Calpine (NYSE: CPN) filed an April 15 proposal with the Minnesota Public Utilities Commission for a major expansion of its gas-fired Mankato plant in Minnesota to meet Xcel Energy’s (NYSE: XEL) current request for proposals (RFP) for new capacity.
Calpine was active last year in an Xcel Energy resource plan case at the commission that resulted in the RFP for 500 MW of capacity in the 2017-2019 timeframe being issued earlier this year.
Calpine and its affiliate Mankato Energy Center LLC own and operate the Mankato Energy Center, a 375-MW natural gas-fired combined-cycle facility located in the City of Mankato, Blue Earth County, Minn. The output of the plant is sold to Xcel under a long term Power Purchase Agreement (PPA).
Calpine now proposes to supply 345 MW of the estimated 500 MW of Xcel Energy’s forecasted capacity and energy needs through a Mankato expansion. The expansion would be through the addition of one natural gas-fired combustion turbine generator (CTG) and an additional heat recovery steam generator (HRSG). The Mankato Expansion would increase the plant’s output by adding 290 MW of intermediate combined-cycle capacity and 55 MW of peaking capacity.
“The Mankato Expansion represents a flexible capacity addition to Xcel Energy’s supply portfolio that is consistent with the Commission’s Order to seek competitive proposals for intermediate and peaking capacity resources,” Calpine told the commission.
Calpine noted that the commission has already approved Mankato to be built in two phases, with a combined capacity of 720 MW, with only the first phase built so far.
“The Mankato Expansion will allow Minnesota to take advantage of what is widely predicted to be a sustained era of low natural gas prices, and will provide low cost load following capability to support the State’s continued investment in intermittent wind and other renewable resources,” Calpine argued. “Calpine’s Proposal is a low cost, energy efficient and environmentally responsible option using state-of-the-art technology to meet a portion of the resource need identified by the Commission that will complement other types of proposals that the Commission may approve in this proceeding.”
Calpine said it is highly confident that gas-fired resources in the Midwest ISO region will continue to experience much higher capacity factors than have been seen in the past. “Natural gas is part of the optimal solution to replace aging coal and nuclear capacity resources in Minnesota and throughout the MISO region as they continue to face environmental and economic pressures that could lead to a greater-than-expected level of retirements,” Calpine added. “Indeed, failing to invest in gas-fired capacity would be imprudent in the context of current and expected market conditions.”
The Mankato Expansion, said Calpine, provides Xcel Energy with the following:
- A high efficiency 2x2x1 Siemens 501FD combined-cycle power plant which provides capacity, energy and ancillary services;
- fast start capability;
- the flexibility to balance Xcel Energy’s current and future intermittent renewable resources;
- automatic generation control (AGC);
- start/stop scheduling flexibility; and
- the ability to use the capacity for either energy or ancillary services (regulation, spinning reserve and supplemental reserve).
Xcel wants to build its own gas-fired peakers
Northern States Power, doing business as Xcel Energy, wants to meet this RFP need with its own self-built generation. It submitted to the Minnesota commission on April 15 a proposal to construct three 215-MW combustion turbine generators with in-service dates between 2017 and 2019. The company requested a Certificate of Need for the first unit, which it proposes at its Black Dog plant in Burnsville, Minn., for service in 2017. The company proposes the second and third units at a new plant site in the Red River Valley, near Hankinson, N.D., for service in 2018 and 2019.
Black Dog Unit 6: The first 215-MW combustion turbine would be placed in service in 2017 at the company’s existing Black Dog plant. This unit would substantially replace the coal-fired capacity at this site, which is scheduled to retire in 2015. The Black Dog plant site allows the company to maximize the use of existing infrastructure and maintains generation within its largest load center, which enhances operating reliability, the company noted.
Red River Valley Unit 1 (RRV 1): The second 215-MW combustion turbine and associated natural gas, transmission, and interconnection facilities would be placed in service in 2018 at a new site in the Red River Valley. This unit would take advantage of existing nearby transmission and natural gas infrastructure and will enhance geographic diversity in the Xcel supply portfolio.
Red River Valley Unit 2 (RRV 2): The third 215-MW combustion turbine would be placed in service in 2019 and added to the plant site established for RRV 1. Alternatively, Xcel Energy could deploy RRV 1 and RRV 2 together in either 2018 or 2019 with corresponding cost savings through simultaneous deployment.
“The Black Dog power plant has provided important capacity, energy, and system stability for over 50 years by delivering power to the 115 kV transmission system that directly serves distribution substations throughout our largest load center, the metropolitan Twin Cities area,” said Xcel. “Black Dog Unit 6 will connect directly to the 115 kV system, ensuring that this important generation source will continue to provide power to the lower voltage system directly to customers. That system configuration exposes customers’ power supply in the metro area to fewer equipment failures and thus enhances reliability.”
