Carbon Capture Faces a Major Test in North Dakota

Source: By Dan Gearino, Inside Climate News • Posted: Tuesday, July 11, 2023

An expert weighs in about Project Tundra and the viability of retrofitting coal plants to capture carbon.

Milton R. Young Power Plant, located near Center, North Dakota, which is the site of Project Tundra, a plan to retrofit the plant with a carbon capture system. Credit: Minnkota Power
Milton R. Young Power Plant, located near Center, North Dakota, which is the site of Project Tundra, a plan to retrofit the plant with a carbon capture system. Credit: Minnkota Power

Energy companies have talked for years about how carbon capture technology will preserve their ability to burn coal and natural gas in a world that needs to drastically cut carbon emissions.

Last week we learned some more about a project that may be an important test case. Minnkota Power, a rural electric cooperative in North Dakota, announced the next steps for Project Tundra, an attempt to retrofit a 53-year-old coal-fired power plant so that its emissions are captured before they enter the atmosphere, and then buried underground.

So far, attempts to build power plants using this technology, often known by the acronyms CCS or CCUS, have cost billions of dollars and usually failed to work as advertised, as my colleague Nicholas Kusnetz has reported. Despite this track record, the Inflation Reduction Act includes an increase in carbon capture funding, inserted into the bill at the insistence of Sen. Joe Manchin, D- West Virginia.

To better understand this announcement, I spoke with Emily Grubert, an energy systems expert and a professor at the University of Notre Dame. She has deep knowledge of this subject, including from the year, ending last summer, she spent helping to lead the Department of Energy’s Office of Carbon Management.

My main takeaway from our interview was that carbon capture makes sense in hard-to-decarbonize sectors like heavy industry, but it makes little sense as retrofitting for old power plants. One of the reasons is that carbon capture is an electricity-intensive process, so a plant operator is going to need a large supply of electricity to run the system, which adds to the overall costs and means that the plant will cost more to operate than widely available alternatives in the market.

Before I get to our our conversation, here is some of what the people behind the project are saying:

“By working together, we aim to advance carbon capture technology in a way that can serve as a blueprint for our state, nation and world to meet ambitious decarbonization goals,” said Mac McLennan, Minnkota’s president and CEO, in a statement. His company serves customers in Minnesota and North Dakota.

Minnkota has been studying this project for years and has previously estimated a cost of $1.4 billion for the retrofit. The project is to take place at Milton R. Young Power Plant, which has summer capacity of 684 megawatts and burns lignite, a soft, moist kind of coal that is plentiful in that part of North Dakota.

The main point of this latest announcement was to confirm that the project is in development and that Minnkota had a slate of partners to make it happen, including Mitsubishi Heavy Industries, or MHI, a company that will be designing the carbon capture system. The partners say they will decide by early next year whether to continue into the construction phase.

“Project Tundra represents an important step in the scale up of carbon capture technology, which will play an important role in realizing a carbon neutral society,” said Takajiro Ishikawa, president and CEO of Mitsubishi Heavy Industries America, in a statement.

Here is my discussion with Grubert, edited for length and clarity.

When you see an announcement like this, what do you think?

I see all the press releases saying we’re really looking forward to this plant continuing to operate for decades to come, when I think it’s at the end of its life right now. The alternative to CCS would essentially be to shut the plant down, so this is not a situation where you are eliminating emissions from a plant that would have continued to operate anyway. Probably most coal plants only make it to 50-ish years before they need a major overhaul. So this is essentially a rebuild of the plant.

When you look at the additional power needed to run a CCS system, and you just look at the math here, it becomes difficult to justify compared to all of the alternatives that are available in North Dakota and in the Midwest, right?

You’re exactly right. The reason that a lot of states that are coal producers are excited about CCS is because it increases the amount of coal you need to produce. And I think that the point that I would like to make to people is basically this is inherently more expensive [compared to a plant without CCS].

Do you have an idea of what the back-of-the-envelope math is? Like, how might the cost of a megawatt-hour from this plant compare to the cost from this plant after a CCS retrofit?

I haven’t done this math in awhile and I haven’t done it on North Dakota lignite in awhile. I think they’re using an MHI process at Tundra; I’m not exactly sure what the efficiencies are, but ballpark, [the cost difference would be] maybe 50 to 100 percent more, so maybe up to doubling it. [Editor’s note: Inside Climate News asked Minnkota Power for an estimate on the cost of electricity from the plant. A spokesman said that federal tax credits, including a credit that pays $85 per ton of carbon that is captured, “will cover both the capital and operating costs of the facility” and allow the plant to sell electricity at a competitive price.]

If you were talking to people in North Dakota, and you were laying out the numbers, basically saying that we’re going to spend hundreds of millions of dollars in federal money to produce electricity that potentially will cost twice as much, I wonder if the constituents would want that.

I’m not sure how much people are thinking about this as a big cost, rather than as kind of an interesting experiment that allows an industry to stay around. I think that is part of why this is such a hard conversation. In the case of Tundra specifically, my understanding is that a lot of that power is committed to be sold out of state to co-ops in Minnesota and such. And so, it’s unclear who gets hit by the additional costs, particularly when you tie in potentially a big federal grant.

