NRG wins SCE contract to build power plant at Mandalay Beach, Oxnard

By George Miller

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Existing NRG Mandalay Beach power plant, Oxnard, CA (Photo: Citizensjournal.us)

The contract  award by Southern California Edison (SCE) doesn’t necessarily mean that  NRG will be building the power plant- only that their bid to do so has been accepted. It would have to go through other approvals.  The California Energy Commission has final authority on any decision to build or operate a power plant statewide. Because of the tight timeframe to bring a new plant on line by 2020, which would require starting work in 2018, NRG tells us that they will act immediately to begin obtaining the necessary permits, while negotiating simultaneously with Oxnard.

This project is a part of an overall plan to ensure adequate clean power for the state’s future, as part of a larger plan to produce 1/3 of power from renewable energy sources, while maintaining  adequate baseline power sources.

Some Background:

NRG is the current operator of the Mandalay and Ormond Beach power plants. The current units, except for one 49 MW new technology  “peaker” unit at the Mandalay site,  have a collective capacity of about 2,000 megawatts (About the same as the San Onefre nuclear plant), are a half-century old, obsolete, unsightly and will not conform to 2020 regulations without expensive modifications. NRG’s initiative to Oxnard on a new power plant earlier this year was answered with a temporary (up to 18 month) moratorium on any energy development in Oxnard while the coastal plan and ordinances were being modified.

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The NRG press release announcing the contract award appears at the bottom of this article and includes the following main points:

  • Repower the company’s Mandalay facility in Oxnard with 262 megawatts (MW) of newer, more flexible and efficient natural gas generation under a 20-year PPA with SCE

  • Install 178 MW of “Preferred Resources” that include both demand response and energy efficiency products to be deployed under long-term contracts at sites across Southern California

  • Develop a two megawatt-hour battery storage system

NRG previously sent a letter to the Oxnard City Council, proposing to build a new plant, tear down the old ones in Ormond Beach and Mandalay and environmentally remediate the sites. NRG says that they still await a formal response to that initiative.

The proposed units are quick start, low emission, smaller visual footprint, use 99% less water than the current old units, which could use up to 176,000 gallons per minute at peak capacity, according to plant engineering data.  Air cooling fans, more advanced technology and much lower power output account for the difference in requirements. When asked about the decibel (noise) level of cooling fans, Curry stated that it would comply with all noise level regulations. He did not know what those permissible levels are.  There is also an open question of the disposition of the existing canal from Channel islands Harbor to the ocean, which not only supplies water to cool the power plant, but is a major facilitator of harbor water circulation.

NRG would employ “H Class frame peaker technology” for  a new plant according to Chris Curry, NRG Vice President, Business Development.  Curry told us that a new plant would probably be situated a little north of the existing structure. He also stated that the existing infrastructure including transformers, transmission lines and a high pressure natural gas line made their proposal much more competitive.

Curry wrapped up by saying that they are delighted with the SCE contract award, that NRG had the most compelling offer and that they truly seek a partnership with Oxnard. He hopes the council will look at the offer sent by NRG to the City Council a few months ago and work toward a mutually productive arrangement which will benefit the community.

At past City Council meetings, the mood has been predominantly against building a new plant, although some speakers were in favor of it.  Aesthetics, land use, pollution, Global Warming and sea rise were all stated as objections to the project. The council voted for a moratorium on energy development projects, while updating the coastal plan and ordinances to prevent such a development in the future.

The new Ormond Beach development plan, presented at a recent City Council meeting, calls for restoring the beach area and for the demolition and environmental remediation at the Ormond Beach power plant site.  This plan assumes no cost to the city for accomplishing this, but NRG has linked that and Mandalay plant demolition with city acceptance of building  a new technology 262 MW plant at the Mandalay site. The project would also bring hundreds of jobs and additional money to the community for construction, then dozens of jobs and more revenue for the subsequent operation of the new facility. Curry told us that demolition costs would likely be in “the high tens of millions of dollars.” The whole initiative would be “hundreds of millions.”

Mayor Flynn’s position

We talked with Mayor Flynn, who is still on cloud 9 after winning re-election with 60% of the vote in a three-way race. Flynn favors removal of all power plants and restoring pristine beaches in Oxnard.  He says that the beaches are Oxnard’s #1 asset and that they are “sacred.”  When asked if he would negotiate with NRG, he said “that’s like asking if Obama would sit down with the Republicans after they took over the Senate- of course he would” (that remains to be seen). While he is willing to sit down and talk with NRG, he believes that they have a moral and maybe even a legal obligation to remove the plants regardless of whether the new plant is built. He doesn’t think that NRG is anxious to buck the city, Coastal Commission and incur the ill will of the people over this and says that NRG has only offered to take down the old plants in return,

 