Xcel Energy serves about 80,000 customers in the greater Red River Valley, including the communities of Fargo and Grand Forks. This part of the Xcel Energy system is heavily dependent upon the high voltage transmission network to deliver power from distant generation. “Indeed, at this time, Xcel Energy has no power plants located in the Red River Valley,” the company added. “This is the only major load center in our system without Company-controlled generation. The Hankinson site appropriately balances low cost and strategic location. This site is about 70 miles from our Fargo load center, near the juncture of the 230 kV transmission system and a large natural gas pipeline, thereby providing strong economic justification. At the same time, this Red River Valley site places generation closer to our regional load centers than our Twin Cities generators.”
Xcel design based around performance of F class turbines
The design of the peaking capacity Xcel proposes is based on the performance characteristics of F class combustion turbines. “The CT technology available today is significantly improved over that available even a few years ago,” said Xcel. “The model F class CTs now commercially available have fast start capability, reaching 150 MW in 10 minutes from a cold start, and operating in a range of at least 50 to 100 percent load while meeting emission limits, with faster ramp rates over the load range. Maximum output during summer heat and humidity conditions is approximately 215 MW. The maintenance and overhaul cycles have also been significantly improved. The base performance with respect to full load capacity and heat rate have also been improved.”
Black Dog Unit 6 will be located in the existing powerhouse, in the area where Unit 4 currently is located. The exhaust stack will be approximately 200 feet tall and will be located adjacent to the unit, in the area of the existing Unit 4 boiler. Unit 6 will be connected to the existing 115 kV switchyard and transmission system. No upgrades of the 115 kV transmission system are required. The unit will be fueled entirely by natural gas. Center Point Energy currently serves the plant site. “We plan to secure additional natural gas supply through a competitive process beginning in early 2014,” said Xcel. “We anticipate that the successful bidder may need to replace the existing pipeline serving the plant with a new higher pressure natural gas line from the Cedar Town Border station to the plant.”
Red River Valley Units 1 and 2 will connect to a new 230 kV substation with a short double-circuit 230 kV line. Xcel anticipates the system interconnection will require an upgrade of the existing Hankinson-to-Wahpeton 230 kV line.
While Calpine’s Mankato Expansion is mostly baseload capacity, Xcel’s plan involves only peaking capacity. “Peaking resources fit well with our existing mix of generating resources,” said Xcel. “We can more fully utilize coal fired generation at Sherco and King as well as existing combined cycle units at Riverside and High Bridge before making much larger capital commitments necessary for a new combined cycle plant. The lower capital commitment also keeps customers rates lower in the short term. As noted in the Resource Plan docket, an independent power supplier may be positioned to add combined cycle generating capacity without having to commit to an entirely new combined cycle plant. Xcel Energy does not have that alternative available.”
Geronimo Energy and Great River Energy also making offers
Also on April 15, Geronimo Energy threw its hat into the ring with a plan to meet the Xcel Energy RFP. It filed with the commission a Distributed Solar Energy Proposal to provide up to 100 MW of alternating current of solar energy to meet a portion of Xcel Energy’s capacity and energy needs between 2017 and 2019. Geronimo proposes to construct and operate distributed solar energy facilities, ranging from 2 to 10 MW, located on up to 31 sites adjacent to distribution or transmission substations throughout Xcel Energy’s Upper Midwest Service Territory.
Geronimo proposes an in-service date for the project in December 2016. This will allow the capacity to be available to meet Xcel Energy’s peak demand for the summer season of 2017. As proposed, the 100 MW project will provide Xcel Energy with 72 MW of accredited capacity to meet its peak capacity obligations in the Midwest ISO’s Planning Reserve Sharing Pool.
“The Project will also provide approximately 200,000 MWh of energy in Year 1 of which 70 percent is on peak and 100 percent is produced during the hours of 5:00 a.m. and 9:00 p.m. CST,” said Geronimo Energy. “In addition, the Project will supply renewable energy credits that Xcel Energy can use to meet its Renewable Energy Standards. As a renewable resource, the Distributed Solar Energy Proposal has a number of significant environmental benefits, as it has no carbon or other air emissions and minimal water usage and environmental impacts.”
Geronimo added: “The Project has a number of advantages when compared with possible alternatives to meet Xcel Energy’s needs. The project is cost-competitive with fossil fuel alternatives, especially when considering environmental costs. The modular nature of the Project provides flexibility to advance, phase or delay the Project to match Xcel Energy’s fluctuating resource needs. The Project also supplies RECs that can be used to meet Xcel Energy’s Renewable Energy Standards.”
Power generator Great River Energy (GRE) filed an April 15 notice with the commission that it intends to participate in the Xcel RFP process. “GRE has available capacity in the timeframe which Northern States Power (NSP) is seeking additional resources in the Competitive Resource Acquisition Process,” it said. “GRE is offering accredited capacity based on its generation assets to meet a portion of the capacity which NSP is seeking. This offer can provide an alternative to building new generation resources in the desired time period.”
All GRE resources supporting this proposal are located in the MISO Resource Zone 1, the same zone where NSP’s load is located, eliminating any concern about delivery of the product offered, GRE added. Since GRE is offering a capacity only product, no emissions are associated with this offer.
Invenergy Thermal Development LLC may also be making some kind of offer in this RFP, but its April 15 filing was held confidential in its entirety, with no public version available.