Visitor cheer-leading by David Middleton
H/T to Gary Grubbs
Metropolis Backs Deal for CCS Know-how to Save New Mexico Coal Plant
08/19/2019 | Darrell Proctor
The Farmington, New Mexico, metropolis council on Aug. 15 unanimously permitted a deal to switch 95% of the possession curiosity of the coal-fired San Juan Producing Station (SJGS) to Enchant Vitality, an organization run by executives of a New York-based hedge fund that desires to make the most of what it calls “state-of-the-art environmental expertise” to seize carbon dioxide (CO2) from the plant and hold the power in operation.
The contract settlement dated Aug. 16 is the most recent chapter within the metropolis of Farmington’s effort to maintain the SJGS in operation. Farmington officers have labored to discover a new operator for the 847-MW San Juan plant after native utility PNM, which operates the power, in 2017 stated it could shut the plant’s two remaining items in 2022, 30 years forward of schedule. The town is a component proprietor of the plant.
The SJGS and its adjoining San Juan coal mine are main employers in northwestern New Mexico, and most of the employees on the mine are from the Navajo Nation. The San Juan Mine, the only supplier of coal to the SJGS, will function beneath new possession after the chapter of former proprietor Westmoreland Coal Firm, with collectors anticipated to take possession. The mine’s present provide contract with the mine expires in 2022.
At first look, this story didn’t look that attention-grabbing… However once I came upon that the Rockefeller Household Fund was vigorously opposing it, I made a decision that it was price digging into. After studying this, I’m now an unofficial Enchant Vitality cheer-leader…
World’s largest CCS plant in N.M. — plan or pipe dream?
Edward Klump, E&E Information reporter Energywire: Friday, July 19, 2019
It’s been 14 years since Jason Selch, an vitality analyst and investor, mooned his bosses at Financial institution of America.
His newest daring transfer: making an attempt to avoid wasting a threatened coal plant.
“It may well’t all be shut down directly,” Heller stated. “And the answer has to begin someplace.”
Whereas claiming a prolonged profession in vitality funding, Selch, 58, has gained extra consideration within the press for strolling right into a Financial institution of America convention room in Chicago in 2005 and mooning higher-ups for firing his buddy. Selch can be fired and denied about $2 million in deferred compensation regardless of a lawsuit. Selch instructed MarketWatch in 2012 the incident was “considerably damaging to my profession and it was very damaging to my pocketbook.”
Now, Selch and Heller are pitching what they solid as a carbon seize enterprise in contrast to something within the business — one thing on a bigger scale than the Petra Nova carbon seize undertaking in Texas, the world’s largest CCS retrofit of a coal plant. And having Selch and Heller is producing consideration — at the same time as appreciable questions stay.
Opponents say the proposal provides hope to employees on the plant and a close-by mine that’s unlikely to be fulfilled. The Public Service Firm of New Mexico, or PNM, is in search of to take two coal-fired producing items offline at San Juan in mid-2022.
The utility, which is a part of PNM Assets Inc., has stated it gained’t purchase energy from San Juan after it exits. PNM has argued the retirement would have environmental and financial advantages for purchasers.
“Whereas Enchant Vitality has an alluring title and whereas it purports to have compassionate group intent — its enterprise mannequin is just not workable and its San Juan Producing Station retrofit pitch seems to be largely self-serving,” the Institute for Vitality Economics and Monetary Evaluation stated in a latest report.
The institute says it conducts analysis and analyses on monetary and financial points tied to vitality and the setting and receives funding from philanthropic organizations, together with the Rockefeller Household Fund and the William and Flora Hewlett Basis. The group, whose web site says it promotes a shift to “a various, sustainable and worthwhile vitality financial system,” stated utilizing carbon seize round coal-fired technology is “a principally tutorial, unaffordable train.” It stated Selch and Heller’s pitch is providing false hope and financial threat to Farmington.
Present of palms… Who right here has ever, not less than as soon as, needed to moon their boss?
The truth that the Rockefeller Household Fund and the William and Flora Hewlett Basis are opposing this, tells me that it’s a good suggestion.
