The world's first conversion of a nuclear power plant to a gas fired cogeneration plant has started commercial operation in Midland, Mich.
In addition, the Midland Cogeneration Venture (MCV), the biggest U.S. cogeneration plant, completed sale and leaseback of plant assets totaling $260 million.
The project was completed ahead of schedule and under budget at a cost of about $650 million.
Meantime, Virginia Power Co. received permission from the Federal Energy Regulatory Commission to buy electricity from a $400 million gas fired power plant that project sponsors say will be the biggest independent power plant (IPP) and probably the last IPP of its size in the U.S.
MIDLAND START-UP
MCV, a partnership formed to convert the idle Midland nuclear plant to a combined cycle, gas fired cogeneration plant, provides electricity to Consumers Power Co. and steam and electricity to Dow Chemical Co. (OGJ, Jan. 8, P. 18).
When the last four of 12 gas turbine units go on stream later this spring, the plant will provide 1.37 million kw of electricity and as much as 1.35 million lb/hr of steam.
The original full start-up date was scheduled for fall 1990.
The plant burns about 167 MMcfd of gas. When fully on stream, gas consumption could reach 210 MMcfd. Some of the plant's steam also drives a turbine for electricity.
Currently, the plant generates about 900,000 kw of power.
Without the plant, Consumers Power's 3.3 million customers would have faced possible brownouts and power shortages this summer, as they did the previous two summers, said William T. McCormick Jr., chairman of CMS Energy Corp., Dearborn, Mich.
CMS, a 49% owner of MCV, is parent of Consumers Power.
OTHER CONVERSIONS
McCormick said CMS Energy's Midland experience provides a road map for other conversions of idle nuclear plants elsewhere in the U.S.
"There currently are about $20 billion in abandoned or mothballed nuclear plant assets that can be utilized in conversions similar to what we have accomplished at Midland," he said.
CMS set up a new unit to seek such conversion opportunities. It has a contract to study the feasibility of converting the embattled Shoreham, Long Island, N.Y., nuclear power plant to a gas fired facility. It also is talking with owners of the long delayed Rancho Seco nuclear plant near Sacramento.
With completion of MCV, CMS unit CMS Generation Co. has gross interests in 1.5 million kw and net interests in about 750,000 kw of independent power capacity, making it one of the biggest independent power producers in the U.S.
Shortly before commercial start-up, MCV completed the sale and leaseback arrangement of part of the plant's tax exempt assets, intended to broaden the project's ownership base. Purchasers are not disclosed.
Negotiations are continuing for sale and leaseback of the remaining plant assets, expected to be complete in the second quarter.
Equity partners are CMS Energy unit CMS Midland Inc., Dow unit and limited partner Rofan Energy Inc., Panhandle Eastern Corp. affiliate Source Midland Limited Partnership, Coastal Corp. unit Coastal Midland Inc., Asea Brown Boveri Inc. affiliate MEI Limited Partnership, Fluor Corp. affiliate Micogen Limited Partnership, and Combustion Engineering Inc. subsidiary and limited partner C-E Midland Inc.
VIRGINIA PROJECT
FERC approved rates filed by Virginia Power for purchase of electricity from a 640,000 kw conventional gas fired, combined cycle plant Diamond Energy, Los Angeles, plans to build at Doswell, Va.
The Doswell plant is the first IPP of what could be termed intermediate baseload scale, although it is not intended as a baseload power plant, a Diamond Energy official said.
He also said the project probably will be the last IPP of that size built in the U.S. due to regulatory hurdles and utility misgivings about the IPP industry.
Although many IPPs are operating in the U.S., most are small. An IPP essentially is a nonutility pure power generator that must qualify for an exemption to the Public Utilities Holding Company Act of 1935. Exceptions to the 1935 law are power plants, including all cogeneration plants, that are qualifying facilities under the Public Utilities Regulatory Policy Act of 1978.
Some IPP developers believe IPPs could capture about half of the $100 billion in new power generating capacity needed in the U.S. in the 1990s, with gas and coal scrambling for shares of that growing market (OGJ, June 19, 1989, p. 24).
PROJECT DETAILS
The Doswell project will involve building two units, each rated at 320,000 kw and containing two combined cycle turbines, that will be commissioned at yearend 1991 or early 1992.
The plant is designed to also burn No. 2 fuel oil as a backup.
It will burn 125 MMcfd of gas supplied via a 25 mile, 24 in. pipeline spur Consolidated Natural Gas Co. is laying to link with a 120 mile, $65 million pipeline system CNG unit Virginia Natural Gas Co. is building to connect pipelines in Loudoun County, Va., with Virginia's Tidewater region. The plant's gas supply will account for about 65% of the CNG spur's throughput.
Rates set for power purchases from the plant will be equal to Virginia Power's avoided cost for a baseload plant.
Diamond Energy will bear added costs if it must pay more to produce the power than it can recover through two sales contracts with Virginia Power.
The project is being developed by the Doswell II limited partnership, with Doswell I as general partner. Both are wholly owned subsidiaries of Diamond Energy, in turn a wholly owned subsidiary of Japan's Mitsubishi Corp.
Mitsubishi set up the company in 1987 to develop cogeneration and IPP projects.
Copyright 1990 Oil & Gas Journal. All Rights Reserved.