TransCanada: 900-MW Napanee project due for startup in late 2017, early 2018

TransCanada Corp. (TSX, NYSE: TRP) reported in its Feb. 11 earnings statement that construction activities continue on the 900-MW Napanee natural gas-fired power plant in eastern Ontario.

TransCanada expects to invest approximately C$1.0 billion in the facility during construction. Commercial operations are expected to begin in late 2017 or early 2018. Production from the facility is fully contracted with the Ontario IESO.

The Napanee Generating Station is located on the existing Ontario Power Generation Lennox Generating Station site in the County of Lennox and Addington near the Town of Napanee. It features two 271-MW gas turbine/generator sets and one 457-MW steam turbine/generator set. 

In other power developments mentioned in the Feb. 11 earnings statement:

  • Bruce Power: In December 2015, Ontario nuclear plant operator Bruce Power entered into an agreement with the Ontario Independent Electricity System Operator to extend the operating life of the facility to the end of 2064. This new agreement represents an extension and material amendment to the earlier agreement that led to the refurbishment of Units 1 and 2 at the site. The amended agreement took effect on Jan. 1, 2016, and allows Bruce Power to immediately invest in life extension activities for Units 3 through 8. TransCanada’s share of investment in the Asset Management (AM) program to be completed over the life of the agreement is approximately C$2.5 billion (2014 dollars). Its share of investment in the Major Component Replacement (MCR) work, that is expected to occur between 2020 and 2033, is approximately C$4 billion (2014 dollars). Under certain conditions, Bruce Power and the IESO can elect to not proceed with the remaining MCR investments should the cost exceed certain thresholds or prove to not provide sufficient economic benefits. The agreement has been structured to account for changing cost inputs over time, including ongoing operating costs and additional capital investments. Beginning in 2016, Bruce Power receives a uniform price of $65.73 per MWh for all units. This price will be adjusted over the term of the agreement to incorporate incremental capital investment and cost changes. TransCanada has exercised its option to acquire an additional 14.89% ownership interest in Bruce B for C$236 million from the Ontario Municipal Employees Retirement System (OMERS). Subsequent to this acquisition, Bruce A and Bruce B were merged to form a single partnership structure. TransCanada and OMERS each hold a 48.5% interest in this newly merged partnership structure.
  • Ironwood: On Feb. 1, 2016, TransCanada acquired the 778-MW Ironwood natural gas-fired, combined cycle plant located in Lebanon, Pennsylvania, from Talen Energy (NYSE: TLN) for US$657 million before post closing adjustments. The Ironwood power plant delivers energy into the PJM Interconnection power market and will provide TransCanada with a solid platform from which to continue to grow its wholesale, commercial and industrial customer base in this market area.
  • Turbine Equipment Impairment Charge: In the fourth quarter of 2015, TransCanada recorded an impairment loss of C$59 million for turbine equipment previously purchased for an unnamed new power development project that did not proceed.

TransCanada is a leader in the responsible development and reliable operation of North American energy infrastructure including natural gas and liquids pipelines, power generation and gas storage facilities. TransCanada operates a network of natural gas pipelines that extends more than 67,000 kilometers (42,000 miles), tapping into virtually all major gas supply basins in North America. TransCanada is one of the continent’s largest providers of gas storage and related services with 368 billion cubic feet of storage capacity. A growing independent power producer, TransCanada owns or has interests in over 13,100 MW of power generation in Canada and the United States. TransCanada is also developing one of North America’s largest liquids delivery systems.

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.