ALBUQUERQUE, NM – The Enchant Energy Corp. plan project to transform the San Juan coal-fired power plant into the world’s largest carbon-capture power plant faces multi-year delays.
When the New Mexico utility company abandons the facility in June 2022, Enchant now says it plans to simply continue operating the site as a carbon-emitting coal-fired power plant for up to three years until then. that it can fully install the carbon capture technology, company officials told the Journal this week.
Enchant announced in 2019 that it would convert San Juan into the world’s largest carbon capture project, in partnership with the City of Farmington, after PNM and other co-owners of the plant leave next year. Until recently, Enchant said it would begin construction on the plant conversion by 2021 and start mining with carbon capture in place by January 2023.
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But his plans are now more than two years behind schedule amid difficulties raising funds to finance the $ 1.4 billion project, as well as delays in completing an engineering and design study which he needs to sign a construction contract with industry partners. As a result, the company is now aiming for the end of 2024 for carbon capture to be partially operational in San Juan, and mid-2025 for it to be fully operational.
Given the delays, Enchant now says it will continue to operate the plant as is, starting July 1, 2022 – the day after PNM and other co-owners handed over the facility to Farmington Electric Utility, said. company executives in the Journal this week.
How it will work
The Town of Farmington utility currently owns a 5% stake in San Juan, allowing Farmington to take full ownership free of charge when the other co-owners leave on June 30, 2022. And under the Enchant agreement along with Farmington, the town will then transform the until Enchant to be operated as a merchant power station.
“On June 30, ownership of the plant will be transferred to Farmington, and the next day we will begin carbon capture construction while we still keep the plant running,” said the COO of ‘Enchanting, Peter Mandelstam, at the Journal. “… It’s a 27-month construction schedule for the first carbon capture train to be operational by the end of 2024, then fully operational by mid-2025.
The company said it already plans for utility customers to purchase power in San Juan from July 2022 through its new “pre-decarbonization” and “post-decarbonization” strategy. This means first wholesaling its charcoal production to buyers without carbon capture, then converting to “post-decarbonization” sales after installing the CO2 capture technology, said Enchant CEO Cindy Crane. .
“We now have a condition sheet running with one (customer) and another condition sheet being finalized with another party,” Crane told the Journal. “We are also in discussions with two other parties.
Crane declined to identify Enchant’s potential business customers. But the company submitted bids this week to supply power to PNM in response to a request for proposals that PNM released in May to replace San Juan’s power generation, Crane said.
Enchant’s new plans will face strong reluctance from environmental groups and possibly state regulators.
Environmental organizations opposed the carbon capture project from the start to perpetuate charcoal production with technology that has yet to prove itself on a commercial scale. Environmentalists say the San Juan conversion will likely cost far more than the $ 1.4 billion projected by Enchant, and the company has yet to secure funding for the project.
In fact, although Enchant executives previously said they would use private investment to convert San Juan, the company is now seeking nearly $ 1 billion in low-interest loans from the U.S. Department of Justice. ‘Energy and other federal entities to help finance the project.
Erik Schlenker-Goodrich, executive director of the Western Environmental Law Center, called the project a “mess” that promotes false hopes to save coal-related jobs in the Four Corners. The company’s latest pre- and post-decarbonization strategy only prolongs “dirty coal power,” he said.
“(Enchant) continues to do a great disservice to communities in the region by perpetuating the myth that coal has a future in the region,” Schlenker-Goodrich told the Journal. “You can expect Enchanting’s efforts to meet with deep skepticism and opposition. “
Steve Michel, an attorney for Western Resource Advocates, said Enchant’s new plan could simply mean operating San Juan indefinitely without carbon capture.
“I’m skeptical that the plant will one day get the (conversion) funding it needs,” Michel told the Journal. “I think there is cause for concern that the plant will operate without the ability to capture carbon now or in the future.”
The state’s energy transition law could also hamper Enchant’s plans. The law requires utilities to replace fossil fuels with 80% renewable electricity by 2040 and 100% carbon-free generation by 2045.
Enchant will operate San Juan as a merchant powerhouse, not a utility. But ETA still requires all coal-fired power plants in New Mexico to reduce their carbon emissions to a maximum of 1,100 pounds per megawatt hour of electricity produced as of January 2023. That means Enchant must reduce its emissions by 50% from the 2,200 pounds per MWh that San Juan emits today.
But Enchant executives say the state’s Department of Environment must still publish rules and requirements to meet those mandates, potentially allowing the company to show compliance using a three-year moving average. on its carbon emissions, rather than just cutting carbon output all at once.
“A three-year moving average calculation is pretty standard across states and across the federal government,” Crane said. “This gives you time to install the necessary equipment and use it to achieve operational efficiency. “
It may be wishful thinking, said Sandra Ely, director of the environmental protection division.
“The whole notion of averaging emissions over three years makes no sense,” Ely told the Journal. “The law is pretty clear – 1,100 pounds per MWh as of January 2023. It’s plain language.”
The state’s Environmental Improvement Council will need to review the final rules, likely next year, Ely said.
Depending on the outcome, Enchant could potentially seek an Air Quality Control Act waiver, but that will likely meet public opposition, Ely said.
“A hearing will have to be held in front of the EIB,” she said. “It’s a public process where the community can influence.