NRG says new study supports its Dunkirk coal-to-gas repower plan

NRG Energy (NYSE: NRG) said March 26 that an independent study shows that the proposed repowering of the coal-fired Dunkirk power plant in New York to gas-fired generation would provide remarkable benefits to electricity ratepayers, as well as significant economic benefits locally and regionally.

Rather than import power from out of state or even out of the country, the Dunkirk repowering will help ensure that the power used by New Yorkers is produced within the state, for the benefit of its people, NRG said. The study was conducted by Longwood Energy Group LLC and its partners (“the LEG Team”).

“The LEG Team analyzed the impact of the Dunkirk repowering project on the New York wholesale electricity market and the New York State economy,” NRG noted. “The analysis found that when operational, the repowered plant will reduce the wholesale cost of electricity in the state, which can be passed along to ratepayers by their utilities. Specifically, New York wholesale energy prices would be decreased by an average of $1.11 per megawatt hour with the plant repowered rather than retired, and in the Dunkirk vicinity, prices would drop by $2.35 per megawatt hour. Combined, electricity cost savings will exceed $300 million per year, more than $3 billion in total over the ten year period studied.”

NRG Energy has proposed to repower the 540-MW Dunkirk coal-fueled plant in western New York State with a 440 MW combined cycle gas turbine (CCGT) by mid-2017. The repowered plant will provide enough power to supply approximately 11% of the projected 2018 demand in western New York and about 2% of the total projected 2018 demand for New York State.

This new supply will reduce the need for generation from other power plants that would have higher pollutant emissions and operating costs, NRG argued. It would also help eliminate the need for expensive, long-distance transmission projects that provide little or no long-term economic benefits, the company added.

On Jan. 18, the New York State Public Service Commission (NYPSC) directed National Grid to evaluate repowering Dunkirk as an alternative outcome to retirement and to help ensure the reliability of the electrical grid. National Grid will examine the relative costs and benefits of repowering Dunkirk at its existing site, and compare those costs and benefits to the costs and benefits of alternative transmission upgrades over the long term. NRG submitted its repowering proposal on March 25 and National Grid is to provide its recommendations on that proposal and its own alternative to the NYPSC by April 22.

In March 2012, NRG’s Dunkirk Power LLC filed a notice with the New York Department of Public Service (DPS) of its intent to mothball Dunkirk no later than Sept. 10, 2012. The effects of the mothball on electric system reliability were reviewed by Niagara Mohawk Power d/b/a National Grid (NG). As a result of those studies, NG determined that the mothball of Dunkirk would have a negative impact on the reliability of the New York transmission system and that portions of the plant may be retained for reliability purposes via a non-market compensation arrangement.

In July 2012, Dunkirk Power filed a reliability must run (RMR) agreement with the Federal Energy Regulatory Commission. In July 2012, NG and Dunkirk Power agreed on the material terms for a bilateral reliability support services (RSS) agreement and submitted those terms to the NYPSC for recovery in NG’s rates. In August 2012, the NYPSC approved the terms and Dunkirk Power and NG entered into the RSS agreement that began on Sept. 1, 2012.

NRG told the New York Power Authority (NYPA) in a project proposal lodged in May 2012 under the New York Energy Highway Task Force Project that it plans to build, own, and operate the Dunkirk Gas Turbines, a new CCGT power plant located in the New York ISO Zone A.

Dunkirk now consists of four 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, when operating, have lately used low-sulfur Powder River Basin coal.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.