NRG Energy (NYSE:NRG) is looking to repower its existing electric generation units in Astoria, Queens in New York City – an effort a company official said “obviates the need for additional, more expensive transmission coming in the city.”
Jon Baylor, director of development for New York with NRG, told TransmissionHub June 22 that the company submitted the project in response to the request for information (RFI) issued by New York Gov. Andrew Cuomo’s New York Energy Highway Task Force.
In his 2012 State of the State Address delivered Jan. 4, Cuomo announced a plan to build a private sector funded $2bn “Energy Highway” system that will tap into the generation capacity and renewable energy potential in upstate and western New York to bring low-cost power to downstate New York.
The governor created the task force, which is co-chaired by New York Power Authority President and CEO Gil Quiniones and New York State Department of Environmental Conservation Commissioner Joseph Martens, to oversee implementation of the energy highway initiative and enlist the private sector in an effort to upgrade and modernize New York’s electric system, according to a statement issued in April.
According to the RFI, the energy highway initiative envisions a broad range of projects throughout New York: building new transmission lines or rebuilding and upgrading existing ones; repowering aging power plants to increase their efficiency and make them more environmentally friendly; and building new plants, including those powered by natural gas and by such renewable sources as wind.
The Astoria project consists of 31 oil- and natural gas-fired peaking units that were originally commissioned in 1970; NRG has owned them since 1999. Baylor also said NRG plans to replace the units on site – a total of 600 MW – in two phases.
“In Phase 1 of the Astoria repowering [project], we would [replace] 100 MW of oil-fired units and put in two one-on-one combined cycle units,” he said, adding that each of those one-on-one combined cycle units is about 250 MW.
“So, what we would do is we [replace] 100 MW in Phase 1 and then install 500 MW of combined cycle,” he said.
Each phase is roughly the same, he said, noting that in Phase 2, NRG would “take out the remaining 500 MW on our site and replace it, almost on a one-for-one basis with 500 MW of combined cycle.”
Each phase will cost about $750m, for a total cost of about $1.5bn, he said.
According to NRG, “repowering” Astoria will put 500 New Yorkers to work for three years building the plant; reduce onsite peak day emissions by 98%; displace less efficient units, reducing greenhouse gas emissions by one million tons each year; and increase generating efficiency by 56%. It would also replace older technology units with new, efficient technology and help meet the needs of New York’s growth with enough additional generating capacity to power 320,0000 homes.
NRG also said that its new Astoria units will be able to reach 75% of their generating capacity within 10 minutes.
Baylor said the project hits on a number of key points in the governor’s Energy Highway project, including improving energy efficiency and reducing emissions. Furthermore, it provides additional generation inside the load pocket, which provides grid stability, he said.
The project is fully permitted and, if financed, could be online by summer 2016, he said.
“We’re shovel-ready, but we’ve been shopping for the last year for an off-take contract, so we need somebody to buy the power on a long-term basis,” Baylor said.
Relying on transmission as silver bullet ‘not very wise’
Baylor noted that NRG’s position is that transmission itself is not bad and the company does not have a problem with it.
“The key issue, though, that we see in New York City is, it’s a very unique market, it’s a very constrained market,” he said. “A load pocket like this absolutely has to have generation inside the load pocket because if you have a single line failure or something like that, you’re going to have problems. If the city starts to rely too much on transmission, they’re going to have a potential scenario where if a line goes out, they’re going to have a critical problem in the city.”
He added, “We think that relying on it as a silver bullet is not very wise – you still have to have generation inside the city and you still need to repower a lot of these units inside the city.”
In order for the city to improve its emissions profile and its cost profile of the generation it has on site, a lot of those sites must be repowered, he said.
“When you look at projects in New York City, you really have to ask the question of what project makes the most sense, and I think repowering projects in New York City make the most sense in the near term,” Baylor said.
The Astoria project has the support of Smart Power NY, which is a coalition of business, labor and environmental groups, local and state elected officials, and the local community.
Assemblymember Aravella Simotas told TransmissionHub June 22 that the project is “a win-win for both the industry and the state.”
She said that western Queens, and specifically Astoria, houses power plants that produce more than 60% of the power for all of New York City.
“Many of these plants were built prior to the Clean Air Act and what we need to start doing is looking toward modernizing these plants and that’s exactly what the NRG project will do,” she said.
Baylor said NRG also submitted a response to the RFI involving the company’s proposal to convert one of its coal plants, located just south of Buffalo, N.Y., in the town of Dunkirk, into a natural gas combined-cycle plant.
While Astoria is the “premier project in the state,” the Dunkirk project meets a lot of the objectives of the Energy Highway as well, as it improves air emissions and supports construction of renewable energy resources in western New York, and it has a focus on grid reliability, he said.
A NYPA spokesperson told TransmissionHub earlier this month that about 82 responses to the RFI were submitted. According to the New York Energy Highway website, due to “overwhelming response,” additional time is needed beyond June 15, and RFI summaries will be posted soon.