Getting to Green: Minnesota's energy future

Climate solution or pipe dream? Carbon capture and coal power plants

a large power generation plant with two smokestacks
Minnkota Power Cooperative wants to add carbon capture technology to a coal-fired power plant that supplies electricity to customers in Minnesota and North Dakota.
Courtesy Minnkota Power

For Mac McLennan, capturing and storing CO2 from a power plant smokestack is part of a new era of carbon management.

Skeptics call it a pipe dream and a way to keep dirty coal plants operating.

The chemical process to capture carbon dioxide from a smokestack using ammonia based solvents has been around for decades.

But the cost of using it on coal-fired power plants in the U.S. has proved insurmountable in the past. A 2021 analysis by the U.S. General Accounting Office found the government invested more than $680 million in eight coal plant carbon capture projects. None are currently operating.

McLennan, the CEO of Grand Forks, N.D., based Minnkota Power, argues North Dakota is the ideal place to make it happen.

“I think you’re going to find a series of economic advantages in North Dakota because of the political climate, the geology and a series of other things,” he said.

A new federal tax credit for carbon capture will also be critical for the financial success of the project.

Critics of the proposed project call it a boondoggle that is unlikely to succeed.

Carbon free electricity?

Minnkota Cooperative produces and sells electricity to 11 distribution cooperatives in northwest Minnesota and northeast North Dakota.

The Milton R. Young coal-fired power plant is a key part of Minnkota’s generation capacity.

Project Tundra would capture CO2 from the exhaust at the Young coal plant in western North Dakota, liquify it and permanently store it deep under ground.

The federal government has given North Dakota authority to permit the storage wells near the power plant.

McLennan said Project Tundra will help the cooperative comply with a Minnesota law that requires the use of carbon free electricity by 2040.

“The law says carbon free energy, right? And if carbon free is defined as energy produced with no CO2 going to the atmosphere, then I would argue with you that Tundra qualifies,” said McLennan who acknowledged he worries about regulations Minnesota might impose on the electricity generated from coal.

“If we’re talking about not having more greenhouse gases, let’s talk about the environment and CO2, not about shaping what fuel sources get you there or limiting the opportunities for technology advancements,” he said. “Because the environment doesn’t care about that, the environment cares about tons to the atmosphere.”

a man poses for a portrait
Minnkota Power Cooperative CEO Mac McLennan believes coal-fired power generation is critical for future electric grid reliability.
Dan Gunderson | MPR News

Minnkota says Project Tundra is designed to capture 95 percent of CO2 in the flue gas that it processes. That’s about 4 million metric tons of CO2 a year. If the project meets federal requirements, it would be eligible for an $85 per ton tax credit.

Capturing CO2 from coal-fired power plants is complex because the carbon dioxide in the flue gas is diluted and mixed with other pollutants which can contaminate the solvent used to capture CO2.

Todd Leake doesn’t believe the project will ever qualify for the tax credit. Leake farms near Grand Forks and heads the Sierra Club of North Dakota. The organization, along with Minnesota based CURE submitted comments to the U.S. Department of Energy challenging the projects viability.

The Sierra club points to data showing Project Tundra will only capture about 75 percent of carbon dioxide.

Minnkota says that misrepresents the numbers. The power plant has two generation units. Project Tundra is designed to capture 95 percent of all CO2 from one unit, and it also process a portion of emissions from the second unit. The overall carbon capture from both units would be 75 percent.

‘Borders on the absurd’

That still leaves a significant amount of greenhouse gas emissions, said Leake.

The DOE draft environmental assessment found if the entire life cycle from mining coal to distributing electricity is considered, the project will emit more carbon dioxide than it captures.

“It borders on the absurd to go into the future of power generation in North Dakota with that kind of generation model,” Leake said. “There’s one sure way to sequester carbon from a coal-fired power plant. And that’s leave the coal in the ground. It’s already sequestered by nature.”

Leake said the Milton Young power plant should be retired. At 53 years old it’s already past the average retirement age for coal-fired generation facilities.

But Minnkota said it has invested $760 million dollars in updates since 2007 and wants to recoup those investments by keeping the facility operating.

The U.S. Environmental Protection Agency is proposing new coal plant emission standards that could force most plants to sharply cut CO2 emissions by 2038, or shut down.

