Eight Flags Energy nears air permit for Florida cogen project

The Florida Department of Environmental Protection went out for comment on Jan. 22 on a draft air permit for Eight Flags Energy LLC covering a new electrical and steam cogeneration facility to be located in Nassau County in Fernandina Beach, Florida.

This facility will be located within the property line of the existing Rayonier Performance Fibers (RPF) Fernandina Beach facility. The cogen facility will consist of a 21-MW gas turbine generator fired with natural gas to produce electric power, a heat recovery steam generator to generate steam from the waste heat of the gas turbine exhaust, and ancillary equipment. Electric power generated by Eight Flags will be delivered to the power grid for the electric customers of Florida Public Utilities, while steam and hot water produced from the gas turbine waste heat will be sold to the Rayonier facility.

The Eight Flags cogeneration system includes one Solar Titan 250 gas turbine generator set, with a maximum heat input of 188.4 million British thermal units per hour (MMBTU/hr), based on lower heating value of natural gas (or 204.6 MMBTU/hr based on the higher heating value of natural gas). Exhaust gases would pass to a 50-foot bypass stack when steam generation is not desired, or to the HRSG. Without auxiliary natural gas firing in the HRSG, it is capable of generating up to 74,163 lb/hr of steam; at its maximum auxiliary natural gas firing rate of 135.3 MMBTU/hr, the HRSG is capable of generating up to 200,000 lb/hr of steam. Additional heat is recovered from the HRSG stack gas exhaust to heat an average of 300,000 lb/hr (maximum of 449,240 lb/hr) of water to 115 to 130 degrees F. From the HRSG, exhaust gases vent to a 65-foot stack. Additional equipment includes a three-cell mechanical draft cooling tower.

Florida Public Utilities (FPUC) applied in September 2014 at the Florida Public Service Commission for approval of a contract to take power from this new cogeneration facility of Eight Flags Energy. Florida Public Utilities and Eight Flags Energy are both subsidiaries of Chesapeake Utilities Corp. Florida Public Utilities has worked out a 20-year contract for this capacity, with the contract to begin right after this cogen goes into commercial operation. That is expected in the period between July 1, 2016, and Dec. 1, 2016.

The PSC on Dec. 30 approved that contract, writing: “The negotiated contract between FPUC and Eight Flags provides FPUC with a viable source of electric capacity and energy that meets all the requirements and rules governing renewable energy producers. The Eight Flags facility will have the capability to serve a significant portion of FPUC’s base load needs on Amelia Island and should reduce the potential impact of severe weather on critical services. Payments for capacity and energy pursuant to the Agreement are expected to yield $28 million in net present value (NPV) savings to FPUC’s ratepayers over the 20-year term of the Agreement. The performance security requirements of the Agreement sufficiently protect ratepayers in the event of default.”

The commission noted about the evalutation leading up to this project: “FPUC retained Sterling Energy, an energy-consulting group, to provide more in-depth analysis of the options for enhanced energy supply arrangements with the mills. Sterling Energy brought to FPUC’s attention the expanded opportunities that would be available if a Combined Heat and Power unit (CHP) was installed, instead of a gas boiler. The possibility of Rayonier installing and owning such a unit at its mill site was discussed with Rayonier, but Rayonier preferred not to own the unit.”

The PSC also wrote: “The Agreement between FPUC and Eight Flags provides a reliable and substantial generation source to FPUC’s power supply portfolio that is not only located on the Island, but will also provide power to FPUC on a cost-effective basis. The all-in cost of power provided by the Eight Flags facility is projected not to exceed FPUC’s all-in cost of purchased power from JEA. For example, for the year 2016 FPUC projects that the cost from the Eight Flags facility will be $84.30/MWh while the average JEA rate would be $95.40/MWh. Savings are projected each year and overall the Agreement is projected to have a NPV savings of $28 million.”

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.