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First Posted: 7/30/2014
In the not too distant past, power plants fueled by natural gas were considered a back-up, a source of electricity at peak times to support coal- and nuclear-generated supplies.
Those times are quickly passing.
With natural gas supply cheap and at the ready, and an improving infrastructure to move it just about anywhere, natural gas-powered electricity generation is starting to look like a viable main option.
“It’s a complete game-changer,” Bill Pentak, vice president of investor relations for Panda Power Funds, said. “We’ve not seen changes like this in the power industry in 30 years.
Panda, based in Dallas, Texas, is building two nearly identical natural-gas power plants in Pennsylvania. One is going up near Towanda in Asylum Township, Bradford County. The second is being built in Williamsport, Lycoming County.
“For most of my career in the power business, and for most of the general partners here at Panda, natural gas was always seen as an intermediate or peaking fuel,” Pentak said.
Drawn out on a bell curve, coal and nuclear had always satisfied the base-load power needs for most of the country. In Pennsylvania, it mostly has been coal, supplying the minimum demand because cost of fuel here is low, Pentak said.
Natural-gas power is ready at the flip of a switch, but it has long been seen as inefficient and, until now, more expensive than coal.
Coal-fired plants usually take about three days to get up and running. A nuclear power plant, between two and three weeks.
“Because of shale gas, for the first time ever, natural gas is now being seen as a base-load fuel,” Pentak said.
THE PLANTS
It was sweltering day in June and the Liberty site near Towanda was swarming with about 300 workers welding enormous hunks of steel and tooling around on heavy equipment.
Panda Power contracted with two companies, Gemma Power Systems of Glastonbury, Connecticut, and Lane Construction of Cheshire, Connecticut, to erect both stations.
At the peak of construction, the companies will have as many as 600 union workers and contractors on site at one time to push the project through to meet the March 2016 deadline, Gemma assistant project manager Daniel Ward said.
No matter how they create electricity, power plants generally work the same way: They generate heat to make steam to make turbines spin.
Beneath a tent, out of view from other workers, contractors from the German tech company Siemens Energy assembled the second of two state-of-the art H-Class single-shaft natural-gas turbines.
Because the technology is so new, unprecedentedly efficient and the market is wildly competitive, Siemens keeps it all wrapped up until the turbine is completely assembled.
Turbine 1 rested atop its mounting block, fully assembled. It looks like a giant green pill capsule.
Beyond the turbine generators, two super cranes worked in tandem to slowly pull a 90-foot-tall heat recovery steam generator module from its delivery truck. The two crane operators at the controls have worked together for more than a decade, and the chemistry they have with each other makes them an invaluable team, Ward said.
The heat-recovery steam generators (often just called HRSG) recycle excess heat from the turbines to create steam, providing additional force to spin the turbines in what is called a combined-cycle process.
Installing just one module — there are 30 of them between the two towers — was expected to take all day, Ward said. But they aspired to gain momentum and possibly install two the following day.
The generators also are air cooled, which means minimal water is needed for production, unlike nuclear or coal plants. While the occasional plume of steam will rise from the stacks, natural-gas plants create very little exhaust.
There are a few water storage tanks on the site, which sits very near the Susquehanna River, for operations; however, the water is to remain in a closed loop.
The air-cooled generators mean no water must be pulled from the river and, more important, no water will be discharged to disrupt the waterway’s ecosystem.
Liberty, which is nearly identical to its sister, Patriot, in Williamsport, is to have the output capacity of 829 megawatts.
To compare with other stations, the Hunlock Power Station near Shickshinny, has a 130 megawatt output capacity. Susquehanna Steam Electric Station near Berwick, a nuclear power plant with dual generating units, has a 1,300 megawatt output capacity.
Liberty and Patriot are to generate enough electricity to power 1 million homes each.
Currently, Moxie Energy — the company that first began the Patriot and Liberty projects then sold them to Panda — is in the pre-planning stages for a third plant. The Moxie Freedom Project to be constructed along the Susquehanna not far from the PPL nuclear plant.
Freedom would have the capacity to produce 900 megawatts.
EMISSION STANDARDS
In June, federal Environmental Protection Agency Director Gina McCarthy unveiled a proposal for new standards on power-plant emissions that could ring the death knell for many U.S. power stations.
If it clears a mound of red tape, the 645-page order drafted as part of the President Barack Obama’s Climate Action Plan will require power plants to reduce emissions by a combined 30 percent by the year 2030.
This could be damning news for coal plants run by companies that lack capital to apply emissions-scrubbing technology. Gas-fired plants, on the other hand, burn with minimal emissions.
Think of it this way, it’s clean enough that we burn it in our homes, Pentak said, so despite the new standards Dan Ward will do nothing different to bring his apparatus into compliance.
Add in the Siemens H-Class generators that operate at about 60 percent efficiency, and HRSG steam generators that retain about 85 percent of water used in a closed-loop system, and Panda’s two plants have an advantage even above other gas-fired plants.
“So, no, we’re not concerned about (the new regs) at all,” Pentak said. “Every other natural gas power plant, really in the U.S., will have to catch up with us in terms of efficiency.”
The power generated at the Panda plants will be uploaded to the PJM Interconnection, also known as the Mid-Atlantic power grid, where in effect it will serve FirstEnergy utility’s customers.
PJM is one of the United States’ largest power grids. Its collective plants have the capacity to produce 70,000 megawatts of electricity.
Electricity generated in Pennsylvania, like water flowing along the path of least resistance, could be used to supply any market within the PJM experiencing an outage or increased demand.
Pentak said adding those two plants to the grid does not guarantee customers will pay less for power.
However, “the most expensive power is no power,” he said. “So what you don’t want is where you have demand that starts to out-step supply.”
The additional generators apply “downward pressure” to the spot price, but ultimately, Liberty and Patriot are updating what Pentak called an aging fleet of power plants throughout the PJM.
Looking at the greater economic impact, Pentak said the consistent supply creates a fertile environment for corporations looking to expand and put down roots.
“That is something that is incredibly important for economic development,” he said. “Businesses are not going to locate to Pennsylvania if there’s not going to be enough power to run their factories.”