Gas ‘peakers’ set to kick in when weather sizzles

Jet-engine-like units joining gas plant, solar panels near U.S. 95

Monday, May 19, 2008 | 2 a.m.

Nevada Power's generating plants

Just in time for the triple-digit heat, Nevada Power Co. expects to have the first phase of a $404 million project in the heart of Clark County ready to help keep air conditioners whirring.

If you’ve driven along U.S. 95 near Sunset Road lately, perhaps you’ve noticed the heavy equipment, crews of construction workers or giant gas turbines similar to jet engines arriving at the site. Even if you haven’t, you may know Clark Generating Station as the place where three solar panels sprang up in 2006.

The power plant has been there since the ’50s, when it was built to supplement electrical output from Hoover Dam, and until the solar equipment was installed had relied entirely on burning natural gas to make electricity.

In the past five decades, neighborhoods have grown up around the once isolated plant, a burgeoning population needing ever more electricity.

Over the past year the power company has demolished old gas-burning units capable of providing enough power for 130,000 homes and replaced them with 600 megawatts of state-of-the-art gas “peakers” that can generate enough electricity for 450,000 homes. They’re called peakers because they are intended to kick in and provide a boost of electricity during peak use times — on the hottest days of the year, for example.

Although they will provide more than three times the electricity of the old units, they will emit less pollution, according to the company.

Instead of running constantly in a sort of stand-by mode, the peakers will shut down when they’re not needed, saving on fuel costs, which are passed on to consumers. The new units take only 10 minutes to turn on, compared with half a day for the old plant, which was unable to start up in a hurry if demand suddenly spiked on a spring day.

Dariusz Rekowski, plant director, said half of the first 200-megawatt block, made up of four peakers, is expected to begin powering Southern Nevada homes this week. Each unit has two jetlike engines. Another 200-megawatt block will come online this summer, and a third near the end of the year.

The construction cost will be paid by consumers over the 40- to 50-year lifetime of the plant. Nevada Power will include the cost of the plant in the general rate case to be filed in late 2008, which would take effect in July 2009.

Until then, the utility is unable to estimate the effect on electric bills, spokesman Mark Severts said. But if Nevada Power were to divide the cost of the plant equally among its 807,000 accounts and bill them immediately, it would cost each customer about $500.

The company is also spending $60 million upgrading a 480-megawatt combined-cycle gas plant at the Clark Generating Station to reduce nitrogen oxide pollution as part of a settlement with the federal Environmental Protection Agency.

The EPA alleged that Sierra Pacific Resources, Nevada Power’s parent company, should have installed new pollution controls when it updated its turbines in 1992. Sierra Pacific Resources settled with the EPA last summer, agreeing to pay $300,000 in fines and committing to install a $400,000 solar collector at the Vegas PBS television station in addition to retrofitting the plant. The settlement was one of two between the company and the EPA last year.

Typically the state’s Public Utilities Commission allows the cost of plant upgrades to be passed on to ratepayers, while fines and other settlement costs are borne by investors.

Overall, between the new construction and upgrades, air pollution from the plant will be reduced by 46 percent and its energy production will increase by 65 percent, officials said. Before upgrades and new construction, the plant coughed out about 15,000 tons of federally regulated pollutants each year. Once all three sets of peakers are online at the end of this year, the plant will release 8,100 tons a year of those pollutants, including nitrogen oxides and tiny dust particles.

Sierra Pacific Resources says these peakers are part of a new generation of power plants it has built and bought since the Western energy crisis struck early this decade. It says using natural gas will at least lessen the amount of expensive power it has to buy from the open power market when demand is high in the summer.

“There is so much demand in the Southwest ... that the price of purchased power gets really expensive (during the summer),” said Kirby Lampley, director of regulatory operations for the Nevada Public Utilities Commission. “In 2000 and 2001, the company ran up huge amounts of debt to pay for the power needed to supply the Las Vegas Valley.”

Since air-conditioning is a necessity rather than a luxury during scorching summer days, demand for electricity in Southern Nevada during the hottest times of the year is more than double winter demand.

Still, natural gas has some price volatility too, and Nevada Power executives and regulators alike say the price will continue to increase. Lampley and Paul Maguire, a Public Utilities Commission electrical engineer, said purchased power also comes almost exclusively from natural gas plants.

“The gas cost is the same regardless of who is running the unit,” Maguire said.

Roberto Denis, vice president of energy supply for Sierra Pacific Resources, has said a $1 increase in the price of natural gas over a year costs Southern Nevada electricity consumers $100 million.

Some renewable energy advocates say peakers can be replaced by solar power plants, but John O’Donnell, executive vice president of solar thermal developer Ausra, said gas peakers will continue to play an important role in supplementing utilities’ power supply during hot summer days. At least, that is, until Congress renews tax credits for renewable energy investment and development, which it is expected to do this month, and large commercial solar plants that can store energy come online in the desert.

O’Donnell said solar plants even now provide energy during peak hours, when it’s most valuable, and offset emissions from traditional fossil fuel plants. He said utilities should look ahead two to three years to when solar plants will be in greater demand, and start the five- to six-year process of building them now.

Although utility executives say solar can’t get the job done — because it isn’t always available and is too expensive to replace gas — O’Donnell said commercial solar thermal plants the size of coal plants and featuring hours of storage aren’t far off.

As the price of gas continues to rise, energy from solar plants, which operate on free fuel, will seem like a bargain. Add in the price of potential congressional carbon legislation, which will affect natural gas plants as well as coal plants, and solar will seem cheap indeed, he said.

