Wyoming, one of the most transition-resistant extraction economies in the nation, is facing tough realities as their plans to retrofit two powerplants cannot get past capitalist hurdles.
Even with an approval to bump payer rates by 15% to pay for carbon capture technology on Neil Simpson II and Wygen II coal-power plants, both outside Gillette, Wyoming, no bids came in on the retrofit. Black Hills Energy solicited eight qualified companies to submit a bid.
Two bids were received for an infant technology, cryogenic CO2 capture, but the technology is not yet ready for deployment.
This effort is necessary due to a 2020 Wyoming law requiring regulated utilities to either install CCUS technologies at coal-power plants slated for retirement or prove doing so is cost-prohibitive.
The recently-passed Inflation Reduction Act includes “45Q tax credits” which these power monopolies are hopeful can offer a backstop to their woes.
The 45Q tax credit program incentivizes controverisal carbon capture technology for eligible projects based on each metric ton of CO2 that is captured and securely stored underground or used for certain beneficial purposes, such as enhanced oil recovery. The amount of the credit can vary depending on factors such as the type of storage used and the commencement date of the project.
David Schlissel, an analyst for the Institute for Energy Economics and Financial Analysis has closely followed Wyoming’s effort to force carbon capture retrofits at coal plants in the state.
“We don’t think the technology [retrofitting coal plants with carbon capture] is proven, and we don’t think the economics are positive due to the ratepayers that it will hurt,” Schlissel said. “But I’m not surprised that with all the federal money [45Q tax credits] being offered that companies are showing up with their hands out…I’m sad for the workers and the communities with the power plants,” Schlissel said. “Instead of wasting time on carbon capture, the Legislature should be helping these communities with the transition to new technologies.”