17 Apr 15 – Electricity, Natural gas, Renewables, Coal-fired, Gas-fired, Nuclear
Houston, 17 April (Argus) — Permit applications filed by Navasota Energy to build three natural gas-fired peaking power plants in Texas are nearing regulatory approval at the Texas Commission on Environmental Quality (TCEQ).
If all state approvals are obtained, Navasota hopes to begin construction on the three 543MW peakers in time to begin producing electricity as early as the summer of 2017.
An air permit for the Clear Springs Energy Center in Guadalupe County could be issued shortly and TCEQ executive director Richard Hyde said the application for the Van Alstyne plant to be built in Grayson County, Texas, has complied with all state and federal requirements.
Navasota’s third application for an air permit to build a similar peaker in Wilson County, Texas, is also pending.
Houston-based Navasota will build the units to supply peak-power needs of electric cooperatives and municipal utilities in high-growth areas of the state under long-term contracts, allowing the utilities to avoid paying real-time power prices that could soar to $9,000/MWh.
The simple-cycle units will run less than 1,000 hours a year to meet demand during extreme hot or cold weather and to compensate for falling wind generation in the Electric Reliability Council of Texas (ERCOT).
Peak summer 2017 assessments at the ERCOT North hub are $60/MWh, up by 21pc from the summer 2015 block. ERCOT South peak summer assessments gain 27pc in the same period.
Some power plant developers say the economics of the current Texas market under which generators are paid only when they produce power does not justify new construction. But rising power needs for continued oil and gas activity and the potential impact of the federal Clean Power Plan to cut CO2 emissions from coal-fired plants could lead to tighter supplies and higher prices.
The primary grid operator for Texas has 245 active requests for new generators to connect to the high-voltage network, totaling 63,400MW. Natural gas accounts for more than 29,600MW of the total, with nearly half of those permits classified as combined-cycle projects.
Wind generation accounted for 25,300MW in the ERCOT queue, followed by solar projects at 7,500MW.
Luminant notified ERCOT that it will permanently retire three gas units totaling 1,115MW at the Valley power station in Grayson and adjacent Fannin County in early 3 June.
The Valley plant is among several existing plant sites where Luminant has filed air permit applications to build 460MW of new gas generation, but the company has not made a decision to build any of the proposed units.