A new power plant designed to help reduce global warming will go online earlier than expected to help beat back Texas heat.
NRG Energy said Wednesday it will add a 75-megawatt natural gas generating unit to its big W.A. Parish power plant in Fort Bend County next summer.
The unit initially was scheduled to go online in 2015 as part of a system to capture carbon dioxide – a greenhouse gas linked to climate change – emitted by one of the four coal-fired generators at the plant.
NRG decided to build the unit two years early to generate electricity – and company revenue – during times of peak demand. That typically occurs on summer afternoons when Texans crank up their air conditioning.
The Electric Reliability Council of Texas, which operates most of the state grid, has said a hot summer next year could push power use high enough to cut into ERCOT’s 13.75 percent target reserve margin.
“The new unit will bring additional power to the grid very quickly, cleanly and efficiently,” said John Ragan, president of NRG’s Gulf Coast operations. “It will help expand ERCOT’s reserves during some pretty thin years for generation capacity.”
The company plans to use the unit as what the industry calls a “peaker” – a generator that comes online when demand peaks and wholesale electricity prices approach the state-mandated cap of $4,500 per megawatt-hour.
The unit consists of a generator powered by a gas-fueled jet engine, which allows it to reach full generating capacity within minutes of being fired up.
The jet power is more expensive to operate than other generators, so NRG does not plan to run it except in peak demand periods.
Ragan estimates the new unit could cost as much as $100 million.
He said NRG decided to move up the timetable for the plant before the Texas Public Utility Commission decided to increase wholesale market caps for electricity from $3,000 to $4,500 effective Aug. 1.
In 2015, the unit will be taken off the grid and begin providing power to support the operation of NRG’s pilot Petra Nova carbon capture system for one of the coal units at the Parish plant.
That project, funding for which includes $167 million from the U.S. Department of Energy, will use the captured carbon dioxide to enhance production from aging Gulf Coast oil and gas wells.
“We would have built this unit no matter what as part of our pilot project,” Ragan said.
“At the $3,000 cap prior to Aug. 1, that still would have provided us some opportunity to make some incremental revenue,” he added.
NRG also has submitted a permit for an additional unit for its SR Bertron plant in Deer Park and plans to submit a permit for another large unit in the next few months.
The company also added 1,100 megawatts of generation to the Texas grid this summer from mothballed units.
While NRG is submitting permits for new plants, the market still isn’t priced to support extensive construction, Ragan said.
“NRG is very interested in building new generation in Texas and wants to be ready to start construction on a new unit as soon as the economic conditions allow,” Ragan said.