NRG Energy (NYSE: NRG) on Feb. 11 announced that its Canal 3 development project, a 333-MW gas turbine peaker, cleared the ISO New England tenth forward capacity auction at a price of $7.03/Kw-month.
Canal 3’s selection demonstrates the value of new fast-start, flexible power generation in a region experiencing multiple facility retirements, NRG said. Canal 3 is scheduled to go online in 2019 on Cape Cod, with capital investment beginning in late 2017 and significant development expenditures in 2018. The unit will leverage existing infrastructure at the NRG Canal Station in Sandwich, Massachusetts.
NRG and its affiliates also cleared the rest of its existing New England fleet at the same $7.03/Kw-mo (about $230.50/MW-day) clearing price for the delivery period June 2019-May 2020.
For the new Canal unit, NRG elected to receive the auction clearing price for seven capacity commitment periods, which means that the new unit will receive the FCA10 clearing price for seven years, with years 2-7 adjusted for inflation. This is an important capacity market feature that is helping to bring new generation resources online, NRG added.
NRG EVP of Development John Chillemi said: “We’re especially pleased that our new Canal 3 project cleared the auction, allowing us to provide valuable generation to the region and continue our robust fleet modernization program.”
Canal 3 will primarily use natural gas, with oil as a backup. As a “peaking plant,” Canal 3 will operate mainly during peak demand periods or in the event of unexpected outages. Additionally, Canal 3’s high-efficiency gas turbine will be capable of starting and reaching full capacity in 10 minutes.
In addition to the Canal 3 project, NRG is permitting and building a 1.5-MW community solar project, also on the existing footprint of the Canal Station.