Prospects for success on a proposal to turn the coal-fired San Juan Generating Station into a carbon-capture project have faded, hurt by the recent mothballing of a similar project in Texas, oppositional market forces, no known investor interest, and political and industry realities that favor less complicated and more cost-effective forms of electricity generation.
IEEFA believes Enchant Energy’s proposal to retrofit the San Juan Generating Station is unlikely to succeed. Potential investors would do well to exercise caution. The risks are high, the rewards highly uncertain. Far more sensible investments opportunities will emerge if the owners and New Mexico regulators and politicians work together to close the plant in 2022 as planned and replace the power with clean, low-cost renewable energy and storage located in the same region, thus helping ease the economic effects of transition while benefitting from the area’s existing transmission infrastructure.