Basin Electric CO2 Capture Project on Indefinite Hold
Basin Electric’s directors decided last week that a proposed demonstration project to capture emissions of carbon dioxide (CO2) at the Antelope Valley Station (AVS) in Beulah, N.D., will remain on hold until the economic viability of such a venture can be further developed.
This decision was made based on many factors, including the results of a Front-End Engineering and Design (FEED) study that were presented at this month’s regular meeting of directors. The FEED study, which began in February 2010, focused on capturing a portion (about 25%) of the CO2 from one of the two AVS units. The FEED study, coupled with an assessment of the additions necessary at the plant, financing, and sequestration costs indicated that a demonstration-scale project could cost as much as $500 million.
Ron Harper, Basin Electric CEO and general manager, said, "The FEED study accomplished its purpose. This is the first time in the region that a detailed analysis of a carbon capture project from a conventional coal-based power plant has been conducted," he said. "We now know the required infrastructure, the cost, and the integration and operational challenges that will be required to continue developing a carbon capture technology. In the current economic climate, we are postponing further investments for the time being, but regard it as important technology to consider for the future."
Harper said Basin Electric has been working on this project for over three years and has made a huge investment in time, human resources, and capital to come to this decision point. In addition to the overall cost of the project, other factors affecting the decision included:
- The market for the sale of CO2 for enhanced oil recovery (EOR) is still developing in this region—without EOR, additional costs for direct geologic sequestration would need to be included.
- The uncertainty of environmental legislation.
- Lack of a long-term energy strategy for this country.
Based on the FEED study, Basin Electric carefully analyzed the technical, operational, regulatory, and financial risks for installing carbon-capture technology at a conventional coal-based power plant, the company’s press release said. "It’s imperative that a revenue stream, such as EOR, be available in order to make a project like this viable," Harper said. "While a strong potential exists for CO2 sales for EOR, they have not yet developed and there’s no certainty that they’ll develop in the near future."
"Basin Electric isn’t willing to place the burden of developing CO2 capture technology on its rural electric members," Harper said.
Basin Electric is a consumer-owned, regional cooperative headquartered in Bismarck, N.D. It generates and transmits electricity to 135 member rural electric systems in nine states: Colorado, Iowa, Minnesota, Montana, Nebraska, New Mexico, North Dakota, South Dakota, and Wyoming.
The FEED study was conducted in conjunction with HTC Purenergy, Regina, Saskatchewan, Canada, and Doosan Power Systems, Crawley, UK. HTC has designed a proprietary CO2 capture technology, supported by Doosan that is designed to capture 90% of the incoming CO2 from the exhaust gases produced by one of the AVS units.
Originally, the company’s technology partner was to be Powerspan Corp. However, as Basin Electric VP for Communications and Marketing Support Floyd Robb told POWERnews, when Powerspan couldn’t deliver enough data from a pilot project within the contract’s timeframe, the company dissolved that partnership and initiated one with HTC in December 2009.
In January 2009, the U.S. Department of Agriculture had said it would loan up to $300 million to the demonstration project. Basin Electric also was awarded a $100 million loan under the U.S. Energy Department’s Clean Coal Power Initiative. Robb said that the company will not be applying for the loans now.
If the cooperative can secure a contract for CO2 delivery, likely for EOR, "things could change," Robb said.
The cost of the FEED study was $6.2 million; about half ($2.7 million) of the study was funded by a grant from the North Dakota Industrial Commission. The remainder was funded by Basin Electric.
Source: Basin Electric, POWERnews