Great Northern Power to evaluate development of new lignite power plant

By the OGJ Online Staff

HOUSTON, Aug. 3 -- Great Northern Power Development, a unit of Great Northern Properties LP, is considering development of a mine-mouth lignite fired power plant in North Dakota.

As natural gas price uncertainty continues to haunt the electricity business, coal and lignite have become a more economically viable choice to fuel power plants.

Great Northern filed for matching funds from the state of North Dakota for a feasibility study for the plant and mine. The company is asking the state's Industrial Commission of North Dakota to fund half of the $1.3 million feasibility study that will require 10 months to complete.

Denver-based Great Northern Power will be seeking partners to develop the estimated $700 million project and to operate the mine. The lignite deposit is located in Dunn, Stark, and Morton counties. If the project is economically viable and permits obtained, the company anticipates the power plant will be in operation within 7 years.

The 500-Mw plant will use 3 million tons/year of surface lignite.

The economics are promising, the company said. Delivered fuel costs are 50¢/MMbtu. Total cost of production will be about $30/Mw-hr.

This will yield some of the lowest cost base-load power in the Mid-Continent Area Power Pool (MAPP), said Great Northern.

MAPP is expected to be short of power by the end of the decade, Great Northern said.