Bechtel said Oct. 28 that it has been selected by Panda Power Funds to build a new 1,124-MW combined-cycle facility as part of one of the largest coal-to-natural gas power site conversion projects in the United States.
The Hummel Station project will be located at the former site of the coal-fired Sunbury power plant near Shamokin Dam in Snyder County, Pennsylvania. The 400-MW, 65-year old Sunbury plant was retired in 2014.
“The state-of-the-art Hummel generating station will use the latest, most advanced emissions-control technology, making it one of the cleanest natural gas-fueled power plants in the nation,” said Scott Osborne, general manager for Bechtel’s power business. “It will supply nearly twice as much power as the coal plant it replaces and key air emissions will be reduced by more than 90 percent.”
Bechtel is providing project management, engineering, procurement, construction, and startup services for the new power plant, while its consortium partner, Siemens, is responsible for the primary power generation technologies, including the combustion and steam turbines, generators, and heat recovery steam generators. Construction is due to start in November 2015 and will take approximately 30 months. The facility is Bechtel’s fifth combined-cycle plant for Panda Power Funds.
“The natural gas revolution has arrived in the heart of coal country,” said Todd W. Carter, president and senior partner of Panda Power Funds. “I’m proud Panda is leading the way toward clean natural gas-fueled generation. We’re ready to take what we’ve learned in Pennsylvania and apply it to other coal-fired projects across the nation.”
Some 900 jobs will be created during construction, as well as around 35 long-term jobs to operate the plant. A further 52 jobs are also likely to be created within the community to support the plant.
Bechtel is a global leader in the design and execution of complex power projects and has been at the forefront of the power industry for more than 60 years. The company has successfully completed combined-cycle projects all over the world, including in the United States, United Kingdom, Egypt, India, Turkey and Mexico.
Siemens to provide equipment and partial project financing
Siemens on Oct. 28 separately announced that it will be the technology partner for the Hummel Station. Slated for operation in the first quarter of 2018, the facility will be based around a power island consisting of: three SGT6-5000F gas turbines, one SST6-5000 steam turbine, three SGen6-1000A air cooled generators as part of the gas turbine package; one hydrogen cooled SGen6-2000H generator as part of the steam turbine package; three NEM DrumPlus HRSGs; and the SPPA-T3000 control system. The gas turbines, steam turbine and generators will be manufactured at the Siemens Charlotte Energy Hub, which is the main production facility for Siemens 60 Hz power generation.
“We are proud to continue our successful track record with Panda Power Funds with this modern, highly-efficient power plant. As America continues to turn to cleaner-burning, low-cost natural gas, we are pleased to deliver world-class power generation equipment to provide reliable and efficient energy to major power markets in the U.S.,” said Martin Tartibi, Senior Executive Vice President of Energy Solutions Americas at Siemens Power and Gas Division.
“This is the seventh project that Panda has chosen to use Siemens’ advanced technology for our power projects,” said Carter at Panda Power Funds. “We have a great relationship with Siemens and look forward to working with them on the Hummel Station project.”
Siemens Financial Services (SFS) is further supporting the project with a $125 million equity investment. To date, SFS has made a total commitment of more than $400 million for Panda Power Funds’ energy-efficient power plants in the U.S.
“SFS is pleased to invest along with Panda in this modern energy project, which represents our seventh project with Panda. Our investment demonstrates Siemens’ strong commitment to advancing projects that deliver cleaner, more environmentally-friendly energy,” said Kirk Edelman, Head of Energy Finance at SFS.
Hummel Station is the seventh project in the U.S., and the third project in Pennsylvania, awarded by Panda Power Funds to Siemens. Once completed, these seven world-class power generation projects will generate a combined 5,800 MW. Like the nearby Patriot and Liberty plants, Hummel Station will harness local Marcellus gas.
Sunbury Generation lines up financing in cooperation with Panda
Also making an Oct. 28 announcement was Sunbury Generation LP, this time about the successful financing of the Hummel station by development partner Panda Power Funds. The Hummel plant will be the first tenant of the Old Trail Industrial Park, which Sunbury Generation and affiliate Arcova Development LLC have developed. The new facility will occupy an 18-acre parcel of Sunbury Generation’s 192-acre Keystone Opportunity Expansion Zone (KOEZ) at the site of the retired Sunbury Generation coal plant.
