Quantum Utility Generation said Thursday that it has partnered with Navasota Energy Services to co-develop three roughly 600-MW peaking facilities in the Electric Reliability Council of Texas, and has agreed to provide financing for the projects.
“We see a specific need in ERCOT for the addition of highly efficient natural gas-fired peaking capacity to support the integration of large-scale renewable resources as well as to offer customers cost-effective protection from the price volatility that has dramatically impacted this market in the past and is expected to increase in the future,” Quantum President Sean O’Donnell said in a statement.
In the same statement, Navasota CEO Frank Giacalone said the company’s new partnership with Quantum “gives Navasota access to significant capital and commercial expertise to complete the construction and financing of our fully permitted sites in ERCOT.” The three projects Quantum and Navasota are co-developing are the Van Alstyne Energy Center in Grayson County; the Union Valley Energy Center in Wilson County; and the Clear Springs Energy Center located in Guadalupe County, TX. One or more of the projects could begin commercial operation as soon as mid-2017, Quantum said.
The Van Alstyne project is sited north of Dallas in ERCOT’s North Zone, and the Union Valley and Clear Springs projects are sited east of San Antonio in ERCOT’s South Zone. Quantum declined further comment.
John Fainter, president and CEO at the Associated Electric Companies of Texas, said all three project sites “are in growth areas,” and he expects “there will be a good bit of peaking capacity needed” in faster-growing parts of ERCOT.
The Capacity, Demand and Reserves report that ERCOT issued earlier in May projected a 17% planning reserve margin for the summer of 2016, and showed the reserve margin rising to 18.5% in 2017 and 21.4% in 2018 before declining gradually to 10.4% in 2025. ERCOT seeks to maintain a reserve margin of 13.75%.
Fainter said that one unknown factor ERCOT and project developers face is the degree to which the U.S. Environmental Protection Agency’s final Clean Power Plan for reducing greenhouse gas emissions resembles the EPA’s draft CPP. He said the EPA’s draft plan sets very aggressive interim goals starting in 2020, and that his hope is in the final CPP the EPA will stretch out the schedule for meeting the plan’s interim goals.