Published: Saturday, February 22nd, 2020 at 11:20pm
Updated: Sunday, February 23rd, 2020 at 11:21pm

Copyright © 2020 Albuquerque Journal

A new report by a think tank that favors renewable energy says plans to convert the coal-fired San Juan Generating Station into the world’s largest carbon-capture facility are based on “almost fantastical” assumptions that undermine the project’s credibility.

The report, published Feb. 12 by the Institute for Energy Economics and Financial Analysis, says the company pursuing the project, Enchant Energy, is “selling a fantasy, one that requires believers to ignore the serious risks associated with the proposal.” That includes significant low-balling of costs, overestimates of the aging coal plant’s ability to produce at high capacity and unrealistic optimism about how much carbon the proposed technology can capture once operating, the report says.

Among project believers is the City of Farmington. It is partnering with Enchant to move the project forward in an effort to save hundreds of jobs and local taxes associated with San Juan operations.

But report authors say Enchant is leading the local community down a path of “false promises and major risks.”

“They’re very good salesmen,” said IEEFA analyst and co-author Dennis Wamsted. “They do a good presentation. But we have to get beyond presentations and look hard at the numbers themselves behind the proposal, and that’s what IEEFA is doing.”

Enchant’s chief operating officer, Peter Mandelstam, said the company is confident about its plan and that it’s based on detailed analysis by the world’s foremost private sector experts on carbon capture: Mitsubishi Heavy Industries of America, Kiewit Power Constructors Co., and Sargent & Lundy. Those firms jointly built the only carbon-capture coal facility currently operating in the U.S., Petra Nova in Texas, and they all committed in December to lead the San Juan conversion once final contracts are signed later this year.

Mandelstam said Enchant’s basic assumptions are based on a pre-feasibility study on the project’s viability by Chicago-based engineering consultant Sargent & Lundy.

“Sargent & Lundy is a globally leading firm that has no reason to lie,” Mandelstam said. “… (Their) report is on our website, and we use it every day. The numbers are there for everyone to see.”

In addition, Enchant is putting its reputation on the line, spending its own risk capital with no state or federal assistance, Mandelstam said.

“We’ll put out $1.3 billion to build the (carbon-capture) plant before we earn even a nickel back,” he said.

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