The Independent Oil and Gas Association of New York (IOGANY) on June 20 threw its support behind a plan by NRG Energy (NYSE: NRG) for a coal-to-gas conversion of its Dunkirk power plant.
IOGANY, founded in 1980, is a non-profit oil and natural gas trade association comprised of more than 350 members engaged in all aspects of the oil and natural gas industry.
“The Dunkirk facility represents one of the largest tax-generating entities in Chautauqua County, providing a full 2.5% of the entire county tax base,” the association said in a June 20 filing at the New York State Public Service Commission. “It supplies more than one third of the City of Dunkirk’s revenues and almost 30% of the Dunkirk school district revenues at around $4 million. It provides a two-fold benefit; increased natural gas demand in-state and significant savings to the power consumer. Repowering from coal to natural gas will retain the capacity to produce power in-state and help lower capacity costs on local electric utilities.”
Re-powering to natural gas represents a unique benefit for many such power plants across the nation, the association said. “Reserves from unconventional shale reservoirs currently being developed in the northeast are projected to last for many decades, representing tremendous long-term stability for fuel sourcing and price,” it added. “Consumers in New York have already realized a substantial cost-savings from this stable and abundant supply of natural gas.”
Local jobs would be preserved at the Dunkirk site in the near-term, providing up to 500 jobs during the 36-month construction cycle, and more than two dozen long-term jobs after the plant is commissioned would be retained, IOGANY said. Infrastructure upgrades in the form of higher-capacity gas pipelines to meet this new demand would also benefit the local economy by generating new construction jobs, it said.
Environmental groups have claimed there are better options, like more energy efficiency. Transmission operator National Grid is pitching transmission upgrades that would allow power to flow to areas to replace the power from a shut Dunkirk plant. The continuation of Dunkirk as a coal plant is virtually impossible, due to the environmental group opposition and also a clean energy push by New York Gov. Andrew Cuomo.
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 used low-sulfur Powder River Basin coal.
NRG on June 5 filed with the New York PSC supplemental comments supporting the repower plan. NRG’s offered options are:
- Option 1—a new 422 MW combined-cycle gas turbine (CCGT) and refueling the existing 75-MW Dunkirk Unit 2 with natural gas.
- Option 2—the refueling of the existing Dunkirk Units 2, 3 and 4 with natural gas.
- Option 3—installation of 285 MW of natural gas-fired peaking units.