A Carbon Capture Project Faces a New Delay in a Year of Slow Progress for Coal Power Plants Looking for Retrofits

Project Tundra, a plan to retrofit a North Dakota coal plant with carbon capture technology, has hit a snag following the departure of the lead contractor.

Before that departure, the utility overseeing the project, Minnkota Power Cooperative, had said it would decide this year whether to move forward with the multibillion-dollar plan.

“We are continuing to move forward with development efforts and remain optimistic about Project Tundra’s future,” Ben Fladhammer, a spokesman for Minnkota, said Monday.

He gave no timetable for next steps, and said timing would depend on many factors, including the availability of federal funding, federal environmental rules and changes to project costs due to inflation.

The project’s challenges cap a year in which there have been few signs of progress for U.S. coal-fired power plants whose owners are studying retrofits that would involve carbon capture systems. This is despite substantial funding of carbon capture efforts by the Biden administration.

The incoming administration of President-elect Donald Trump supports funding of carbon capture while also wanting to reduce regulations that have the effect of forcing coal plants to implement that technology. North Dakota Gov. Doug Burgum, Trump’s nominee for secretary of the interior, is one of several appointees who have touted carbon capture as a viable way to allow coal plants to operate in an environmentally friendly manner.

But enthusiasm about carbon capture has yet to translate to substantial emissions reductions, and environmental advocates have long criticized the use of the technology for power plant retrofits as a boondoggle with high costs, steep technical challenges and an overreliance on taxpayer money.

Carbon capture is a process that removes carbon dioxide from smokestack emissions and stops the greenhouse gas from entering the atmosphere. Most of the coal plant projects would aim to store the captured carbon in underground caverns.

Project Tundra is a plan to install equipment that would capture emissions from Milton R. Young Station, a power plant near Beulah, North Dakota. Minnkota has said designing and building the system would cost about $2 billion. The project has been in the works since 2015, but progress has been limited to planning, engineering studies and obtaining some commitments of funding.

The U.S. Department of Energy has singled out Project Tundra as having national importance. The department’s Office of Clean Energy Demonstrations last year awarded the project up to $350 million to help cover costs if construction moves forward. It was the only coal plant retrofit to receive this kind of award.

The Milton R. Young plant has a summer capacity of 684 megawatts, which puts it on the small side of coal plants exploring carbon capture.

TC Energy, the Calgary-based company whose portfolio also includes TransCanada pipelines, was the project’s lead contractor before its decision to step away, which was disclosed last week.

“TC Energy will continue to pursue the development of projects that align with our commercial preferences, maximize the value of our existing assets, and establish a strong competitive position,” the company said in a statement.

Minnkota issued a statement praising TC Energy for its “pivotal role as a partner.”

Neither TC Energy nor Minnkota gave details on why they were ending their partnership.

About a half dozen companies that own coal plants are considering investments in carbon capture retrofits. Inside Climate News reached out to them to see where those projects stand.

Dallman Power Plant: The city-owned utility in Springfield, Illinois, held a ribbon-cutting ceremony in July to mark the beginning of testing and operation for the carbon capture system at the 205-megawatt Dallman coal plant. Local officials say Dallman is the world’s largest carbon-capture demonstration project, but it’s much smaller than the ones being discussed at other U.S. coal plants. The initial cost is $80 million.

Edwardsport IGCC Power Plant: Duke Energy is exploring the possibility of installing a carbon capture system at the plant in Edwardsport, Indiana. The company has received $8.2 million from the Department of Energy to conduct a study of the feasibility of carbon capture at the site. The study is scheduled to be completed by 2026, after which Duke and state regulators would decide on next steps. The plant, with a summer capacity of 555 megawatts, uses a “coal gasification” process to burn synthetic gas derived from coal. 

Four Corners Power Plant: Navajo Transitional Energy Company, a tribal enterprise of the Navajo Nation government, is considering carbon capture at the plant near Fruitland, New Mexico. The federally funded study started in September, with a federal share of $6.6 million. The study is likely to be done in 2025. Four Corners, with a summer capacity of 1,540 megawatts, is the largest power plant in the state. Its future is a subject of controversy because of the plant’s status as a major polluter and its importance for the regional electricity grid. Making decisions about the plant is complicated by an ownership structure in which the utility Arizona Public Service is the majority owner and several other entities, including NTEC, hold smaller shares.

