US merchant power producer Talen Energy has verified the feasibility of bringing natural gas to its Montour power plant, in Washingtonville, as it is about to install boiler modification to enable the coal-fired plant to also run on gas. Dual-fuel capability is expected to reduce operating costs.
By the second quarter of 2018, the Montour retrofit is anticipated to be competed which will allow the plant to operate on coal, natural gas or in combination. Engineering and design work is already in progress, though some permits are still pending.
Selecting a partner to build a feeder gas pipeline
For the plant retrofit, Talen has set aside a capital investment budget of $70 million – plus additional expenses for constructing a 15-mile lateral pipeline to bring gas to the 1,500 MW power plant.
Based on a competitive request for proposal (RFP) process, Talen now is the process of selecting a qualified third party to construct, own and operate this feeder gas pipeline. The chosen pipeline company will asked to apply for all necessary permits.
Talen fell short of giving a cost estimate for the pipeline construction and its envisaged gas transport capacity, but hinted it would to disclose these details at its next quarterly call.
Burning Marcellus gas to improve plant profitability
The capacity factor of the Montour plant, a two-unit coal power plant, has reportedly almost halved. The 1,500 MW was operating at 73% of its nameplate capacity in 2010 but by this year, that average capacity factor plunged to around 37%. All of the electricity produced at Montour is sold into into the PJM market zone.
Located in close proximity to Marcellus Shale, co-firing the Montour plant will allow the operator to “leverage the strategic location of the plant," Paul Farr, Talen Energy President and CEO. He singled out the 1,500 MW power plant as a “significant asset in the Talen Energy fleet”, hence the operator is ready to “make the necessary investments to improve its competitive position in the market."
Talen Energy owns or controls 16,000 MW of generating capacity in the US Northeast, Mid-Atlantic and Southwest regions.