ASPEN - Aspen Skiing Co. has taken the big step it needs to offset the power it consumes and gain greater credibility in the battle against climate change.
Skico is investing nearly $5.4 million to pay 90 percent of the construction cost of a plant that will capture methane vented from a coal mine at Somerset, about 10 miles northeast of Paonia, and convert it into electricity.
"It's a phenomenal project," said Skico President and CEO Mike Kaplan while announcing the deal Monday at the Forests at Risk conference in Aspen.
Skico has worked on an agreement with two partners for about one year and finally got a contract signed last week. Skico formed a joint venture with Gunnison Energy, a sister company to the one that owns the Elk Creek Mine, and with Vessels Coal Gas Inc., which put together the plan. Gunnison Energy is owned by William Koch.
The methane must be vented from the coal mine for worker safety. It's currently released into the atmosphere. Now it will be put to good use. The methane will be burned to power a large internal-combustion engine to drive pistons that turn a generator and produce power. The plant will produce 3 megawatts of power. It should be generating 1 megawatt of power by this fall, said Matt Jones, Skico vice president and chief financial officer, and the remaining 2 megawatts should be produced by the end of the year.
Holy Cross Energy has signed an agreement to buy the power from Skico's joint venture. The electricity will go into the grid. It won't directly run Skico's chairlifts, hotels and restaurants. However, the amount of energy produced will equal the amount Skico consumes at its four ski areas, its hotels, the Snowmass Club and all other facilities in one year, Kaplan said.
But the project's advantages go beyond offsetting power consumption. Methane has been labeled "carbon on steroids" by Carbondale energy expert Randy Udall. It contributes to global warming directly and also creates ozone, another powerful greenhouse gas. For that reason, the methane power plant will displace three times as much carbon as Skico produces in a year through burning fossil fuels in all forms, according to Kaplan and Jones.
Jones said Skico should recoup its investment in 10 to 15 years, depending on the cost of maintaining the plant and the price of electricity. The methane power production facility will operate 24 hours per day, every day. It gives Skico a stable source of power.
Kaplan said Skico searched for years for ways to reduce its energy use and acquire power from renewable sources. It constructed a solar farm in Carbondale, installed a micro-hydro project at Snowmass Ski Area and purchases wind power. Those steps "weren't enough," Kaplan said. By finding a project that produces the same amount of power as the company uses and offsets more carbon that it produces, he said the concept could attract attention.
"It can be done. It can be replicated," Kaplan said.
Jones said Skico officials hope other businesses look at the economics of the project and build their own plants that operate off vented methane, regardless of their position on global warming.
"If something makes economic sense, it will happen," Jones said.