basin coal. Madison 3 incorporates Circulating Fluidized Bed technology, an advanced solid fuel combustion technology, and a circulating dry scrubber as well as air quality control systems including selective non-catalytic reduction and fabric filter. These measures currently achieve very low levels of SO2, NOX, and particulate matter emissions relative to other solid fuel units in the electric industry.The unit uses circulating fluidized bed combustion technology which means that it has much lower sulfur, NOX and particulate matter (PM) emissions relative to other solid fuel units in the electric industry.

Madison 3 has these advantages for CCS development:

  • Relatively new plant already having relatively low sulphur emission rates (required for best carbon capture efficiency)
  • Large site with room for new construction
  • Easy availability of electricity and steam for carbon capture process
  • Most importantly, there are geological formations suitable for permanent carbon sequestration directly below the Madison 3 unit. No need for expensive pipeline transportation of CO2

Why is the project being announced now?

Cleco is pleased to announce that Project Diamond Vault is the beneficiary of a $9 million congressional earmark for the performance of a Front End Engineering and Design (FEED) study which was included in the recently enacted 2022 Omnibus Appropriations Bill. For major construction projects, a FEED study serves as the basis for project contracting and construction. The appropriated funds will help to defray the estimated $12 million cost of the FEED study and will be administered by Louisiana Economic Development (LED). The funding and commencement of a FEED study for Project Diamond Vault is a major step in making the project a reality.

Why is the Project called Diamond Vault?

t’s a metaphor. Diamonds are precious jewels made deep within the earth. Project Diamond Vault won’t literally make diamonds. (At the planned temperatures and pressures, sequestered CO2 will be in the form of a sludge which will bond with surrounding rock over time.) But we do believe that gathering and sequestering carbon in geological vaults directly below the Brame Energy Center will have precious value to Cleco, our ratepayers, and the state of Louisiana as a whole.

To us, the project is a diamond.

What is the timing for the project?

The FEED study for Project Diamond Vault has already begun and will be completed by the end of 2023. Permitting is expected to be complete some time during the second half of 2025. Construction is expected to begin by the end of 2025, and commercial operation of Project Diamond Vault is planned to occur no later than 2028.

How much will the project cost?

Project Diamond Vault is projected to have a capital cost of approximately $900 million.

Who will pay for the project?

We expect the capital cost to be funded by investors receiving production tax credits under Section 45Q of the Internal Revenue Code and some combination of Department of Energy grants, private equity investment, and capital contributions by Cleco. Discussions with investors are underway.

45Q tax credits will also fund the operating expenses of the project (including the cost of electricity and steam consumed by the project and generated by Madison 3).

We do not expect Project Diamond Vault to result in any rate increase to our customers.

What will be the economic benefits of the project?

An impact study by LSU economist Dr. Loren Scott estimates that, when economic multiplier effects are taken into account, Project Diamond Vault during the construction period will (i) create an average of approximately 2900 jobs each year, (ii) inject approximately $2.7 billion in increased sales and household earnings into the Louisiana economy, and (iii) produce approximately $50 million in increased state tax revenues. Most of these benefits will be centered on central Louisiana and Rapides Parish. Permanent employment at the Brame site will increase by 30-40 positions.

If we are successful in developing Project Diamond Vault into a CO2 storage hub for third parties, the direct economic benefits and intangible benefits of the project (for example the attraction of new technical skills to central Louisiana) will be much larger.

Finally, we are in discussions to sell the electric output of Madison 3 after completion of the project at a premium to third parties who need 24/7 clean energy for compliance with low carbon fuel standards and other purposes. If we are successful in this effort we will be able to substantially reduce our rates and improve customer affordability.

Why isn’t Cleco pursuing solar resources in place of the project?

We strongly believe in the value of solar energy. In fact, we are aggressively pursuing solar resources right now and hope to have an announcement on that topic by the end of 2022.

However, there is a public misperception that the U.S. electric system can achieve net zero carbon emissions based on wind and solar resources alone. Even assuming the widespread availability of storage solutions such as batteries (which do not yet exist as economic substitutes for generation), the vast majority of knowledgeable analysts believe that fossil fuel electric generation plants will be needed for decades in order to maintain grid reliability. Because fossil fuel use will continue, Princeton University’s Net-Zero America study (the most credible analysis of climate mitigation strategies to date) concludes that significant carbon capture will be required in all six of the plausible scenarios for achieving net zero emissions of greenhouse gasses by 2050. Five of the six scenarios will require geological carbon sequestration as well (concentrated in the Gulf Coast area). Project Diamond Vault is consistent with those scenarios and will help to ensure that Cleco reaches its own net zero goals.