Tipping Point New Mexico Episode 161 Peter Mandelstam – Enchant Energy and the plan to save San Juan Generating Station

Paul talks with Peter Mandelstam, Chief Operating Officer, of Enchant Energy about the company’s plans to add carbon capture technology to San Juan Generating Station. Enchant Energy is working with the City of Farmington to acquire a 95% interest in the plant which is currently operated by PNM.

Paul visits with Peter about the progress Enchant Energy has made to date, as well as the challenges ahead that must be overcome if the project is to raise the capital to add the carbon capture technology that would allow San Juan Generating Station to continue to operate past the 2022 date that PNM is seeking for closure. Issues discussed include the jobs and tax revenue that would be maintained by keeping the plant open, the federal tax credits that will be used in financing the carbon capture technology, and how the retrofitted plant would comply with New Mexico’s Energy Transition Act.

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4 Replies to “Tipping Point New Mexico Episode 161 Peter Mandelstam – Enchant Energy and the plan to save San Juan Generating Station”

  1. If you go to enchantenergy.com you can read the 12/20/19 ABQ Journal article on the Los Alamos National Lab study, which concluded the proposed CCS project is TECHNICALLY feasible. The economics are another matter, but probably doable considering the federal tax credits to be paid. The article says the credit is $2.6 billion per ton “successfully captured and sequestered over 12 years,” which sounds way, way too high. Regardless, the economics don’t fly sans subsidies. I wonder, are the CO2 subsidies so high that the electricity can be given away? For those of you really worried about CO2, see Donn Dears, “Good news for humanity, parts one and two, at ddears.com/donns-articles/.

    1. Thanks Peter. I agree that $2.6 billion sounds too high, but we are working to educate New Mexicans of this issue and, while we don’t like subsidies of any kind, it MAY be better than the alternative of unreliable and also heavily subsidized “renewables.” Not sure if we’ll make our way to Silver City, but we’ll be talking about the issue more after the session ends.

      1. Peter, I contacted some people familiar with the Enchant Energy effort and received the following response:

        The credit is $35 per ton for enhanced oil recovery and $50 per ton for CO2 stored in a geologic formation. The credit is such that the electricity for San Juan Plant used for CO2 capture will be hugely profitable, but in all likelihood Enchant would need to have significant electricity sales to make the overall deal profitable. Enchant hasn’t publicly said how much electricity and at what price they need as of yet.

        $2.6 billion per ton would be nice, however, this looks like a typo or other error to me.

        In addition, the current market price for CO2 is in the $15-$20 range, so the economics are similar for enhanced oil recovery ($35 credit +$15 CO2 commodity price) compared to storage in geological formation $50 credit.

        Both of these approaches would have their own capital and operating expenses: built compressor and pipeline to sell, build an injection well and pipeline to store in a geological formation.

        1. If the Federal subsidies keep the plant and mine open, I suppose us New Mexicans should be happy about that. Since the CO2 science appears to contradict the CO2 hysteria, maybe in 10 years or so we’ll come to our collective senses. Or maybe NEE gets the ETA overturned and PNM will be forced to come up with some realistic cost estimates on replacing the SJGS. Gosh, Mariel and me, shoulder to shoulder!

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