DOE Supports CCUS Retrofit for San Juan Coal Plant

The U.S. Department of Energy (DOE) has released a report that says retrofitting the coal-fired San Juan Generating Station (SJGS) in New Mexico with carbon capture technology would bring more jobs and tax revenue to the region than replacing the power plant with renewable energy.

Deputy Secretary of Energy Mark Menezes presented the report’s findings during an event Monday in Albuquerque, N.M. Menezes and representatives of Enchant Energy, the company that last year proposed a retrofit for the plant, along with officials from Farmington, N.M., and other project partners, participated in a live stream on Enchant Energy’s Facebook page.

“Rather than driving out fuels that produce emissions, we drove emissions down while producing from these same fuels. We want to build on that amazing process,” Menezes said. “CCUS [carbon capture utilization and storage] is an incredible example of innovation, one that has the potential to drive emissions down to zero, making fossil fuels as emission-free as renewables.”

Menezes said the DOE’s goal is to commercialize advanced CCUS technology, and make it available for use on power plants around the world. He acknowledged Monday that the cost of the technology remains an obstacle, and said work being done by Enchant Energy, along with research at national laboratories and the New Mexico Institute of Mining and Technology, is designed to bring down those costs.

Saving Jobs, Tax Revenue

The report discussed Monday supports the contentions that Enchant Energy and its partners have made over the past several months as they seek to keep the 847-MW SJGS open beyond 2022, when it is scheduled to close. Local officials in the Farmington area have said closing the plant will result in the loss of more than 1,500 jobs, along with $53 million in annual state and local tax revenues.

The San Juan Generating Station near Farmington, N.M., is scheduled to close in 2022. Enchant Energy and the city of Farmington want to take over the plant and retrofit it with carbon capture technology to allow its continued operation. Courtesy: Public Service Co. of New Mexico

State lawmakers in a recent meeting said keeping the power plant open would help prevent the negative economic impact of shuttering the facility. A bipartisan group of legislators said the CCUS technology also could help the state meet environmental mandates that call for New Mexico to reduce greenhouse gas emissions statewide by at least 45% from 2005 levels by 2030.

“If we make this happen here, all of a sudden we become the world leader in carbon capture, use and sequestration, and I mean world leader,” said Republican state Sen. Bill Sharer, whose district includes the power plant. “There are places all over the world that are looking at this, thinking about it, but they want to see it really happen. And this is where it can really happen.”

Enchant Energy and the city of Farmington are negotiating with Public Service Co. of New Mexico (PNM) and the plant’s other owners—Tucson Electric Power, Los Alamos County, and Utah Associated Municipal Power Systems—to acquire the facility and outfit it with new technology, at a cost of $1.4 billion. Enchant Energy has said the technology could strip as much as 90% of the carbon dioxide (CO2) from the plant’s emissions. Enchant would sell some of the CO2 to oil and gas companies for use in enhanced oil recovery; some CO2 would be injected into the ground in a research project.

“CCUS is a technology just waiting to change this nation and the world,” Menezes said. “And when it does, it will be nothing short of phenomenal.”

The report referenced Monday was compiled by Management Information Services Inc. (MISI), a Washington, D.C.-based company that provides economic, financial, and computer services to groups looking to build projects, and in some cases benefit from government programs and legislation. The report compared the proposed carbon capture retrofit scenario to a plan offered by PNM to replace the generation from the SJGS. PNM has offered various replacement strategies, including one using both battery storage and renewable energy, the plan used by MISI in its comparison.

Plan for Renewables Approved

The New Mexico Public Regulation Commission (PRC) has approved a 100% renewable energy replacement plan proposed by the Santa Fe, N.M.-based Coalition for Clean Affordable Energy. The commission earlier this year said it would allow PNM to abandon the SJGS, after months of legal proceedings about whether the utility could shutter the plant.

Enchant Energy is led by CEO Cindy Crane, who retired last year from her role as CEO and president of Rocky Mountain Power. Crane on Monday said the findings of the report echo the arguments made by her group in favor of transferring ownership and keeping the plant open.

“I think the theme of the report would have been consistent even if it was compared to the other scenario that was approved by the PRC,” said Crane. The report supports the notion that a carbon capture retrofit will create many more jobs than PNM’s replacement power scenario, and also generate more tax revenue for the region.

“It really just reaffirmed what we have been saying,” said Farmington Mayor Nate Duckett, adding that the report provides a more comprehensive look at the benefits a carbon capture retrofit would provide to the Navajo Nation, which comprises much of the plant’s and the region’s workforce, including at the nearby San Juan Mine.

“It’s nice to have some reinforcing, independent work come to the surface,” said Crane. The report says the CCUS proposal would create 136 jobs per megawatt of power generated, and says PNM’s plan to replace the plant’s electricity output would create just more than five jobs per megawatt. That’s mainly due to the amount of labor required to operate a coal plant versus a solar or wind installation, or even a natural gas-fired plant.

“Those jobs have names,” said Hank Adair, director of the Farmington Electric Utility System. “They have smiles. They have families. And we love them.”

Duckett on the live stream said the carbon capture project would save 1,500 jobs by keeping the power plant and coal mine open. He also noted the benefits to the Navajo Nation and to nearby San Juan College. The school has partnered with Enchant Energy and Farmington to develop a workforce familiar with carbon capture.

“It’s a win for the economy, it’s a win for the environment and it’s a win for the future of our city, of our community,” Duckett said. “It’s a win for our region. I think Farmington represents a number of energy communities in rural America that are being harmed right now by this policy of just getting rid of carbon power as opposed to providing bridge technology that takes us to the next level.”

Debate About Climate Change

MISI has completed other studies about carbon capture and coal plant retrofits. The group has been criticized for downplaying or denying the impacts of power plant emissions on climate change, although more recent MISI reports regarding CCUS have highlighted the technology as a way to address climate change. MISI in June released a report that estimated the so-called Green New Deal, which promotes a U.S. move away from fossil fuels, could create more than 18 million jobs nationwide.

The group’s president, Roger Bezdek, in a December 2014 presentation to the U.S. Energy Association, raised eyebrows when he said there is “No convincing evidence that Anthropogenic Global Warming (AGW) will produce catastrophic climate changes.” Bezdek is a policy advisor to The Heartland Institute, a Washington, D.C.-based “conservative and libertarian public policy think tank,” according to its website. The 2014 report was prepared on behalf of the American Coalition for Clean Coal Energy.

The report evaluating the SJGS makes just one mention of climate change, noting that it is central to the DOE’s strategy to address climate change. The report says a CCUS project at the SJGS facility would be the largest deployment of the technology to date.

Crane said the SJGS is a good candidate for carbon capture because it has a reliable source of coal in the San Juan Mine. She also said its location at the center of the Southwest’s electricity grid is important, and said it is close to a pipeline that could move CO2 to the some of the nation’s busiest oilfields.

Darrell Proctor is associate editor for POWER (@POWERmagazine).

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