As it prepares to end the use of coal at its Oak Creek Power Plant, We Energies is simultaneously laying plans to build a $1.2 billion natural gas plant on the 1,000-acre Lake Michigan shoreline property.
The company also will spend about $200 million to build a liquified natural gas storage system on the site to assure an adequate fuel supply for the new generating plant, natural gas customers, and the eventual conversion of the nearby Elm Road Generating Station from coal to gas.
The new 1,125 megawatt gas plant is planned to serve as a “peaker” plant, one that can be called on to fill gaps when renewable energy resources aren’t producing power at capacity, but is not intended as a replacement for the coal-generated power from Oak Creek when that plant goes offline over the next two years, said Dan Krueger, executive vice president for infrastructure and generation planning at We Energies’ parent company, WEC Energy Group.
“The key to the renewable energy transition is to have flexible dispatchable gas plants available for those times when the zero carbon generation just can’t meet all the need,” Krueger said. “They really go hand in hand, and one of the most important things to understand is that these kinds of limited-duty gas plants are a key enabler of the transition to zero carbon generation.”
The investment is one of the first to be made public since the utility last year announced a $23.4 billion five-year plan to fund its transition to 80% renewable energy by 2030, ensure reliability and improve its transmission and distribution networks.
The company also plans to install seven gas-fired reciprocating internal combustion engines, capable of producing a combined 128 megawatts of electricity near its Paris Generating Station in Kenosha County. Krueger said those engines can be very quickly started and stopped and better fit the transmission capacity that serves the existing power plant and will connect to the nearby Paris Solar-Battery Park when it is completed later this year.
The estimated cost of that project is $211 million.
The company filed initial planning documents for the Oak Creek and Paris natural gas projects with the Wisconsin Public Service Commission this week.
WEC also filed an application last week to buy 90% of the High Noon Solar Energy Center in Columbia County from its developer, Chicago-based Invenergy. Madison Gas and Electric would own the other 10%. The utilities will pay $981 million for the 300 megawatt solar installation which will produce electricity for up to 90,000 homes, and include a165 megawatt battery storage system. The project is expected to go online in late 2026.
Changing utility rules guiding investment in natural gas
According to a planning document filed with the PSC, construction of the Oak Creek gas plant is expected to begin in mid-2025, with completion of the units expected between late 2027 and the summer of 2028. The gas storage facility is expected to be complete in 2027. The projects require PSC approval and the full application will include more accurate cost estimates.
Short term, the utility is seeking PSC approval to spend $200 million on components of the Oak Creek gas plant that have long lead times for delivery. Krueger said that request reflects the time it takes to build the components as well as the queue of utilities that are seeking the same equipment.
According to documents filed with the PSC, the flurry of activity is being driven by the need to retire coal plants in advance of new EPA pollution rules, changing rules governing utilities’ reliability and seasonal power generating capacity from the 14-state Midwest Independent System Operator and “increasing customer demand from economic development particularly in Southeastern Wisconsin.”
That demand will include Microsoft’s data center development in Mount Pleasant as well as other big energy users that are flooding into the Interstate 94 corridor south of Milwaukee.
Krueger said MISO rules have changed to measure capacity on a seasonal basis and utilities need to be able to meet peak demand in each of those seasons. That means dispatchable, gas-fired backups are especially important in times like winter when MISO capacity ratings for solar generation are dramatically reduced.
“Our first obligation as a load serving utility is to is to prove to the grid operator that we have enough generation that can reliably be counted on to serve our load,” Krueger said. “To meet those capacity numbers from MISO, we have to have plants like this that we get high credit for under the MISO rules. We don’t intend to run them any more than we need to. But our first rule is we have to meet the miso capacity allocation rule.”
Read More:We Energies plans to build $1.2 billion natural gas plant at Oak Creek
2024-02-07 20:23:29