EscalanteH2 Power: (might be) Coming soon to a power plant near you

PREWITT, N.M. — “Opportunity” was the word of the day as public officials gathered at the Escalante Generating Station in Prewitt, New Mexico, on Wednesday, December 1, to discuss plans to convert the shutdown coal plant to a hydrogen plant. The prominent figures/speakers in attendance included District 9 NM House Representative Patty Lundstrom, Cibola Communities Economic Development Foundation Executive Director Eileen Yarborough, NM Environment Department Cabinet Secretary James Kenney, NM Economic Development Department Cabinet Secretary Alicia Keyes, and Newpoint Gas CEO/Co-founder of EscalanteH2 Power Wiley Rhodes.

Lundstrom, who grew up just 15 minutes away from the Escalante power plant, opened up by discussing the local response to the plant shutting down in 2020. “We knew it was coming, it was just a matter of time,” said Lundstrom, who represents McKinley County, an area that has 20 percent of its property tax base represented by Escalante Generating Station, the next-door paper mill, and two local coal mines. “So, we were looking at, ‘Oh my gosh, what can we do now, when it comes to redevelopment of this facility.’ And through contributions through Tri-State and the economic development organizations in the area, we started thinking about the best way to do that. And then, lo and behold, there’s a change in the energy market, and hydrogen now becomes one of those major players in energy. And we thought, ‘What a wonderful opportunity.’”

A very timely opportunity, indicated Yarborough, who added that ninety percent of the power plant’s, paper mill’s, and coal mines’ jobs were filled by residents of Cibola County. Also, with just the power plant closure alone, Cibola County lost about 8.4 million dollars a year in payroll, said Yarborough.

Foreseeing that future closures could be possible, Lundstrom and her team began studies on renewable energy options about five years ago. Moving forward from the Escalante plant closure, Lundstrom began to work with CCEDF Director Yarborough, Tri-State, Newpoint Gas, and Tallgrass to further investigate the possibility of investing in hydrogen and making the possibility of a coal-to-hydrogen transition a reality. Now, a year later, all parties seem to be on board with the project, with the final step of making it official being upcoming legislation. Here is what they all had to say:

Rep. Lundstrom: “From my point of view, this is an opportunity for us to grow, to meet all of the renewable standard issues that we’d put forth in the legislature, to help work with climate change, and make sure that we’re reducing carbon emissions, as well as continue to grow the economy in a place that really needs that help. So, I’ll be introducing, along with other legislators, and working closely with this governor, in making sure that hydrogen becomes a major economic development incentive for us to work with, to develop with, and to keep moving for the citizens of New Mexico… We’ve got all the components to make this happen, and why shouldn’t we?”

CCEDF Director Yarborough: “We are very excited about the opportunity to transition this plant to something that can create jobs… It’s critical for Cibola County. We need those jobs. We want those jobs, and we’re willing to do whatever we have to do, within the laws and within reason, to help make this happen.”

NMED Cabinet Secretary Kenney: “I think it’s a great opportunity to hear sort of the real-life impact of what happens when a plant like this closes. And it’s also a great day to be thinking forward and looking forward about the great opportunities that Prewitt, New Mexico will lead the County and even the global community on… The notion that we could get to net zero, which our governor has pledged to do, without a fuel like hydrogen, it’s just not possible… [T]his is one of the crown jewels in New Mexico that is just really shaping the path forward for how we can do low carbon, hydrogen in a way that reaches our climate goals and keeps our economy thriving. And that’s a really great place to be – when our climate/envi ronmental goals align with our economic goals. That just gives us a full push forward to do some great things for the state, and for the world actually.”

NMEDD Cabinet Secretary Alicia Keyes: “I think what we’re here to talk about is the potential of what can happen here in Prewitt. And it’s not just about Prewitt, it’s about New Mexico. And when you look at this facility, what this could mean is 500 million dollars of investment. It could mean 600 construction jobs. And it could mean 60 jobs that are full time here in this area… We have the opportunity to lead as New Mexicans in putting together an energy transition that is successful… If we do not lead on this, we are going to be left behind.”

Newpoint Gas CEO/eH2 Power Cofounder Rhodes: “You know, being the first one in the world at anything is a big task, and as hard as it is to believe standing here in Prewitt, New Mexico, we are on site of the world’s first coal to hydrogen power plant conversion. And that’s a big statement, and it’s a big opportunity. As the cabinet secretaries and Chairwoman Lundstrom have articulated, it’s an opportunity to change the world, not only for power generation, but to also change the world in how we can continue to support these local communities, and the economy not being decimated like it has been in McKinley and Ci bola County… With this [upcoming] legislation, we have the foundation that we can build all these other things from. Building out a facility that uses blue, clean hydrogen with the carbon sequestered, for this power plant is a huge opportunity, taking advantage of what Tri-State has so meticulously maintained for the 40-year-life of this facility and to also respect the effort that Bryan Rychener and his team of operators have done in just maintaining this facility in the way it’s been maintained… We’re very grateful for the opportunity… You have to come to Escalante to believe and to understand the potential of what’s here…”

Rhodes recognized Rep. Lundstrom’s role in the project as being “pivotal,” and said the support given by her and Governor Lujan Grisham has been “immeasurable.” The Newpoint Gas CEO also mentioned the eH2 partner, Tallgrass Energy, and thanked them for participating in and supporting the project the way they have. With such collective support, Rhodes is excited for the opportunity to not only explore hydrogen power, but also technologies such as green cement production, semi-conductor manufacturing, and hydrogen fueled freight.

When asked why they decided to convert rather than build a new facility, Rhodes explained that it was the quality of the Escalante facility, as well as all of the infrastructure connected to it that made converting the best choice. Also, it would cost triple or more the amount to build a new facility than to convert, Rhodes said, adding, “It just doesn’t make sense to waste this facility by building something new somewhere else.”

As for the timeline of the project, Rhodes said that they hope for the hydrogen plant to be operational by the first half of 2025. The plant will produce the same power generation capacity as when it was coal-powered, at 270 megawatts. The job creation process will begin after necessary permits are approved, and construction can actually begin before the permit process is completed, but it all depends on upcoming legislation.

The legislation that Representative Lundstrom, among other legislators, and Governor Grisham are currently working on together will essentially make or break the eH2 Power project. The reason the project needs to be supported by legislation first, Rhodes explained, is because “the power that’s being generated here has to be able to fit into the renewable portfolio standard. The power purchasers won’t be able to purchase it because it doesn’t go towards their carbon reduction measures.”

Tallgrass Energy Vice President Justin Campbell also chimed in, saying, “Escalante is a big opportunity to remove a lot of carbon from the atmosphere, and to generate a lot of direct economic activity, as well as indirect economic activity. But the real key that starts to unlock that is making sure for a resource like this, that’s so heavily decarbonized, to count towards meeting the portfolio standards for the utilities in the state. So, it’s something we’re looking at. I think it’s fair to say [it’s] something that will be on the table.”

The legislation in reference has been named the Hydrogen Hub Act, and the process of taking action on this legislation will begin during the upcoming 30-day legislative session beginning in January. While all parties are optimistic, it will ultimately be the New Mexico legislators that determine whether or not this project becomes a reality. Anyone who is interested in voicing their thoughts on this bill and the impact it will have on Cibola County can contact their NM representatives by visiting https://www.nmlegis.gov/members/find_my_legislator.