A company that wants to buy 95 percent ownership of the aging coal-fired San Juan Generating Station says a study found refitting the power plant with new technology would cut carbon emissions by 90 percent and allow it to operate economically after Public Service Company of New Mexico pulls out in 2022.
Enchant Energy claims its plan would comply with the state’s newly enacted Energy Transition Act, save 400 jobs in northwestern New Mexico and “produce highly reliable, low-priced, low-emissions and low-carbon baseload power at no additional cost to consumers.”
The company’s claim, which environmentalists and other skeptics doubt, is the latest development in efforts to keep the plant operating despite plans by PNM and state officials to move New Mexico toward carbon-free energy sources such as solar and wind power to reduce emissions blamed for environmental damage.
Enchant is a subsidiary of a New York holding company called Acme Equities LLC. The company has signed a nonbinding letter of intent with the city of Farmington to explore taking over the plant.
Enchant’s chief executive officer, Jason Selch, said in a news release, “This project will demonstrate that it is possible to comply with stringent CO2 emissions standards for electricity generation using carbon capture utilization and storage technology while providing high-paying jobs and maintaining state and local taxes that are so vital to the northwest region of New Mexico.”
Camilla Feibelman, director of the Rio Grande chapter of the Sierra Club, was among those skeptical of the company’s assertions.
“Their study claims to show that carbon capture won’t cost more than the San Juan plant already does,” she said Tuesday. “But PNM’s analyses show that continuing to operate [San Juan Generating Station] would cost approximately $379 million more than PNM’s preferred replacement resource scenario.”
Officials from Enchant couldn’t be reached for comment Tuesday.
The “clean coal” proposal emerged earlier this year while the state Legislature was debating the Energy Transition Act, which eventually passed the Legislature and was signed into law by Gov. Michelle Lujan Grisham. Farmington officials pitched the carbon-capture idea as a way to reduce emissions while saving jobs that would be lost at the plant and an adjacent coal mine.
Larry Behrens is western states director of Power the Future, a Washington, D.C.-based advocacy group that’s been highly critical of the new state law that mandates utilities to use significantly more renewable energy. He said Tuesday, “We would support any opportunity to preserve and increase energy jobs in New Mexico, particularly in the Four Corners area. Since it appears this proposal would both save jobs and dramatically decrease emissions, we fully expect the eco-left to support it as well.”
But that doesn’t seem likely.
The Sierra Club’s Feibelman said the Enchant plan calls for captured carbon dioxide to be shipped to oil fields to enhance oil recovery. “The rest of the world is trying to protect our children from catastrophic effects of climate change,” she said, “and this proposal would capture the carbon from burning one deadly fossil fuel just to use it to increase production of another fossil fuel — which when burned, would release carbon dioxide.”
And though the study says that the plant would not have to secure more water rights, Feibelman said carbon capture “almost doubles the average water consumption of coal plants.”
PNM spokesman Ray Sandoval on Tuesday declined to comment on the study or Enchant’s proposal to take over and retrofit the plant. “I can say that there are no formal negotiations about purchasing the power plant,” he said.
Sandoval said PNM would continue carrying out its obligations to the city of Farmington. But he added, “We will not purchase one single electron” from San Juan after PNM leaves the plant.
The Chicago-based Sargent & Lundy engineering firm, which conducted the feasibility study, estimated the cost of capturing carbon at the San Juan facility ranges from $39 to $43 per metric ton, which the firm said would be a significant cost decrease from the last major carbon capture retrofit, which was put into operation in 2017 at the Petra Nova coal-burning plant near Houston.
Petra Nova, according to the U.S. Energy Information Agency, is one of only two plants in the world using carbon capture technology. The other is the Boundary Dam plant in Saskatchewan, Canada, near the border with North Dakota.
A power plant in Mississippi was built with the capability of using such technology as well as burning natural gas. According to the Energy Information Agency, the Mississippi facility, called the Kemper plant, had been expected to be fully operational and capable of using carbon capture by mid-2014. However, in June 2017, the Mississippi Power utility “decided to suspend operations activities relating to the coal gasification process, electing to operate Kemper strictly as a natural gas-fired combined-cycle plant.”
Mississippi Power lost $6.4 billion when it decided to ditch the carbon-capture technology. In May, the Associated Press reported the U.S. Justice Department is investigating what happened at the plant.
Earlier this year, Sargent & Lundy, which conducted the study for Enchant, announced it’s working with a company called NuScale to build what’s being touted as the first small modular nuclear reactor in the United States.