Gulf Power eyes major combustion turbine project early next decade

Gulf Power’s current Ten-Year Site Plan (TYSP) considers either construction of new generating facilities or the purchase of additional generating capacity by June 2023 of the current planning cycle following the expiration of its 885-MW Shell Energy North America power purchase agreement (PPA).

The latest version of this annual site plan was filed April 1 at the Florida Public Service Commission by this Southern Co. (NYSE: SO) subsidiary. Gulf’s PPA with Shell Energy North America will provide firm capacity and energy to serve customers from an existing gas-fired combined cycle unit located in Alabama. This PPA resource has been and will continue to be a valuable resource that will serve customers on a firm basis until it expires on May 24, 2023, said the plan.

The company’s next need is anticipated to be for 866 MW (net summer) of combustion turbine (CT) capacity occurring in June 2023. Gulf will consider its existing Florida sites at Plant Crist in Escambia County, Plant Smith in Bay County, and Plant Scholz in Jackson County, as well as its greenfield sites in Florida at Shoal River in Walton County, at Caryville in Holmes County, and at North Escambia in Escambia County, as potential sites for locating future generating units in Northwest Florida.

Those greenfield sites are:

  • Shoal River Property – The project site would be located on undeveloped Gulf property in Walton County, Florida. If the project is ultimately located on this property, detailed studies will be required to determine the exact size and location of the project site within the property’s boundaries in order to meet Gulf’s needs, while insuring full compliance with local, state, and federal requirements. This property, also referred to as the Mossy Head property, is approximately 3 miles northwest of Mossy Head, Florida. It is located on the Shoal River and can be accessed via a county road from nearby U. S. Highway 90.
  • Caryville Property – The project site would be located on undeveloped Gulf property that is bisected by the Holmes/Washington county, Florida line. If the project is ultimately located on this property, detailed studies will be required to determine the exact size and location of the project site within the property’s boundaries in order to meet Gulf’s needs while ensuring full compliance with local, state, and federal requirements. This property is approximately 1.5 miles northeast of Caryville, Florida. It is located just east of the Choctawhatchee River and can be accessed via County Road 179 from nearby U. S. Highway 90. The Caryville property is certified under the Power Plant Siting Act for two 500-MW coal-fired units, but is also suitable for CT generating units.
  • North Escambia Property – The project site would be located on undeveloped Gulf property that is located in the northern part of Escambia County, Florida, approximately 5 miles southwest of Century, Florida. It is located just west of the Escambia River and can be accessed via County Road 4 from nearby U. S. Highway 29.

On Jan. 22, Gulf filed a petition with the FPSC requesting approval of three solar energy purchase agreements that provide energy produced by solar facilities located in Northwest Florida. These agreements each have a term of 25 years. The three solar facilities (Gulf Coast Solar Center I, Gulf Coast Solar Center II, and Gulf Coast Solar Center III) will be constructed at three military bases in Northwest Florida. The power agreements are with subsidiaries of HelioSage LLC. Those companies are:

  • Gulf Coast Solar Center I LLC will develop, construct, own, operate and maintain a 30-MW solar generation facility on Eglin Air Force Base in Okaloosa County, Florida.
  • Gulf Coast Solar Center II LLC will develop, construct, own, operate and maintain a 40-MW solar generation facility on the U.S. Navy’s Holley Outlying Field in Santa Rosa County, Florida.
  • Gulf Coast Solar Center III LLC will develop, construct, own, operate and maintain a 50 MW solar generation facility on the U.S. Navy’s Saufley Outlying Field in Escambia County, Florida

On Feb. 11, Gulf filed a petition with the FPSC for approval of a wind energy purchase agreement that has a term of 20 years. The Kingfisher Wind project will produce renewable energy from a facility located in Oklahoma. In December 2014, Gulf Power and Morgan Stanley executed an energy purchase agreement with a term of approximately 20 years which is subject to early termination provisions. Included in the agreement are performance security provisions designed to protect Gulf and its customers in case of default and a termination provision in case commission approval is not obtained

Gulf has also finalized plans for each of its coal-fired generating units in order to comply with emission standards required by the Environmental Protection Agency’s (EPA) final Mercury and Air Toxics Standards (MATS) rule. Gulf has determined that transmission upgrades are the best MATS compliance option for Plant Crist. For the co-owned Plant Daniel coal units in Mississippi, the best options to meet MATS emission limits include installing scrubbers, bromine injection, and activated carbon injection. After extensive evaluation of various options for Plant Smith and Plant Scholz coal-fired units’ compliance with MATS, Gulf has determined to retire the coal units at the two plants. Scholz will be retired in April 2015, and the coal-fired units at Plant Smith will be retired in March 2016.

“Gulf’s diverse fleet of existing coal, natural gas, oil, and renewable generating units that remain in-service after the coal-fired units at Plant Smith and Plant Scholz are retired, combined with the Shell PPA capacity, will enable Gulf to meet its reserve margin requirements until June 2023 of the 2015 TYSP cycle,” the plan said. “Because Gulf’s peak demand and energy loads for the 2015-2024 planning cycle are forecasted to be lower than the loads discussed in Gulf’s previous TYSP, Gulf’s current analysis shows that its next planned resource need will be in 2023. This next resource need is for combustion turbine capacity (CT). Therefore, Gulf is currently planning to add this peaking capacity by June 2023 following the expiration of the 885 MW Shell PPA in May 2023.”

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.