Carbon-capture company comes close but can’t close contracts

New Mexico company couldn’t close deals to install the technology at two plants, including IPP.

This story is part of The Salt Lake Tribune’s ongoing commitment to identify solutions to Utah’s biggest challenges through the work of the Innovation Lab.

The Intermountain Power Authority, which owns and operates the IPP coal-fired power plant near Delta, turned down an offer in November from a New Mexico company to buy the plant and modify it to capture and store the carbon dioxide released when the coal is burned.

Enchant Energy, a Farmington, N.M., company headed by former Rocky Mountain Power CEO Cindy Crane, has been seeking opportunities for incorporating its carbon capture and sequestration (CCS) technology.

But the company has faced questions over the technology’s ability to affordably remove and store carbon dioxide, the greenhouse gas most responsible for climate change.

Carbon capture needs much more water than what is needed just to produce power from coal.

“Cost is the issue,” said Milind Deo, a University of Utah chemical engineering professor and director of the U.’s Energy and Geoscience Institute, who believes large-scale carbon capture should be part of the climate-change solution.

(Dan Hixson | John and Marcia Price College of Engineering) Milind Deo, director the University of Utah's Energy and Geoscience Institute, says carbon capture should play a role in fighting climate change, but the cost is a limiting factor.

Rejection in two states

In November, the Intermountain Power Authority board of directors rejected Enchant’s bid to buy the coal plant, which IPA plans to shut down in 2025 and replace with a cleaner natural gas- and hydrogen-fueled plant.

Enchant wanted to operate the coal plant to power data centers at the plant’s site. Enchant also wanted representation on IPA’s board as part of the proposal.

But the resolution rejecting the proposal said it is “inconsistent with IPA’s purposes and not beneficial to the interests of IPA, the members or IPP, and is sufficient reason to reject the unsolicited CCS proposal.”

IPP, which has been operating since the early 1980s, sells the majority of its power to Los Angeles, with a small amount going to several municipalities in Utah. The seven-member board of directors, all of them Utahns, unanimously rejected the Enchant proposal.

Enchant also last month ended its effort to buy the San Juan Generation Station, a coal-fired power plant in the Four Corners area that was shut down this year. Enchant wanted to install its carbon-capture technology and keep burning coal at the plant.

This Nov. 9, 2009, file photo shows the coal-fired San Juan Generating Station near Farmington, N.M. Owners of the plant shut it down last year rather than accept Enchant Energy's proposal to install carbon-capture technology and keep operating. (AP Photo/Susan Montoya Bryan, File)

One of the San Juan facility’s owners, the City of Farmington, N.M., supported Enchant’s plans as a path to keeping the plant open and employing Farmington residents.

But the plant’s other owners opposed the plan, and, after a legal fight, they are moving ahead with dismantling the plant. Enchant announced Dec. 21 that it was ending its San Juan effort.

“We are very saddened by the need to terminate the project that would have brought so many benefits to the City of Farmington, energy workers in the region and customers who would have benefited from the reliable low carbon electricity,” Crane said in a statement.

Enchant declined to answer questions from The Tribune.

Proven but costly technology

Enchant’s approach uses chemicals called “amines” to absorb carbon dioxide from the coal plants’ exhaust. After the CO2 is captured, the process can be reversed to remove the CO2 and reuse the amines. The removed CO2 can then be stored underground or used in industrial processes. It is a mature technology that has been around since the 1950s.

One key component of Enchant’s plan was relying on loans from the U.S. Department of Energy, which offers financial incentives for carbon capture as part of an array of clean energy incentives. They would also rely on the Section 45Q tax incentive, which was recently increased and extended by last year’s federal Inflation Reduction Act. It provides an $85 tax credit per ton of carbon dioxide permanently stored.

The federal incentives have brought skepticism from clean-energy proponents who fear it subsidizes an outdated solution. “Using carbon capture as a green light to extend the life of fossil fuels power plants is a significant financial and technical risk: history confirms this,” according to a report from the Institute for Energy Economics and Financial Analysis.

The Utah Associated Municipal Power Systems, which represents municipal power systems across Utah, was a San Juan Generating Station owner and had signed on to the Enchant Energy plan before it got caught up in litigation. UAMPS spokeperson LaVarr Webb said the group is still interested in carbon capture. “UAMPS is monitoring the technology and any opportunities out there, but is not currently pursuing a project.”

In addition to dollars, carbon capture also requires another precious resource in the west: water.

In November, Utah legislators received a report from Milind’s team about the water demands for various power-generation technologies. Adding carbon capture to coal plants would require nearly 1,000 gallons of water per megawatt-hour, nearly doubling the amount required for a coal plant without carbon capture and far more than is needed for other generation sources. “It is true that more water will be needed when capture is included in fossil-fuel power plants – but I don’t believe this will be the limiting factor,” said Milind.

Wyoming makes it mandatory

In Wyoming, by far the largest coal-producing state in the country, the state Legislature passed a law to require utilities to install carbon-capture technology to keep the coal plants operating.

As required by the state, Rocky Mountain Power next month will start charging its Wyoming customers an extra fee to fund the research and analysis of adding carbon capture.

In its initial application to the Wyoming Public Service Commission to comply with the law, Rocky Mountain estimated that it would cost $410 million to retrofit two of four units at the Jim Bridger coal plant east of Rock Springs and to pay a third party to take and store the carbon dioxide.

Opponents of the carbon-capture requirement point out that Wyoming ratepayers will have to pay the full costs of carbon capture, even if some of the plants’ power is used out of state. For instance, Utah draws from the Bridger plant, but Rocky Mountain can’t assess any costs of carbon capture to its Utah customers because Utah hasn’t mandated it as Wyoming has. Large industrial power customers in Wyoming are concerned that more expensive electricity rates will counteract the economic benefits of keeping coal power.

Rocky Mountain spokesperson Dave Eskelsen said the company has issued a request for proposals to construct carbon-capture facilities in Wyoming as the law requires. He also said the company looks at carbon capture when it updates its 20-year Integrated Resource Plans every two years, but it currently has no plans to add it at other plants, including the Hunter and Huntington plants in Emery County.

“It has not been selected to be part of the preferred portfolio largely because of the higher cost to customers,” he said.

The Texas Two Step

Those who question carbon capture’s viability for coal generation have an Exhibit A for why it should not be tried: Petra Nova. In 2017, the WA Parish Generating Station in Thompsons, Texas, began operating Petra Nova, a project to remove carbon dioxide from the plant’s emissions and use it to inject in oil wells to increase production.

“Everything is bigger in Texas, so it is fitting that the largest post-combustion, carbon-capture facility in the world is right here in the Lone Star State,” said Texas Gov. Greg Abbott during a 2017 tour of the plant.

Texas Gov. Greg Abbott speaks at the valve turning ceremony for the Petra Nova carbon capture and enhanced oil recovery system on Thursday, April 13, 2017, in Fort Bend County, southwest of Houston. Petra Nova only operated for three years before it was shut down over cost concerns. (Paul Ladd/AP Images for Reliant)

But only three years later, Petra Nova was shut down, with the owner citing the high cost of operation. Now, the coal plant is back to releasing all of its carbon dioxide, and the plant’s owner has no plans to restart carbon capture.

Tim Fitzpatrick is The Salt Lake Tribune’s renewable energy reporter, a position funded by a grant from Rocky Mountain Power. The Tribune retains all control over editorial decisions independent of Rocky Mountain Power.