Critics have stated Enchant’s plan is just not sensible. The Institute for Vitality Economics and Monetary Evaluation (IEEFA), a pro-renewable vitality group…
The IEEFA “report” is nothing however a bunch of babble about solar energy and lies…
Enchant Vitality’s total proposal rests on the supposition that carbon seize from coal-fired electrical energy technology is concurrently technologically and economically possible. Neither is the case.
Institute for Vitality Economics and Monetary Evaluation
Hi there? Petra Nova? Oh, wait, they talked about it afterward…
Regulatory proceedings apart, development and implementation efforts would add years to the timetable. Given the size of the San Juan proposal—at roughly 850 MW it could be greater than thrice the dimensions of the most important energy plant CCS undertaking within the U.S.—Enchant Vitality’s $1.2 billion value estimate ought to be taken for what it’s, little greater than a back-of-the-napkin calculation. By comparability, the prevailing 240 MW Petra Nova CCS undertaking in Texas value $1 billion to carry on-line.
Institute for Vitality Economics and Monetary Evaluation
That’s all kind of true… However, Petra Nova is “concurrently technologically and economically possible.”
Billion Greenback Petra Nova Coal Carbon Seize Mission a Monetary Success However Unclear If It Can Be Replicated
NRG Vitality and JX Nippon’s three way partnership Petra Nova undertaking, the world’s largest working post-combustion carbon dioxide (CO2) seize system, is about to obtain one other huge enhance from ongoing bipartisan enthusiasm for “clear coal.” The U.S. funds invoice handed by Congress in early February included the FUTURE Act (S.1535) that extends tax credit for carbon seize, utilization, and storage (CCUS) initiatives and raises the credit score from $10 to $35 per ton used for enhanced oil restoration. This actually raises the prospects for additional funding in an costly and nascent expertise.
The Petra Nova system has been working since January 2017 on the retrofitted coal-fired Unit #eight at W.A. Parish Producing Station southwest of Houston, Texas. The 610 MW unit produces about 25% of the plant’s whole output and CO2 emissions. A portion of the emissions, equal to that of a 240 MW unit, are routed to the carbon seize system that cools the fuel, binds the CO2 with a solvent, vents the remaining nitrogen fuel, after which reheats the combination to interrupt the CO2 bonds. The CO2 is cooled and compressed to a supercritical liquid that then enters an 81-mile pipeline to the West Ranch Oil Subject the place it’s pumped 5,000 ft underground into the Frio Formation and combines with the oil, reducing its density. Extracted oil is processed by means of a CO2 separator that returns the fuel again to the formation. An business rule of thumb estimates an additional two barrels of oil is extracted for each ton of CO2 injected, which has to this point elevated manufacturing from 300 barrels to greater than four,000 barrels per day and should attain as excessive as 15,000.
Scott Madden Administration Consultants
NRG isn’t promoting the CO2 to Hilcorp, the operator of West Ranch Oil Subject. NRG Vitality and JX Nippon paid for the Petra Nova system, which incorporates an 80-mile pipeline, in change for a working curiosity within the discipline. In addition they added a pure gas-fired generator to energy the CCUS facility.
Whereas I haven’t seen an in depth value breakdown, a reasonably good chunk of that $1 billion additionally went to injection infrastructure and their share of drilling injection wells.
Selch says proximity to pipeline attracted Enchant Vitality
Selch introduced carbon seize as a method to transition to renewables with out having as a lot of an financial influence on communities the place coal-fired energy vegetation are situated.
Selch first discovered concerning the alternative to amass the San Juan Producing Station after being approached by a Washington, D.C.-based lawyer employed by the Metropolis of Farmington.
Selch stated he initially had doubts about investing in a coal-fired energy plant.
“My preliminary response was that coal-fired energy doesn’t have a lot of a future and I’ve higher issues I could possibly be concerned in,” Selch stated.
Then he noticed a map of the Cortez pipeline on the Kinder Morgan web site. He stated that was his “eureka second.” The pipeline runs close to the facility plant and transports carbon dioxide to Texas. That makes the San Juan Producing Station a perfect location for carbon seize.