The Sunbury/Arcova team led the early development of the project and entered into a joint venture with Panda earlier this year to complete development and arrange financing for the project. Since that time, Panda has taken the lead in developing Hummel Station.
“Panda is a clear leader in the power industry and has been a tremendous partner. We are proud to be part of the development of the new Panda Hummel Station power plant, which continues the site’s sixty-year heritage of providing reliable generation capacity to the region,” said Dave Meehan, President of Sunbury Generation.
The Sunbury/Arcova early development team included technical expert Bibb Engineers, Architects & Constructors of Kansas City, general counsel Sidley Austin LLP of Washington DC, and Perella Weinberg Partners of New York City acting as Sunbury’s financial advisor.
Sunbury Generation LP and its General Partner, Corona Power LLC, were formed in 2006 and acquired the coal-fired power plant assets at the Sunbury coal plant that same year. Sunbury Generation partners include AMCI of Greenwich, Connecticut, JAZ Ventures LP of Latrobe, Pennsylvania, and DALK Land LP of Blossburg, Pennsylvania.
Panda makes its own financing announcement
Panda Power Funds on Oct. 28 also announced completion of project financing. The plant is expected to supply large power markets, including Philadelphia and the New York metropolitan area, when it enters commercial operations in the first quarter of 2018, Panda noted.
Goldman Sachs, ICBC and Investec acted as joint lead arrangers for the senior debt financing of the plant, raising Term Loan A and Term Loan B debt capital totaling $710 million. The Panda Hummel transaction marks the seventh financing of a new, large-scale power facility by Panda Power Funds in three-and-a-half years, representing about $6 billion in total combined capital.
“The natural gas revolution has arrived in the heart of coal country,” said Carter. “I’m proud Panda is leading the way toward clean natural gas-fueled generation. We’re ready to take what we’ve learned in Pennsylvania and apply it to other coal-fired projects across the nation.”
While the new power station will supply 180% more power than the coal plant it replaces, SO2 and NOX emissions will be reduced by more than 90%. The Panda Hummel generating station will also help preserve Pennsylvania’s fresh water resources by using 97% less water for cooling purposes than the retired coal-fired Sunbury plant, Panda said.
The Panda Hummel Station power plant will access natural gas through the MARC 1 and Transcontinental regional gas pipelines. Hummel Station will benefit from its close proximity to the Susquehanna-Roseland Electric Reliability Transmission Project, a recently completed 146-mile, 500-kV transmission line that was one of seven nationwide projects fast-tracked by the Obama Administration’s Rapid Response Team for Transmission.
Panda Power Funds added that it has two generating stations currently under construction in Bradford and Lycoming counties.
- The 829-MW Liberty plant, located in Towanda, Pa., is expected to enter commercial operations in the first quarter of 2016.
- The 829-MW Patriot plant, located near Williamsport, Pa., is expected to enter commercial operations in the second quarter of 2016.
Founded in 2010, Panda Power Funds is a private equity firm headquartered in Dallas, Texas, which has the ability to develop, acquire, construct, finance and operate large-scale, natural gas-fueled power facilities. Panda has three combined-cycle power plants in operation in Temple and Sherman, Texas, and four combined-cycle power plants currently under construction in Pennsylvania and Virginia with a combined capacity of more than 5,800 MW. Panda Power Funds also has a 990-MW project in Southern Maryland in advanced development. The fund built a 20-MW solar farm in southwest New Jersey that is one of the largest solar facilities in the Northeast United States.
Project has been moving forward in other areas
In other recent developments for the Hummel project:
- PJM Interconnection on July 30 filed with the Federal Energy Regulatory Commission an executed interconnection service agreement (ISA) with Hummel Station LLC and transmission owner PPL Electric Utilities. Under this new ISA, which replaces a previous ISA covering a smaller version of the project, on or before Dec. 1, 2017, Hummel Station LLC must demonstrate commercial operation of all generating units.
- FERC issued a July 15 notice about an application from UGI Sunbury LLC for a certificate authorizing UGI Sunbury to construct, own, and operate new interstate natural gas pipeline facilities (called the Sunbury Pipeline Project) that will supply this power plant. The estimated cost of the pipeline is $178.2 million. UGI Sunbury said it received binding bids for 180,000 Dth/d of firm transportation service from Hummel Station.
- The Pennsylvania Department of Environmental Protection said in three notices in the May 30 Pennsylvania Bulletin that it has extended, to June 29, 2018, the expiration date for three air qualiity permits for this project.