But for now, the utility says, solar can meet demand only from noon to dusk. Just as solar plants are winding down production for the day, Las Vegans are heading home and turning up air conditioners and lights.

Discussion: 7 comments so far…

By jfnance32

5/19/08 at 11:03 a.m.

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This paragraph says it all: “As the price of gas continues to rise, energy from solar plants, which operate on free fuel, will seem like a bargain. Add in the price of potential congressional carbon legislation, which will affect natural gas plants as well as coal plants, and solar will seem cheap indeed, he said.”

The price of energy will go through the roof.

Solar and wind is expensive.

Liberals are geniuses!!!!!!!!!!!!!!!

The only way solar and wind make sense is that other energy prices will escalate.

Why?
1. Cut off supplies…no coal plants, no oil drilling, no natural gas platforms off the coast, no nuclear energy
2. Tax coal, oil and natural gas
3. Pour tax money into solar and wind to bring down its "cost"

In twenty-five years from now there is going to be lot of people out of work and pissed off.
By The_Onion

5/19/08 at 3:07 p.m.

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jfinance-

I don't know where you get your ideas from, but let me set you straight.

1. Cutting off supplies will never happen overnight. As these new efficient technologies, coupled with common-sense and money saving conservation, come on-line we will be able to phase out these older technologies that rely on finite, carbon intensive resources to operate. Nuclear had it's turn and enjoyed quite a feast on our pocketbooks through well lobbied subsidies.

2. Taxing coal, oil, and natural gas is always going to be necessary. It is prudent to place taxes on resource extraction, seeing as how they are the publics' resources, the revenue generated should come back to us. If we take away "corporate welfare" for oil, gas, and coal and place it with technologies that have infinite resources, then aren't we doing more for the public good? Consider the externalities of fossil fuel generation, including pollution and global warming. How do we, as taxpayer's, get stuck footing the bill to clean-up our environment and mitigate global warming pollution? Big Oil and Big Coal have GREAT lobbyists and give out lots of $$ to elected officials.

3. The "cost" discrepancy with with renewable energy is greatly exaggerated by the fossil fuel industry. They have enjoyed billions in subsidies over the past 50 years. If we shift these subsidies to efficiency and renewable energy than we will get more in return.

In response to the out of work comment... do your research. The number of jobs that will be created by the renewable and efficiency economy in America, and will stay here, are in the 100's of thousands. If we stop mining coal and start harnessing wind and solar we will create 1000's of new, safer, cleaner jobs.
By jfnance32

5/19/08 at 4:18 p.m.

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Response

1. It would be great if cutting off supplies would be done smartly but it is not. Right now, there is so much resistance to coal, nuclear and offshore drilling that nothing of much quantity is getting built. It is impossible for renewables to make up the difference.

There will be a terrible energy crisis in 20 to 25 years.

2. Of course they are taxing oil and coal. But they are going to greatly increase taxes on them in the Obama presidency.

3. You probably right on this point. I think Australia did a study on much tax payer money was spent on building renewable systems.

I think it said for every $800k in taxpayer money spent it created one job.
By WaterSource

5/20/08 at 1:01 p.m.

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A truely NEW fresh water Source of one million acre feet of water EACH YEAR for Nevada would not only solve Nevada's water dilemmas, but the excess & reuse could be held in storage for peak power needs which would include safeguarding the 1800 megawatts generated by Lake Mead. The storage facilities and generation plants for the peak power generation, already exist ! Development of the Source will not damage the water rights of others or the environment. The Source is legally available and economically feasible. WaterSource waterrdw@yahoo.com
By sam55

5/20/08 at 1:04 p.m.

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jfnance,
Re: your response to The_Onion.
1. The true costs of coal and offshore drilling are not included in their price to consumers. Conservation of existing fossil energy supplies offers a much bigger and cheaper resource than coal, nuclear, or offshore drilling combined. Besides which, the US doesn't have sufficient oil reserves (even in ANWR) to appreciably affect the price at the pump.
2. The cost of federal tax per gallon of gas is 18 cents; whereas the recent cost increase in gasoline due to investors (current "commodity bubble") is about 80 cents per gallon. (Yes, these are the same rapacious investors that brought us the recent "housing bubble"). The_Onion is correct that taxes on these finite fossil resources should increase to reflect their true value and true environmental costs.
3. You misread The_Onion's comment. It is Oil and Gas (not renewables) that have been the beneficiary of billions of dollars of subsidies over the past 50 years. The_Onion suggests diverting this subsidy money to renewables.

With renewables, it is the "economies of scale" that need to come into play. As more PV panels, wind turbines, and electric cars are produced, the more these costs will come down. The US can be a leader in renewable technology, or a dinosaur. So, let's exit the Mesozoic and enter the future!
sam55
By mikeg

5/20/08 at 5:09 p.m.

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Cool article. I had passed that construction on that plant near the 95 and wondered what they were doing. Oh and heck yeah with the Solar power. Build it!

SOUTHERN NEVADA IS THE SAUDI ARABIA OF SOLAR POWER BABY. We're knee deep in that stuff.
By jfnance32

5/20/08 at 11:02 p.m.

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Mikeg:

The article tricked you into thinking it was about the solar panels at 95.

That was a side mention.

The article main point was about the gas turbine system that consumes natural gas during peak periods during the summer.

It has nothing to do with the solar panels.

The solar panels are mainly for show. They contribute very little to the power grid.