Farmington Every day Occasions
US IEA and Kinder Morgan
The Cortez Pipeline presently provides a lot of the Permian Basin’s CO2. It’s “able to transporting 1.5 billion cubic ft of CO2 per day” and possibly has extra capability. Kinder Morgan had deliberate 216-mile pipeline from a CO2 discipline in Arizona to tie into the Cortez Pipeline in New Mexico. This could have delivered an extra 300 million cubic ft of CO2 per day. The collapse in oil costs put this almost $1 billion undertaking on maintain.
This undertaking may have a lot decrease exterior prices that Petra Nova they usually gained’t should spend cash on an auxiliary pure fuel fired generator to energy the CCSU.
Electrical energy prospects stay an unknown
One query hanging over the undertaking is who will purchase the facility. Selch expressed confidence within the potential to market the captured carbon dioxide, however he stated it might be more durable to promote the electrical energy. He described it as a brand new kind of electrical energy — low-emission fossil gasoline technology.
The ability plant will produce about 250 kilos of carbon dioxide per megawatt hour after the carbon seize expertise is put in. The California Greenhouse Gasoline Emissions Efficiency Commonplace requires amenities to provide lower than 1,100 kilos per megawatt hour, and California is contemplating lowering that to 850 kilos per megawatt hour. New Mexico’s Vitality Transition Act requires producing stations to provide lower than 1,100 kilos per megawatt hour beginning in January 2023.
A 3rd of the facility the San Juan Producing Station produces already has prospects. It is going to both be used to energy the carbon seize or to offer electrical energy to Farmington Electrical Utility System prospects.
About 29 % of the electrical energy the facility plant presently generates can be used to energy the carbon seize system, together with compressing the carbon dioxide.
One viewers member highlighted alternatives to promote energy to federal authorities companies or to export it to Mexico.
Farmington Every day Occasions
The 45Q Tax Credit score
In a $50-$60/bbl oil worth setting, initiatives like this could be completely uneconomic with out the 45Q tax credit score. That is from Enchant Vitality’s PowerPoint presentation:
The 45Q tax credit score will cowl 2x the capital prices.
They’re primarily planning to finance this similarly as solar energy builders, however there are obstacles.
“Environmental group is very invested in shutting down SJGS.”
There are advantages to a group that wants advantages.
Farmington is on the japanese border of the Navajo Nation. Anybody who has pushed by means of there is aware of that these individuals don’t want extra unemployment.
Enchant has stated its deal to function SJGS is “deliberately designed to additional New Mexico’s twin targets of considerably lowering its statewide CO2output, and supporting New Mexico’s financial system by using a whole bunch of individuals in San Juan County and on the Navajo Nation by offering dependable, low-cost and intensely low-emission wholesale electrical energy.” The group stated its settlement with town of Farmington means town won’t tackle further liabilities associated to the plant, and pays much less for its energy purchases from the SJGS after 2022. The deal additionally contains some reimbursement of authorized charges.
The Farmington Every day Information quoted the governor lately as saying she is dedicated to creating positive $40 million of help goes to San Juan County, the Navajo Nation and displaced employees if San Juan closes in 2022.
Can Selch and Heller pull this off? Time will inform… However I’m rooting for them. Proper or unsuitable, the U.S. authorities is dedicated to subsidizing low-carbon vitality. And a few States are legislating it. Carbon Seize Sequestration and Utilization (CCSU) is the one economically viable means hold our resilient, huge, lovely, clear coal-fired energy vegetation working on this carbon-crazy setting. In a $50-$60 oil worth setting, CCSU is never financial. The 45Q tax credit score could also be simply the ticket to low-cost coal-fired electrical energy, comparatively low oil costs and American Vitality Dominance. The actually uncommon factor is that the 45Q tax credit score has broad bipartisan assist.
Prefer it or not, our authorities goes to proceed to subsidize low-carbon vitality. I’d favor that they subsidize vitality that works (coal, nuclear) than Unicorn mud (wind, photo voltaic).