DOE: Converting Colstrip coal plant to carbon capture would cost $1.2B

Dive Brief:

A Department of Energy (DOE) analysis says it would cost at least $1.2 billion to turn the Colstrip coal plant in Montana into a clean coal plant.
The analysis, requested by Gov. Steve Bullock (D), envisions a plan to allow the 2,094 MW plant to capture its carbon dioxide emissions and sell them, most likely to companies that would inject the CO2 into mature oil wells to squeeze more out of them.
The DOE estimates CO2 sales from the plant could generate revenues of $3 billion to $4.4 billion over 25 years, based on oil selling for about $106 a barrel. But current oil prices sit below $50 a barrel and haven't crested $100 since the summer of 2014.

Dive Insight:

Many coal-fired plants are facing a limited life span, and some are considering whether or not to try to get a new lease on life.

Talen Energy, the operator of the Colstrip plant in Montana, in May said it planned to quit as the plant operator by 2018. After that, the five owners of the plant would have to look for a new operator.

Talen owns half of units 1 and 2, with the older halves owned by Washington utility Puget Sound Energy. Other owners include Avista, Portland General Electric, PacifiCorp and NorthWestern Energy.

Under a settlement reached last month between the plant owners and environmentalists, the Colstrip plant is scheduled to close it by 2022.

Adding CO2 capture technology to the plant could extend its lifespan, and save local jobs, and there are DOE programs that could fund up to 80% of the conversion cost. But carbon capture and sequestration (CCS) coal plants have proven very difficult to finance and build, even with government support.

The Obama Administration early in 2015 pulled the plug on its FutureGen 2.0 CCS project after delays and rising costs. And the one major coal gasification project being developed in the U.S., Southern Company's Kemper County plant, has been beset by cost overruns and claims of mismanagement.