“It’s one piece of a puzzle in this broad fight against the climate change.” Photo via Getty Images

Power plants and industrial facilities that emit carbon dioxide, the primary driver of global warming, are hopeful that Congress will keep tax credits for capturing the gas and storing it deep underground.

The process, called carbon capture and sequestration, is seen by many as an important way to reduce pollution during a transition to renewable energy.

But it faces criticism from some conservatives, who say it is expensive and unnecessary, and from environmentalists, who say it has consistently failed to capture as much pollution as promised and is simply a way for producers of fossil fuels like oil, gas and coal to continue their use.

Here's a closer look.

How does the process work?

Carbon dioxide is a gas produced by burning of fossil fuels. It traps heat close to the ground when released to the atmosphere, where it persists for hundreds of years and raises global temperatures.

Industries and power plants can install equipment to separate carbon dioxide from other gases before it leaves the smokestack. The carbon then is compressed and shipped — usually through a pipeline — to a location where it’s injected deep underground for long-term storage.

Carbon also can be captured directly from the atmosphere using giant vacuums. Once captured, it is dissolved by chemicals or trapped by solid material.

Lauren Read, a senior vice president at BKV Corp., which built a carbon capture facility in Texas, said the company injects carbon at high pressure, forcing it almost two miles below the surface and into geological formations that can hold it for thousands of years.

The carbon can be stored in deep saline or basalt formations and unmineable coal seams. But about three-fourths of captured carbon dioxide is pumped back into oil fields to build up pressure that helps extract harder-to-reach reserves — meaning it's not stored permanently, according to the International Energy Agency and the U.S. Environmental Protection Agency.

How much carbon dioxide is captured?

The most commonly used technology allows facilities to capture and store around 60% of their carbon dioxide emissions during the production process. Anything above that rate is much more difficult and expensive, according to the IEA.

Some companies have forecast carbon capture rates of 90% or more, “in practice, that has never happened,” said Alexandra Shaykevich, research manager at the Environmental Integrity Project’s Oil & Gas Watch.

That's because it's difficult to capture carbon dioxide from every point where it's emitted, said Grant Hauber, a strategic adviser on energy and financial markets at the Institute for Energy Economics and Financial Analysis.

Environmentalists also cite potential problems keeping it in the ground. For example, last year, agribusiness company Archer-Daniels-Midland discovered a leak about a mile underground at its Illinois carbon capture and storage site, prompting the state legislature this year to ban carbon sequestration above or below the Mahomet Aquifer, an important source of drinking water for about a million people.

Carbon capture can be used to help reduce emissions from hard-to-abate industries like cement and steel, but many environmentalists contend it's less helpful when it extends the use of coal, oil and gas.

A 2021 study also found the carbon capture process emits significant amounts of methane, a potent greenhouse gas that’s shorter-lived than carbon dioxide but traps over 80 times more heat. That happens through leaks when the gas is brought to the surface and transported to plants.

About 45 carbon-capture facilities operated on a commercial scale last year, capturing a combined 50 million metric tons of carbon dioxide — a tiny fraction of the 37.8 gigatonnes of carbon dioxide emissions from the energy sector alone, according to the IEA.

It's an even smaller share of all greenhouse gas emissions, which amounted to 53 gigatonnes for 2023, according to the latest report from the European Commission’s Emissions Database for Global Atmospheric Research.

The Institute for Energy Economics and Financial Analysis says one of the world's largest carbon capture utilization and storage projects, ExxonMobil’s Shute Creek facility in Wyoming, captures only about half its carbon dioxide, and most of that is sold to oil and gas companies to pump back into oil fields.

Future of US tax credits is unclear

Even so, carbon capture is an important tool to reduce carbon dioxide emissions, particularly in heavy industries, said Sangeet Nepal, a technology specialist at the Carbon Capture Coalition.

“It’s not a substitution for renewables ... it’s just a complementary technology,” Nepal said. “It’s one piece of a puzzle in this broad fight against the climate change.”

Experts say many projects, including proposed ammonia and hydrogen plants on the U.S. Gulf Coast, likely won't be built without the tax credits, which Carbon Capture Coalition Executive Director Jessie Stolark says already have driven significant investment and are crucial U.S. global competitiveness.

All three of Intersect Power's storage systems — Lumina I, Lumina II, and Radian — are expected to be online this year. Photo courtesy of Intersect

Houston company secures $837M for trio of Texas energy storage projects

power move

Houston-based clean energy company Intersect Power has wrapped up $837 million in financing for the construction and operation of three standalone battery energy storage systems in Texas.