McLennan thinks with carbon capture technology, the Milton Young facility can operate for another 20 years.

“Now, the argument will be ‘but you could just put in wind and solar and batteries and get to the same place’” said McLennan. “My argument today is that if I look at the times most needed, wind and solar and battery we have today has completely under performed in terms of keeping the lights on.”

Yellow, white and grey pipes in a large warehouse
A pilot plant the Energy and Environmental Research Center in Grand Forks used to research carbon capture technology.
Dan Gunderson | MPR News

Minnkota buys power from six wind farms, about 35 percent of the cooperative’s electricity supply.

McLennan points to several recent years where temperatures dropped well below zero for an extended period.

“None of our wind was operating — not a megawatt not two megawatts, not three megawatts, zero,” he said. “And so when 35 percent of your supply isn’t operating at 25 degrees below zero, you have to have an asset that you can turn on and it works.”

Capturing CO2 from the smokestack takes a lot of energy, at least 30 percent of the generated power. The flue gas interacts with an ammonia based solution which captures the CO2.

The solvent is heated using electricity and steam from the power plant to release the CO2. The pressurized carbon dioxide is then pumped as a liquid into deep wells drilled into rock formations.

Environmental groups question whether the CO2 will stay underground long term or leak.

John Harju is vice president for Strategic Partnerships at the Energy and Environmental Research Center in Grand Forks, where research on the project was done.

“I’m extremely confident that the technology will not result in leaks, and even if there were modest leaks, they would be detected immediately and appropriate remediation measures would be undertaken,” said Harju.

Project Tundra benefits from having storage wells very close to the power plant said Harju, reducing the cost and the risk.

Federal support critical

The 45Q tax credit of $85 per ton can be a credit or a direct payment to the cooperative. The tax credit also gives an incentive to investors to help pay for the project.

yellow and grey pipes
Research on carbon capture technology was done at the Energy and Environmental Research Center in Grand Forks.
Dan Gunderson | MPR News

There is an additional tax credit if the captured carbon is pumped into oil wells to push more oil out of the rocks, known as enhanced oil recovery. McLennan said Minnkota does not intend to use CO2 for enhanced oil recovery.

When it was designed, the estimated cost of Project Tundra was $1.4 billion. Minnkota now projects an increase of about 30 percent according to McLennan, bringing the cost to nearly $2 billion.

Todd Leake worries he and other Minnkota electric consumers in Minnesota and North Dakota will be left with higher bills if the project fails.

“The longer they screw around with stuff like this and put off the investment in those new gas plants, the more time we waste,” Leake said. “They should be planning to convert to gas and plan to transition the coal mines out. So I don’t have a good feeling as a Minnkota customer.”

McLennan said outside investors will carry much of the financial risk, but Minnkota rate payers could be on the hook for $150 million if the project fails.

Political, emotional issue

The Sierra Club and other environmental groups say the carbon capture project needs more environmental review, and they might sue to demand more study.

But the U.S. Department of Energy has given the go ahead. The agency recently announced $350 million in funding for Project Tundra, and says the project is needed to achieve the Biden Administration’s decarbonization goals.

a man standing in front of rocky terrain
North Dakota Sierra Club chair Todd Leake opposes Project Tundra. He said the project extends the life of a polluting coal power plant, and he worries it will increase the cost of electricity.
Courtesy Todd Leake

Matt Fry is senior policy manager at Minneapolis based Great Plains Institute. He also serves on a White House task force on carbon capture and storage.

It’s unlikely there will be any new coal power plants built in the U.S, and coal is steadily being phased out. Annual plant coal retirements averaged 11.0 GW a year from 2015 to 2020 according to the federal Energy Information Administration.

But Fry thinks carbon capture makes sense for existing plants that will continue to operate as the electric grid transitions to clean energy.

“It’s become very political, and it’s become very emotional,” said Fry. “I have a more optimistic view of things. I think we need to do whatever we can do to to impact the climate in a positive manner. And we’re just arguing a lot now, talking about all the bad stuff rather than actually building projects.”

Minnkota Power Cooperative is finalizing funding for Project Tundra and expects to make a decision on construction by the end of March.

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