Enchant's plans for San Juan coal plant delayed

Enchant Energy's plan to retrofit the coal-fired San Juan Generating Station in New Mexico to a carbon capture facility is almost two years behind schedule.

Enchant, which won the right to purchase the 874MW San Juan plant from its current owners when they exit the facility next year, had initially planned to start construction on the carbon capture plant this year and bring the new technology into full operation in January 2023. Now, Enchant is planning to start construction in July 2022, after San Juan's current operator, Public Service Company of New Mexico, and three other owners transfer ownership.

Enchant adjusted its strategy for converting San Juan to carbon capture "based on delays from Covid-19 and other factors," Enchant chief executive Cindy Crane said today. The company is still "committed to building the carbon capture and keeping the plant running until 2036."

Crane expects about half of the project's planned carbon capture capability will be operational by the end of 2024. Full functionality is expected by mid-2025.

Enchant expects to continue to run the plant in its current format until the carbon capture facility is built, Crane said.

The City of Farmington, which will keep a 5pc stake in the plant, declined to answer specific questions about the project, but said the city "remains optimistic" about it and "looks forward to the project's success."

Enchant has estimated it will cost $1.4bn to install the carbon capture technology and build a pipeline to ship captured CO2 from the San Juan plant to customers. It has applied for nearly $1bn in low-interest loans from the US Department of Energy and other federal entities to help fund the project.

But critics warn the project could be more costly. The Institute for Energy Economics and Financial Analysis, which says its mission is to "accelerate the transition to a diverse, sustainable and profitable energy economy," issued a report last month saying Enchant's plan could cost twice as much as the company currently estimates.

"There are a lot of risks associated with carbon capture, and Enchant clearly has not gotten the interest from investors they claimed they would have," said David Schlissel, IEEFA director of resource planning analysis and the author of the report. The Department of Energy would have to act "much, much faster" than it did in approving a smaller loan for NRG Energy's PetraNova carbon capture project, which was mothballed last year , and even if it did, Enchant's project needs to go through environmental reviews and permitting, he said.

In addition, New Mexico's Energy Transition Act requires plants meet much lower CO2 emission standards starting on 1 January, 2023, and without carbon capture San Juan might not meet the new standard, Schlissel said.

Enchant's Crane disagreed with Schlissel's prognosis for the plant. She also said Enchant has applied for all of the major permits necessary to build the carbon capture facility.

"We are working from an implementation plan that will allow the plant to operate while the carbon capture island is built, but if that is not possible, the project is still economically and technically feasible," Crane said.

By Elena Vasilyeva

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