NRG Energy (NYSE: NRG) plans to repower the coal-fired Dunkirk power plant with natural gas, NRG told the New York Power Authority (NYPA) in recent project proposals lodged under the New York Energy Highway Task Force Project, designed to find new electricity suppliers for the state for the future.
NRG said it plans to build, own, and operate the Dunkirk Gas Turbines, a new, natural gas combined cycle gas turbine (CCGT) power plant located in the New York ISO Zone A. The project will be located at NRG’s existing facility in Dunkirk, N.Y.
“NRG proposes to convert its Dunkirk coal facility to a combined cycle unit with generating capacity between 450 and 600 MW,” the proposal said. “The site can accommodate either a one-on-one or a two-on-one CCGT unit, with final design dictated by customer needs. NRG will build gas infrastructure to its existing Dunkirk coal units to enable them to co-fire with both coal and natural gas. Concurrently with this build-out, NRG will construct the combined cycle facility, which will ultimately use the pre-built gas infrastructure and take the place of the existing coal units once it is commissioned for commercial operations.”
Among the project advantages are:
- Best-in-class turbine technology that is capable of providing heat rates below 7,000 Btu/kWh.
- New CCGT designs that can incorporate fast-start elements to their base design, giving CCGT units response times of traditional peaking units.
- The intermittent nature of wind resources can be a challenge for western New York grid operators and a CCGT unit near the wind generators that is capable of load following will stabilize the grid when wind resources are unpredictable.
- Repowering the Dunkirk coal station with a natural gas CCGT will sharply reduce all major emissions.
The repowering project will utilize NRG’s existing on-site 115 kV and 230 kV interconnections. Multiple natural gas pipelines are located within a six-mile radius of the Dunkirk site and are capable of providing sufficient year-round gas supply. NRG said it can achieve dual fuel capability by summer 2013, and expects to achieve full CCGT operations in time for summer 2017. Air permitting under the new Article X process is expected to take up to 18 months. Total capital costs for the CCGT repowering are estimated at levels over $700m or $1,200 per installed kW for a two-on-one CCGT.
Dunkirk currently consists of four active generating units with a total nameplate rating of 635 MW net. Units 1 and 2 are identical 100 MW units that began commercial operation in 1950. Units 3 and 4 are identical 218 MW units that went into commercial operation in 1959 and 1960, respectively. All Dunkirk units use low-sulfur Powder River Basin coal.
NRG proposes to co-fire gas and coal, or fire gas, at Huntley
NRG is also offering to build natural gas infrastructure to its existing Huntley plant in Tonawanda, N.Y., to provide it with dual fuel and co-firing capabilities. Multiple interstate gas pipelines cross within two miles of Huntley. Modifying Huntley as a dual fuel unit would be a cost-effective way to diversify the Western New York generating portfolio and support the reliability of the regional electrical system, NRG noted. The existing Huntley plant has been continually modernized and comprises two coal units with a total nominal rating of 380 MW net. NRG pointed out many of the same benefits for the Huntley project as it did for the Dunkirk repowering.
NRG said it can achieve the Huntley project by summer 2013. Modifications to the Title V air permit are required in order to include natural gas as an accepted fuel source and would take four to six months to complete. Construction of gas laterals from nearby interstate gas lines would take approximately six months. The addition of gas nozzles to existing boilers could be completed as a normal scheduled maintenance. Total capital costs for adding dual fuel firing capability to Huntley would be about $10m-$15m, or $25-$40/kW.
“Today’s low-price gas environment has eroded both the dispatch factors and the gross margins of coal plants to untenable levels, leaving these units to rely largely on capacity payments to cover fixed costs,” NRG pointed out. “Coal plants are labor intensive facilities, often employing three to five times more employees than a comparably-sized gas facility. New York’s rest of state capacity prices are not enough to sustain the high fixed costs of coal facilities. This economic reality has led to a number of other western New York coal plants to file for mothball status, including NRG’s Dunkirk Station.”
NRG also said: “Adding the ability to fire on natural gas at Huntley and Dunkirk allows those units to optimize their economic competitiveness in the market by allowing them to bid the lower cost fuel – whether it is coal or natural gas. Dual fuel capability also provides additional protection by hedging coal units against any further drops in gas prices. Further decreases in gas prices would continue to erode the already diminished operating hours of coal units. By adding gas firing capability, the units can provide the lowest cost power to ratepayers, maximize their dispatch, help cover fixed costs through market mechanisms, and improve the long term viability of these system critical units.”
