Fed rate cuts 'no bearing' for CCUS: NET Power

Interest rate cut by the US Federal Reserve this week have "no bearing" on carbon capture, use and storage (CCUS) projects, according to the chief executive of power technology company NET Power, since most are still in the development phase.

The majority of CCUS projects are in the "pre-revenue" stage with companies that are still "more focused on the engineering" aspects, chief executive Danny Rice said on the sidelines of the Gastech conference in Houston, Texas, today.

The Fed on Thursday cut its target interest rate by 50 basis points, the first cut since 2020 and following an aggressive rate increase regimen to fight inflation. Lower interests rates lower borrowing costs for companies.

Rice said earlier in the day during a CCUS panel discussion there was still a need to "get capital costs down".

"Historically it would be challenging to deploy a new technology and scale into a flat or declining market, but ... we're talking about decarbonization for power generation," Rice said. "Power generation is growing globally."

CCUS projects and other carbon capture technologies have been repeatedly criticized by non-governmental organisations as an excuse for continued fossil fuel use, although the UN Intergovernmental Panel on Climate Change has backed the technology.

Rice stressed the importance of an "objective, physics-driven view" for policy regarding decarbonization, describing CCUS projects for gas-fired powerplants as the most cost-effective method to decarbonize power.

"People are going away from this exercise of 'what's clean or not'," Rice said. "What matters is the outputs. The affordability, the reliability, the carbon intensity."

By David Haydon