The money came in the form of debt financing, construction debt, and tax equity. The projects qualify for tax credits under the federal Inflation Reduction Act. Backers of the financing include Deutsche Bank, Morgan Stanley, and affiliates of HPS Investment Partners.

All three storage systems — Lumina I, Lumina II, and Radian — are expected to be online this year. Each system will be capable of storing 320 megawatts of solar power with a two-hour duration.

“Batteries will be a vital part of the energy transition and are the perfect complement to the billions of dollars of solar generation that we are building in California and Texas,” Sheldon Kimber, founder and CEO of Intersect, says in a news release.

Kimber says the storage systems will help Intersect Power triple the size of its portfolio over the next three years.

Intersect’s portfolio features 2.2 gigawatts of solar projects that are already operating, and 2.4 gigawatt hours of storage being operated or built. The company was founded in 2016.

Intersect recently signed a deal with Tesla Energy for 15.2 gigawatt hours of Megapack battery energy storage systems. The contract, which will deliver systems for Intersect projects in Texas and California, ends in 2030.

Empact’s goal is to help energy companies maximize the tax credits for their clean energy projects. Photo courtesy of Empact

Houston software company equips green project developers with IRA compliance tools

Tax credits, anyone?

A Houston company has an update to its first-of-its-kind software to assist emerging technology and energy companies with Inflation Reduction Act Energy Community Bonus Credit compliance management and reporting requirements for renewable energy projects.

Empact Technologies has released a software update that incorporates support for the latest IRA Energy Community Bonus management and reporting requirements. The new software is provided at no additional cost to existing Empact clients, and is available to qualified communities through a free trial via Empact’s website.

Empact’s goal is to help energy companies maximize the tax credits for their clean energy projects.

“Empact is the first (and only) company that provides technology and services to help the project developers qualify for and ensure compliance with all of those IRA tax incentive compliance requirements,“ CEO Charles Dauber tells EnergyCapital. “We work with project developers of solar, energy storage, carbon capture and sequestration, and other projects in ERCOT and around the country to manage compliance for the PWA, domestic content, and energy community compliance requirements and make sure they have all of the documentation required to prove to the IRS that these tax credits are valid.”

The software is the first in the industry to incorporate the most recent energy community guidelines released by the U.S. Department of the Treasury and the Internal Revenue Service, known as Notice 2024-48. These guidelines outline Energy Community Bonus qualification requirements for the “Statistical Area Category” and the “Coal Closure Category” in Notice 2023-29.

Empact’s platform will provide tax incentive compliance management for all three types of credits, which will be covered in the IRA’s estimated $1.2 trillion in tax incentives. The credits include a base energy project tax incentive (30 percent) for projects that meet prevailing wage and apprenticeship requirements, a domestic content tax adder (10 percent), and an energy community tax adder (10 percent). Notice 2024-48 is able to be used by developers to confirm project qualification for Energy Community Bonus opportunities.

Empact will support clients on eligibility requirements, manage compliance documentation and verification requirements.

“The IRA is considered the greatest and biggest accelerator for clean energy in the U.S.,” Dauber says. “The IRA provides significant tax incentives for developers of solar, energy storage, wind and other clean power technologies, as well as energy transition projects such as carbon capture and sequestration, hydrogen, biofuels and more.”

According to Empact, the way the IRA works is that developers of projects can “generate” tax credits based on meeting certain project requirements. There are three main factors in play:

  1. The foundational element of the tax credits provides a 30 percent tax credit of the project cost if the project meets requirements related to ensuring a fair wage for construction workers and utilizing a certain amount of apprentices on the project (called Prevailing Wage and Apprenticeship). The project developer (all the EPC and all contractors) must provide documentation that every worker has been paid correctly and that all apprenticeship requirements have been met. Some projects have hundreds of workers from 10-plus contractors every week.
  2. The second tax credit relates to the project utilizing steel and iron and other “manufactured products” such as solar modules, that are made in the U.S. If the project meets the “domestic content” requirements, it is eligible for another 10 percent tax credit. Project developers have to prove the products they use are made in the U.S. and there are calculations that must be done to meet the threshold that goes up every year.
  3. The third tax credit is related to the location of the project. The government is trying to incentivize project developers to put projects in locations with high unemployment, or sites that have existing power generation facilities, or are in areas that used to be coal communities. That tax incentive is called “Energy Communities” and provides an additional 10 percent tax credit for the project developers. To qualify for that tax credit, the developer must provide proof that the project is located in an energy community location.