We’ve seen carbon capture projects attempted, in a bunch of places. Five years from now, what happens with this project, do you think?

I think it’s not online within five years. I think, in general, what we’ve seen with big CCS projects is that they tend to be over budget and behind schedule.

In this particular case, because you’re working on 50-year-old units, you also have to go in and fix them before you can do those retrofits. I think you’re probably going to find things that are wrong with the plant that you didn’t expect that you have to fix before you can go in with these really big retrofits. That’s a reason a lot of the time that these projects tend to be over budget or behind schedule.

One of the things that people maybe don’t think about a lot with CCS, with a developing technology, is that at least on the power plant side, specifically on the coal-fired power plant side, these are essentially all retrofits, which means that the kinds of learning that you might expect is actually a lot less than if you were building a whole bunch of identical plants. Every plant is different. And so you’re going to have to go deal with that.

One useful thing when looking at project announcements like this, I think, is to imagine if everything goes right, what that looks like. And when I look at something like this and imagine everything going right, it seems like the result has some serious shortcomings even then.

Yeah, the result is you spend hundreds of millions of dollars of taxpayer money in addition to a whole bunch of ratepayer money.

The best case scenario is you capture 90 percent of the carbon emissions that are coming off of a plant that probably would have otherwise shut down. So that’s still additional carbon, depending on what you think that the plant would have been replaced with.

I feel like it’s important when talking about the shortcomings of carbon capture retrofits to specify that the idea of carbon capture is an important one, right?

Oh, yeah, absolutely.

So walk me through that.

Most of the funding focus, and most of the project focus, I would argue, has been in the power sector. But there’s a bunch of other stuff where we don’t have a lot of great alternatives [and carbon capture makes more sense]. One of the most exciting stories about energy in the last decade or so is how many other alternatives we actually have in the power sector that are viable. When I started in this field, we didn’t have better energy storage, really, wind and solar were, you know, 10 times as expensive as they are now. And so the fact that we actually have alternatives to putting really, really expensive equipment on very old coal fired power plants is the result of a lot of people working really hard to find alternatives.

Carbon capture is important when you don’t have other options. I think we need to save those technologies and really emphasize those technologies where we don’t have other options. And that means a lot more R&D on what this looks like for a cement plant, and probably less R&D on what this looks like for very old coal fired power plants in the U.S.

Other stories about the energy transition to take note of this week:

Wind, Solar Help Texas Meet Record Power Demand During Heat Wave: The Texas power grid was able to meet record demand thanks in large part to an abundant supply of wind and solar power, as Arpan Varghese and Scott Disavino report for Reuters and as my colleague Kristoffer Tigue reported for ICN. The results are not surprising considering the rapid increase in renewable energy capacity in the state. Texas is the country’s leader in wind power and is on track to become the leader in solar.

Tesla Had a Great Quarter, But China’s BYD Did Even Better: BYD, the Chinese automaker, sold more than 700,000 electric and hybrid vehicles in the second quarter, more than double the number from the same quarter last year. Tesla, BYD’s leading rival, also had a great quarter, with sales of 466,000 vehicles, but its growth lagged that of BYD, as Laura He reports for CNN. The two companies are positioning themselves to be the leaders of the automotive market of the near future, and it will be fascinating to see how the competitive balance shifts in the next few years as other major automakers, like Volkswagen and General Motors, continue to ramp up their EV sales.

Rooftop Solar Helps Keep the Lights on in New England Winters: The growth of rooftop solar is helping, as opposed to hurting the reliability of the regional power grid in New England, the grid operator has said. “The findings stand to alter regulators’ view of rooftop solar, which many had seen as a small and unpredictable source of energy,” Benjamin Storrow writes for E&E News. This is encouraging news because New England is a region that doesn’t have much room for onshore utility-scale wind or solar.

On EV Policy, States Are Making ‘Incremental Progress, Not Transformational’: California is the leader in state policies encouraging EV adoption—and no other states comes close, according to a new report from the American Council for an Energy-Efficient Economy. New York ranked second and Colorado ranked third in a report that argues states need to do more to embrace electric vehicles, as Robert Walton reports for Utility Dive. In many states, consumers are ahead of their state leaders in wanting policies supportive of EVs. This is an area where I expect to see some rapid movement, especially in the states that are completely or mostly controlled by Democrats.

A Giant Wind Farm Is Taking Root Off Massachusetts: Stanley Reed of The New York Times reports from the onshore and offshore construction areas during the building of Vineyard Wind 1, which is by far the largest offshore wind farm to reach the construction phase in the United States. The words, videos and images from this story give an idea of the massive scale of these wind turbines and this project, which is the first of many being planned for the waters off of the East Coast.

Clean Energy Reporter, Midwest, National Environment Reporting Network

Dan Gearino covers the midwestern United States, part of ICN’s National Environment Reporting Network. His coverage deals with the business side of the clean-energy transition and he writes ICN’s Inside Clean Energy newsletter. He came to ICN in 2018 after a nine-year tenure at The Columbus Dispatch, where he covered the business of energy. Before that, he covered politics and business in Iowa and in New Hampshire. He grew up in Warren County, Iowa, just south of Des Moines, and lives in Columbus, Ohio.