NRG also offers $1.5bn repowering of Astoria gas plant
NRG separately offered to the state a plan for the Astoria Gas Turbine Power Repowering Project, which will replace 31 existing, 40-year-old simple cycle turbines with four new state-of-the-art combined cycle units at the existing site in Astoria, Queens County, N.Y. The $1.5bn project will be completed in two phases.
- In Phase I, seven existing oil-fired Westinghouse units (totaling 100 MW) will be replaced with two new gas-fired combined cycle units employing state-of-the-art CC-FAST design, totaling 520 MW. If a contract is awarded by year-end 2012, Phase I can be operational by the 2015 summer season and would increase total onsite capacity to 1,020 MW.
- NRG has the flexibility to build Phase II simultaneously with Phase I, or to build in stages. If staged, Phase II would commence shortly after completion of Phase I. Phase II will require the retiring and removal of 500 MW of dual-fuel (gas & oil) Pratt & Whitney turbines, which will be replaced with two new gas-fired combined cycle CC-FAST units, totaling 520 MW. When completed, Phase I and Phase II will increase total on-site generation from 600 MW today to 1,040 MW at completion of repowering.
NRG’s proprietary CC-FAST technology is based on General Electric’s existing 7FA turbine technology that can operate as peaking units and achieve 136 MW of load on the combustion turbine in 10 minutes, and be at full load (260 MW) in 45 minutes. Where traditional CCGT projects require two hours or more to reach full load operations, CCFAST was designed with the demands of the New York Zone J market in mind. Because of its reduced start time, the CC-FAST unit will provide the Astoria project with the flexibility to meet the demand needs of a constrained load pocket while also providing superior efficiency not typically provided by peaking units, NRG said.
The Astoria project has obtained all necessary permitting and regulatory approvals to begin construction. Final air permits were awarded in October 2010 with the unanimous support of the local community. “Today, the Project is the only large shovel-ready CCGT in New York City,” NRG added. “To begin construction, the Project needs to secure a long-term off-take contract in order to obtain project financing. NRG believes that a tolling agreement is the most efficient way to obtain financing. Under a tolling agreement, the Project would receive a monthly capacity payment in return for the satisfaction of specific availability and heat rate guarantees, and the counterparty would be responsible for fuel procurement and scheduling. The counterparty to the tolling agreement will have complete dispatch control of the Project. As the counterparty dispatches the units, NRG will charge a variable payment in addition to the capacity payment. However, NRG can customize contracting opportunities to meet customer preference and financing requirements. NRG can commence construction within six months of the issuance of a notice to proceed and can achieve commercial operations within 36 months of contract award.”
NRG among 85 parties making offers as part of Energy Highway project
New York Gov. Andrew Cuomo said June 29 that 85 private developers, investor-owned utilities, financial firms and other entities responded to the New York Energy Highway Task Force’s Request for Information (RFI) with 130 ideas to upgrade and revitalize the state’s aging infrastructure, totaling more than 25,000 MW. The Task Force issued the RFI on April 11, asking for proposals in support of an energy highway that would simultaneously promote clean energy supplies, job creation and economic growth.
“The overwhelming response shows there is a strong interest in the energy industry to make sizable and needed investment into our energy infrastructure,” said Cuomo. “The next step is to review these ideas and develop an action plan to modernize our energy highway with a focus on improving safety and reliability, making the grid more efficient, improving the environment and lowering costs for consumers. Together with the NY Works projects, the Energy Highway will be essential to rebuilding our infrastructure using clean and efficient energy, while at the same time putting New Yorkers back to work and showing businesses that New York is the place to grow and prosper.”
The information submitted in the RFI responses covers a wide range of issues, from encouraging the development of more renewable sources of energy to suggesting ways the state can foster energy projects to proposing new generation and transmission options. All RFI responses are considered conceptual and none have been endorsed by the Task Force.
The breakdown of responses by category is: 51 for generation, 29 for transmission, four gas pipelines and 46 submissions covering various ideas related to the energy industry. The responses include proposals for more than 25,000 MW of capacity from new and existing transmission and generation.
The Task Force is inviting public comments on the RFI responses. The Task Force will review the responses as it develops an Energy Highway Action Plan, which is expected to be released in the fall.