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Contracts Signed in Southern California Edison Solicitation Further Enable NRG Energy to Help Transform California’s Energy Future

SCE contracts and previously announced Carlsbad project represent more than one gigawatt of “Preferred Resources” and fast start units to continue NRG’s efforts to reduce emissions and ensure continued reliability, while helping integrate renewable power

SAN FRANCISCO; November 5, 2014 – NRG Energy (NYSE: NRG) has been awarded multiple contracts with Southern California Edison to:

  • Repower the company’s Mandalay facility in Oxnard with 262 megawatts (MW) of newer, more flexible and efficient natural gas generation under a 20-year PPA with SCE
  • Install 178 MW of “Preferred Resources” that include both demand response and energy efficiency products to be deployed under long-term contracts at sites across Southern California
  • Develop a two megawatt-hour battery storage system

“This is a tremendous opportunity to advance the forward-thinking efforts of the State of California and Southern California Edison to make a significantly more sustainable and reliable electricity grid,” said John Chillemi, President of NRG Energy’s West Region. “I am proud that NRG can be an important part of this transformation and help meet California’s growing demand for cleaner power and Preferred Resources.”

The repowering of Mandalay is designed to ensure continued reliability and to help integrate renewables into the grid and will also involve the removal the two large steam units at the site, enhancing the coastal viewshed. The repowered Mandalay units are expected to come online in 2020.

The Mandalay repowering project complements NRG’s 600 MW Carlsbad Energy Center, in which NRG will remove the five steam units at its existing site in Carlsbad, California and replace them with smaller, flexible, fast start peaking units. The Carlsbad Energy Center is expected to help integrate renewables into the grid, eliminate once-through cooling, and result in a significantly reduced environmental and visual profile. The Carlsbad Energy Center is expected to come online in late 2017, and is awaiting CPUC approval of a 20 year PPA with SDG&E.

Ongoing Commitment to California

These contracts follow a string of successful projects that have helped bring more renewable power to California through solar and wind generation backed up by new flexible gas generation. NRG, individually or through its subsidiary NRG Yield, Inc. (NYSE: NYLD), owns the 720 MW Marsh Landing, 550 MW El Segundo and 500 MW Walnut Creek power plants that all have fast start capabilities, allowing them to come online quickly when renewable power decreases. In addition, NRG Yield owns the nation’s largest wind farm, located in California. Through both NRG and NRG Yield, the companies provide more than a thousand megawatts of solar to the state from numerous large and small solar arrays, including the world’s largest concentrated solar thermal project.

NRG has transformed Levi’s Stadium in Santa Clara into a solar generator that can power a season of NFL home games. The company also operates the eVgo network which has completed installation on more than 85 DC fast chargers to support California’s 100,000 electric vehicles and is retrofitting eVgo electric vehicle charging sites to be compatible with the new DC fast charger standard being used by the BMW i3, Chevrolet Spark and Volkswagen eGolf. DC fast chargers can charge most electric vehicles to 80% of full charge in 30 minutes or less.

“This is an important opportunity to help realize the aggressive environmental goals of California,” added Chillemi. “We look forward to working with the many stakeholders across the state to make this transformation a reality.”

About NRG

NRG is leading a customer-driven change in the U.S. energy industry by delivering cleaner and smarter energy choices, while building on the strength of the nation’s largest and most diverse competitive power portfolio. A Fortune 250 company, we create value through reliable and efficient conventional generation while driving innovation in solar and renewable power, electric vehicle ecosystems, carbon capture technology and customer-centric energy solutions. Our retail electricity providers serve nearly 3 million residential and commercial customers throughout the country. More information is available at www.nrg.com. Connect with NRG Energy on Facebook and follow us on Twitter @nrgenergy.

NRG Safe Harbor Disclosure

This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements are subject to certain risks, uncertainties and assumptions and include NRG’s expectations regarding the Mandalay repowering and “preferred resources.” Forward-looking statements typically can be identified by the use of words such as “will,” “expect,” “believe,” and similar terms. Although NRG believes that its expectations are reasonable, it can give no assurance that these expectations will prove to have been correct, and actual results may vary materially. Factors that could cause actual results to differ materially from those contemplated above include, among others, general economic conditions, hazards customary in the power industry, competition in wholesale power markets, the volatility of energy and fuel prices, failure of customers to perform under contracts, changes in the wholesale power markets, changes in government regulation of markets and of environmental emissions, and our ability to achieve the expected benefits and timing of our renewable projects. NRG undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The foregoing review of factors that could cause NRG’s actual results to differ materially from those contemplated in the forward-looking statements included in this news release should be considered in connection with information regarding risks and uncertainties that may affect NRG’s future results included in NRG’s filings with the Securities and Exchange Commission at www.sec.gov.

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 Some previous relevant CJ articles 

 

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