CIRI Invests in Clean-Energy Power Plant

Construction on the Middletown Energy Center began fall 2015. The project remains on track to reach completion by spring 2018. Photo by Jason Moore.

Not all fossil fuels are created equal.

With half as much carbon dioxide per unit of energy compared with coal, natural gas has for years been becoming the fuel of choice for new power plants looking to supply low-cost energy while curbing carbon emissions. CIRI is among the companies investing in this growing energy market.

Now under construction, the Middletown Energy Center (Middletown) is a large, natural gas-fired power plant in Middletown, Ohio, located about 30 miles north of Cincinnati. Middletown will serve the PJM (Pennsylvania-New Jersey-Maryland) Interconnection, the largest wholesale power market in North America. CIRI is a major investor in the project, which will replace coal-fired power plants with cleaner, efficient energy from natural gas.

Despite its name, the PJM actually encompasses 13 states along with the District of Columbia: Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia and West Virginia. Once operational, Middletown will be one of the most efficient and clean sources of capacity and energy in the PJM, supplying the power needs of approximately 400,000 homes.

NTE Energy, a Florida-based power developer and energy services provider, began constructing the Middletown plant in October 2015. Through its wholly-owned subsidiary, CIRI Energy, CIRI joins Capital Dynamics and Guggenheim Partners as an equity partner. Construction of the 475-megawatt natural gas electric-generating facility is expected to be completed in 2018.

“The PJM Interconnection is a highly liquid market in which it is easy to buy and sell, and in which a lot of buying and selling takes place, with good information available about short- and long-term supply and demand,” said Stig Colberg, CIRI’s Chief Financial Officer. “Middletown is a steady, reliable asset that complements CIRI’s energy portfolio and positions us well for strategic growth.”

Coal currently accounts for 38 percent of the energy consumed by the PJM’s 61 million customers – more than any other source. Nuclear is second (17 percent), followed by combined-cycle natural gas (16 percent). From an energy-generation standpoint, coal plants have recently accounted for approximately half of the annual energy generated from all power plants in the PJM, followed by nuclear (31 percent) and combined-cycle natural gas (15 percent). As the technology and policies necessary to bring natural gas to market advance, natural gas is poised to unseat coal as the top source of electricity generation.

Emissions rise from the John E. Amos Power Plant, a three-unit coal-fired power plant in West Virginia. Middletown will replace aging coal-fired power plants with cleaner, efficient energy from natural gas. Photo by Jason Moore.

“Forty percent of the coal plants in the PJM are 40 years or older, with many of them scheduled for retirement over the next five years,” said CIRI’s Suzanne Gibson, senior director, Energy Development, and vice president of CIRI Energy. “Middletown, as a reliable, efficient and clean source of capacity and energy, will help fulfill the PJM’s growing energy demands.”

The PJM’s power capacity market ensures there will be sufficient power generation to meet future demand in the region. Energy producers must commit to supply, and utilities must acquire, enough power supply resources to meet energy demand up to three years in the future. “The PJM’s capacity market is a way to ensure the appropriate amount of power supply resources meet predicted energy demands in the future,” Gibson said. “Essentially, power producers such as Middletown get paid for committing to being available to produce power if the market demands it.”

Plant construction, which began fall 2015, continues to be on or ahead of schedule and within budget. Significant recent progress includes completion of a circulating water pipe; foundations for the steam turbine generator, heat-recovery steam generator and combustion turbine; installation of an electrical duct bank; and completion and inspection of water storage tanks.

Preparations for the arrival of the heat-recovery steam generator, including construction of a large steel support frame to hold it, are currently underway. A 710-ton crane is on site to assist with equipment placement. The two natural gas pipeline connections are 90 percent complete, and Duke Energy, a North Carolina-based electric power holding company, has completed the foundation and delivered circuit breakers for the substation.

Dedicated to the project are more than 180 on-site laborers. Since work began 11 months ago, the project has maintained a zero lost-time incident status. The project is approximately 43 percent complete and remains on track to achieve the guaranteed substantial-completion milestone by April 9, 2018.

“CIRI is pleased to be an investor in Middletown,” Colberg said. “The PJM is a compelling market opportunity and Middletown is a well-designed, well-situated project with experienced, aligned partners and strong potential for attractive returns.”

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