Enchant Energy Corp. and the City of Farmington are partnering with some global powerhouses on the design, engineering and construction of carbon capture and sequestration technology at the coal-fired San Juan Generating Station near Farmington.
Enchant Energy, the private firm that plans to acquire the power plant from Farmington in 2022 to pursue carbon capture, announced Tuesday that it has signed memorandums of understanding with three companies to work on the project: Mitsubishi Heavy Industries America, Kiewit Power Constructors Co., and Sargent & Lundy. Mitsubishi will provide the technology to convert San Juan, and Kiewit and Sargent & Lundy will work together as the engineering, procurement, and construction contractor on the project.
All three previously worked on the Petra Nova carbon capture plant near Houston, which is currently the only such project operating in the U.S. Mitsubishi created the carbon capture technology that’s installed there.
“We deliberately sought globally significant companies with previous experience at Petra Nova,” Enchant Chief Operating Officer Peter Mandestam told the Journal. “They learned a lot from their work there, which they’ll apply on our project. That experience will allow them to build our plant at a cheaper cost per ton of carbon captured than at Petra Nova.”
That’s critical for the San Juan project to be successful. Petra Nova cost $1 billion to build, or just $300 million less than the $1.3 billion Enchant Energy estimates for San Juan. But at 850 megawatts, San Juan is more than three times larger than the 240 MW Petra Nova plant, making cost efficiencies here essential.
It’s not yet clear what the actual project cost will be, since Enchant’s $1.3 billion estimate is based on a pre-feasibility study conducted by Sargent & Lundy. A much more in-depth, front-end engineering and design, or FEED, study won’t be completed until next year.
Public Service Co. of New Mexico, which plans to abandon San Juan in 2022, says it could cost two or three times more than Sargent & Lundy’s estimate to retrofit the plant with carbon capture. But Farmington, which will inherit the plant for free once PNM and other co-owners depart the facility, wants to keep it open to continue consuming electricity from it, save hundreds of jobs, and allow local tax income from operations to keep flowing.
The newly-signed MOUs commit Enchant and its partners to work out all details for a formal engineering, procurement and construction contract by next summer. Once signed, the EPC would lock the providers into a fixed price for the project and on-time delivery of all work.
That’s necessary for the project to stay on budget and become operational by 2023, when the plant needs carbon capture up and running to meet emissions caps that take effect that year under the state’s Energy Transition Act.
“We’ll work collaboratively with our partners to build up a line item budget and put it into a legally binding EPC,” said Mandelstam, who will lead Enchant in the negotiations. “…We know the public wants to know what the final cost will be. We will release a precise number as a full-wrap, turnkey project with a one-lump sum.”
Hank Adair, director of the Farmington Electric Utility System, praised Enchant’s new partnership as a major step forward.
“This is a big step in advancing the project,” Adair said in an email to the Journal. “Enchant’s signing of MOUs with esteemed engineers and contractors who are experts in the carbon field move us that much closure to our goal of saving 1,600 direct and indirect jobs associated with (San Juan).”