Gerald Gentleman Station: The Nebraska Public Power District continues to explore the possibility of placing a carbon capture system at Gerald Gentleman Station, the largest coal-fired power plant in the state with a summer capacity of 1,365 megawatts. Grant Otten, a spokesman for the publicly owned power company, said there is no timetable for making a decision about whether to move forward with the project.

Rainbow Energy Center: Privately held Rainbow Energy, the owner of Coal Creek Station near Falkirk, North Dakota, continues to work on plans to retrofit the plant with a carbon capture system. The plant, with a summer capacity of 1,142 megawatts, is the largest in the state. Stacy Tschider, the company’s president, said in May at an oil industry conference that plans for carbon capture at the plant remain on track but gave no timetable. Rainbow did not respond to a request for comment.

Prairie State Energy Campus: The plant near Marissa, Illinois, was completed in 2012, making it one of the last coal plants in the country to be built as companies focused on other technologies with lower costs of operation and fewer concerns about emissions. The owner, Prairie State Generating Co., is exploring carbon capture and completed a federally funded study of its options in 2022. Alyssa Harre, a spokeswoman for the company, said Prairie State “continues to evaluate all potential options to reduce its carbon footprint while also maintaining its low-cost power production.” The plant, with a summer capacity of 1,630 megawatts, needs to find a way to reduce its emissions to comply with a 2021 state energy law.

The main reason not to move forward with the projects is the cost. Prairie State’s study includes an estimated capital cost of $2 billion to install a system that would capture and store 95 percent of the plant’s carbon emissions. In addition, the system would cost about $175 million per year for operation and maintenance.

To date, no company has been able to successfully do a carbon capture retrofit on the scale of these large plants. Some researchers and environmental advocates worry that the results would be expensive systems that don’t capture much carbon.

There are two main examples of operational coal plants with carbon capture. First is the 115-megawatt Boundary Dam plant in Saskatchewan, Canada, whose carbon capture system has been online since 2014. The system has had financial and technical problems, and has fallen far short of its target of capturing 90 percent of its emissions.

The second example is the Petra Nova project in Texas, which went online in 2016 on part of a coal-fired power plant and then was idled in 2020 for financial reasons. The carbon capture system resumed operation in 2023.

Funding for carbon capture has soared under the Biden administration thanks to the Infrastructure Investment and Jobs Act, also known as the Bipartisan Infrastructure Law, and the Inflation Reduction Act, bills that President Joe Biden signed in 2021 and 2022, respectively.

Researchers have talked about how carbon capture is needed to deal with emissions from industrial processes such as making cement. But much of the interest in the technology from U.S. policymakers and companies has been for retrofits of coal and natural gas power plants.

“These are still very early projects in terms of thinking through where we are in the industry,” said Jessie Stolark, executive director of the Carbon Capture Coalition, a nonprofit that brings together companies, labor and environmental organizations to look for ways to advance carbon capture and related technologies.

She said she’s not surprised by the delay with Project Tundra because of the complexity and the lack of precedent for doing a coal plant retrofit on such a large scale. Inflation of construction costs has made large carbon capture projects more challenging.

But she thinks any setback with one project should not distract from the larger goal, which is to find effective ways to capture emissions across economic sectors, including power plants and factories.

She said she is optimistic that policies and funding will continue to support carbon capture in the Trump administration.

Opponents of using carbon capture for power plant retrofits have said Project Tundra shows the folly of spending taxpayer money to help justify the continued operation of power plants that should retire and be replaced with cleaner and less expensive options. For example, the Institute for Energy Economics and Financial Analysis wrote in 2020 that Project Tundra was a step in the wrong direction for U.S. energy policy. 

But one close observer of the project says the future may be even more bleak than deploying a system that is too expensive and may not work.

Todd Leake, a farmer who lives near Grand Forks, North Dakota, and a board member for the local Sierra Club chapter, said the future he expects for these plants is the owners talking about carbon capture while they continue with unabated emissions.

He thinks the Trump administration will allow for that pollution by revising clean air rules for power plants, and by paring back on enforcement of rules.

“I imagine that there will be a suppression of enforcement of the regulations,” he said.

Meanwhile, Minnkota’s Fladhammer said he remains optimistic about Project Tundra.

“There are numerous strengths and opportunities for us to build upon as we work to make this world-leading project a reality,” he said.