Companies that remain in compliance by using the software will see immediate benefits, and the clean energy industry as a whole will benefit from Empact’s facilitation of tax credit utilization.

“If a developer does this all correctly, they can qualify for tax credits equal to 50 percent of the cost of the project which is an enormous benefit to getting more projects built and encouraging a balanced energy program in the U.S.” Dauber says. “For example, a 100MW solar farm may cost $100 million, and if they meet all of the criteria, they can qualify for $50 million in tax incentives. The same calculations work for carbon capture, hydrogen and other projects as well although there are some slight differences.

Last August, Stella Energy Solutions, a utility-scale solar and storage developer, entered into a multi-year agreement with Empact to use the platform to manage Stella's IRA tax incentives on all its projects for the next five years.

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Houston AI energy forecasting company lands investment from Samsung Ventures

funding for forecasts

Amperon, a Houston-based AI-powered forecasting solutions company, has received an investment for an undisclosed amount from Samsung Ventures, the corporate venture arm of Samsung Group.

According to Amperon, the funding will be put toward the company's global growth and next-generation product development. Samsung Ventures invests in emerging businesses developing technologies for the AI, advanced devices and energy-related sectors.

“Samsung Ventures’ investment is a strong validation of our mission to transform the way energy is forecasted and traded,” Sean Kelly, CEO and co-founder of Amperon, said in a news release. “Samsung’s global footprint and leadership in semiconductors, data infrastructure, and AI acceleration make them a natural fit as we expand Amperon’s reach into energy-intensive sectors like data centers. Their track record of scaling next-generation technologies aligns perfectly with our vision to build a more intelligent, resilient, and data-driven energy system.”

Amperon was founded in 2018. Its AI models combine real-time weather, consumption and market data for energy retailers, utilities and independent power producers.

Last year, the company launched its weather-informed grid demand Mid-Term Forecast (MTF), which provides users with data on electricity demand up to seven months in advance. It also secured strategic investments from Acario, the corporate venture capital and innovation division of Tokyo Gas, as well as National Grid Partners, the venture investment and innovation arm of National Grid (NYSE: NGG).

After expanding into Europe in 2024, the company has continued to see international growth, and currently operates in the U.S., Canada, Mexico, Australia, Europe and the Middle East.

“Amperon has demonstrated strong technical capabilities and global traction in a rapidly evolving energy landscape,” a spokesperson for Samsung Ventures added in the release. “Their ability to forecast and model real-time energy data at global scale positions them as a key enabler of smarter energy systems and climate resilience. We are pleased to invest in a company developing technologies that support a more sustainable and digitized world.”

Solar surpasses coal to become ERCOT’s third-largest power source in 2025

by the numbers

Solar barely eclipsed coal to become the third biggest source of energy generated for the Electric Reliability Council of Texas (ERCOT) in 2025, according to new data.

In 2024, solar represented 10 percent of energy supplied to the ERCOT electric grid. Last year, that number climbed to 14 percent. During the same period, coal’s share remained at 13 percent.

From the largest to smallest share, here’s the breakdown of other ERCOT energy sources in 2025 compared with 2024:

  • Combined-cycle gas: 33 percent, down from 35 percent in 2024
  • Wind: 23 percent, down from 24 percent in 2024
  • Natural gas: 8 percent, down from 9 percent in 2024
  • Nuclear: 8 percent, unchanged from 2024
  • Other sources: 1 percent, unchanged from 2024

Combined, solar and wind accounted for 37 percent of ERCOT energy sources.

Looking ahead, solar promises to reign as the star of the ERCOT show:

  • An ERCOT report released in December 2024 said solar is on track to continue outpacing other energy sources in terms of growth of installed generating capacity, followed by battery energy storage.
  • In December, ERCOT reported that more than 11,100 megawatts of new generating capacity had been added to its grid since the previous winter. One megawatt of electricity serves about 250 homes in peak-demand periods. Battery energy storage made up 47 percent of the new capacity, with solar in second place at 40 percent.

The mix of ERCOT’s energy is critical to Texas’ growing need for electricity, as ERCOT manages about 90 percent of the electric load for the state, including the Houston metro area. Data centers, AI and population growth are driving heightened demand for electricity.

In the first nine months of 2025, Texas added a nation-leading 7.4 gigawatts of solar capacity, according to a report from data and analytics firm Wood Mackenzie and the Solar Energy Industries Association.

“Remarkable growth in Texas, Indiana, Utah and other states ... shows just how decisively the market is moving toward solar,” says Abigail Ross Hopper, president and CEO of the solar association.