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A portion of Texas is so rural that the local utility company, San Miguel Electric Cooperative, has only 340,000 customers in 47 counties located between San Antonio, Laredo, and Corpus Christi. Today, much of the electricity for those customers comes from a coal-fired thermal generating station that burns lignite — some of the dirtiest coal there is — but none from renewable energy. That is about to change, thanks to the federal government.
How dirty is lignite? According to Google, it is a soft, sedimentary rock that is combustible and brown in color. It is the youngest type of coal and is considered the lowest rank of coal due to its low heat content. The Lignite Energy Council — yes, there are trade organizations for every known kind of fossil fuel — says lignite is the result of millions of tons of dead and decaying plants in a swampy atmosphere 50 to 70 million years ago that were covered by runoff from the west as the Rocky Mountains formed. The heating content of lignite is approximately 7,000 Btus per pound, and its water content is about 35%. It is one step above peat in the hierarchy of things that can be burned to produce heat to generate electricity.
But lignite also has other stuff in it that gets released when it is burned — mercury, in particular. The 370 MW San Miguel Electric Cooperative power plant, which began operations in 1982, uses locally mined lignite. According to the Pleasanton Express, both the mine and the generating station have faced community opposition because of the air and water pollution they cause. The coal plant is the fourth largest mercury polluter of all power plants in Texas and one of the major sources of mercury pollution from power plants in the United States.
Lignite Out, Renewable Energy In
At the end of December, SMEC was awarded more than a $1.4 billion investment by the US Department of Agriculture Rural Utilities Service program, which provides grants and low interest loans to expand energy that prioritizes greenhouse gas reductions. The Empowering Rural America (New ERA) program is an adjunct to the Inflation Reduction Act. The New ERA funding will make it possible for SMEC to close the thermal generating station and replace it with a 400 MW solar installation coupled with a 200 MW battery storage facility.
“USDA is committed to enhancing the quality of life and improving air and water in our rural communities,” said Agriculture Secretary Tom Vilsack. “The Inflation Reduction Act’s historic investments enable USDA to partner with rural electric cooperatives to strengthen America’s energy security and lower electricity bills for hardworking families, farmers and small business owners.” SMEC is one of 16 rural electric cooperatives eligible to receive nearly $8 billion in funding through the New ERA program.
“The USDA funding represents a new era for the San Miguel Electric Cooperative, which has long been the backbone of electric generation for generations of South Texans,” said Craig Courter, general manager and CEO. “New ERA program funding will allow us to virtually eliminate our greenhouse gas emissions, while continuing to provide affordable and reliable power to rural South Texans.”
SMEC currently has a wholesale power contract with South Texas Electric Cooperative, which in turn supplies power to its distribution cooperative members to provide retail service to 340,000 rural Texas customers. As SMEC converts from lignite to solar, it will enter into a new wholesale power contract with STEC to supply the output of the proposed solar and battery storage facility, which is expected to be operational by 2027.
SMEC will use part of the New ERA funding to refinance debt from its stranded lignite infrastructure. The conversion will not affect its ongoing mine reclamation program which is secured by bonds that will not be released until regulators have determined that the mine reclamation is complete. Reclamation is a vital part of a mining operation’s culture and a priority for SMEC, which works closely with landowners to restore mined land to their specifications. This can include pastureland, which uses vegetation such as grasses to provide feed for ranch animals and build soil stability.
“San Miguel will continue to be an integral part of the energy needs of the South Texas communities we have served since 1982,” Courter said. “With this conversion, we look forward to many more years of providing energy at an affordable rate in a state that continues to grow at an unprecedented pace.”
Geothermal Energy Storage From Sage
Battery storage will not be the only way SMEC will ensure it is able to supply dispatchable electricity to STEC. It is also partnering with Sage Energy, a geothermal energy storage company that is re-purposing deep drilling technology developed by the oil and gas industries to store heated water deep underground. In a press release last August, Sage Energy announced it had entered into a land use agreement with San Miguel Electric Cooperative for a 3 MW Geopressured Geothermal System (GGS) energy storage facility. Sage Energy will operate as a merchant, buying and selling electricity to the ERCOT grid.
The Sage Energy technology offers a reliable and resilient power source that is independent of weather conditions and not reliant on wind or sunshine. “Once operational, our EarthStore facility in Christine (Texas) will be the first geothermal energy storage system to store potential energy deep in the earth and supply electrons to a power grid,” said Cindy Taff, CEO of Sage. “Geothermal energy storage is a viable solution for long duration storage and an alternative for short duration lithium ion batteries. Electric utilities and co-ops like SMEC will be able to use our technology to complement wind and solar, and stabilize the grid.”
The facility will use Sage’s proprietary technology to store energy, targeting 6- to 10-hour storage and delivering a round trip efficiency of 70 to 75%. In addition, water losses are targeted to be less than 2%. At scale, this energy storage system will be paired with renewable energy to provide baseload and dispatchable power to the electric grid. When combined with solar power, Sage’s EarthStore facility enables 24/7 electricity generation at a blended levelized cost of energy at a cost of less than $0.10 per kWh.
Craig Courter added, “Long duration energy storage is crucial for the ERCOT utility grid, especially with the increasing integration of intermittent wind and solar power generation. We are excited to be part of this innovative project that showcases the potential of geothermal energy storage.”
Renewable Energy Policy Considerations
The funding for SMEC is the sort of thing that simply will not exist for the next four years in America. Any available funds will be used to buy more bombs and expand oil and gas operations. In fact, there’s a good chance extremists in the next administration will try to claw back some or all of this money, even though it benefits the very people who supposedly are the “base” for the MAGA crowd — rural voters deep in the heart of Texas.
400 MW of solar coupled with 200 MW of battery storage and 2 MW of geothermal storage are all small potatoes in today’s world where the Chinese are building a gigantic solar installation that will generate enough electricity to meet the needs of all 22 million people who live in Beijing. But it is a vital step forward for the health of the people in the 47 counties SMEC serves. Such a shame that their needs will receive so little attention from the incoming administration. Smaller government for people like them will mean dirtier air and shorter lifespans, but that is a small price to pay for the privilege of being the largest oil and gas exporting nation in the history of the world. Like the tag line from old Toyota commercials said, “You asked for it, you got it.” Sleep tight, America.
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