Basin Electric postpones carbon capture project

Bismarck, N.D., December 20, 2010 – Basin Electric’s directors decided this week that a proposed demonstration project to capture emissions of carbon dioxide at the Antelope Valley Station, Beulah, N.D., will remain on hold until the economic viability of such a venture can be further developed.

This decision was made based on many factors including the results of a Front-End Engineering and Design study that were presented at this month’s regular meeting of directors.

The FEED study, which began in February 2010, focused on capturing a portion (about 25 percent) of the carbon dioxide from one of the Antelope Valley Station’s two units.

The FEED study, coupled with an assessment of the additions necessary at the plant, financing and sequestration costs indicated that a demonstration-scale project could cost as much as $500 million.

Ron Harper, Basin Electric CEO and general manager, was satisfied with the effort. “The FEED study accomplished its purpose. This is the first time in the region that a detailed analysis of a carbon capture project from a conventional coal-based power plant has been conducted,” he said. “We now know the required infrastructure, the cost, and the integration and operational challenges that will be required to continue developing a carbon capture technology. In the current economic climate, we are postponing further investments for the time being, but regard it as important technology to consider for the future.”

Harper said Basin Electric has been working on this project for over three years and has made a huge investment in time, human resources and capital to come to this decision point. In addition to the overall cost of the project, other factors affecting the decision included:

* The market for the sale of carbon for enhanced oil Rrecovery is still developing in this region – without EOR, additional costs for direct geologic sequestration would need to be included.

* The uncertainty of environmental legislation.
* Lack of a long-term energy strategy for this country.

Based on the FEED study, Basin Electric carefully analyzed the technical, operational, regulatory and financial risks for installing carbon-capture technology at a conventional coal-based power plant.

The FEED study was conducted in conjunction with HTC Purenergy, Regina, Saskatchewan, Canada, and Doosan Power Systems, Crawley, UK. HTC has designed a proprietary carbon capture technology, supported by Doosan that is designed to capture 90 percent of the incoming carbon from the exhaust gases produced by one of the AVS units.

The cost of the FEED study was $6.2 million; about half ($2.7 million) of the study was funded by a grant from the North Dakota Industrial Commission. The remainder was funded by Basin Electric.

Even though the project is on hold for now, Harper said Basin Electric will continue to work with the EERC in Grand Forks and the PCOR Partnership to research carbon storage technology.

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