Six New Fracked Gas-fired Power Plants Coming to Ohio

Ohio’s shale natural gas spurs investment in building of plants

From an Article by Dan Gearino, Columbus Dispatch, July 17, 2016

A power-plant building boom has hit Ohio, the first since shale natural gas changed just about everything in the state’s energy landscape.

Six plants are under construction or in the planning stages across the state, including one near Circleville. The projects show how shale gas is transforming the electricity market in a state long associated with coal and coal-fired electricity.

“Don’t be surprised if the future of power generation is natural gas, along with wind and solar,” said Don Mason, a Zanesville lawyer who specializes in energy issues and a former member of the Public Utilities Commission of Ohio. “There is an abundance of natural gas that will provide the price to beat.”

It is no accident that he left coal off his list. Coal-fired power plants are closing because of a combination of old age and the high costs of complying with clean-air rules. Gas plants also emit pollutants, but at much lower levels than coal plants.

Wind and solar power also are adding to Ohio’s capacity, but they are intermittent resources that need to work alongside power plants that can run around the clock.

Notably, the new gas plants are being built by independent electricity companies, not utilities. This shows how deregulation, which Ohio adopted beginning in 1999, has taken root. It also means that investors — not utility consumers — are assuming the financial risks with these multibillion-dollar investments.

“The market is really calling for this new build,” said William Martin, president of CME Energy of Boston, which is involved with the development of Oregon Clean Energy Center, a natural-gas plant being built in the Toledo area. “It’s as simple as that.”

He is talking about the market for electricity. Wholesale electricity prices are low, but investors are betting that the price will rise as more coal plants shut down and demand increases.

Moving forward

Four gas-fired power plants are under construction, one is in the permitting phase with state regulators, and the sixth — the one slated for near Circleville — is soon to seek permits. In all, that is six plants with a combined capacity of about 5,100 megawatts. One megawatt is roughly enough electricity to provide for the needs of about 1,000 houses.

For some perspective, Ohio’s current coal, natural-gas and nuclear plants, representing construction going back to the 1950s, have the combined capacity of more than 25,000 megawatts, according to the federal Energy Information Administration. That means the new plants would be about one-fifth of existing capacity.

The Circleville-area proposal has moved forward quietly. The developer, NTE Energy of Florida, hasn’t filed an application with state regulators, and most of the discussion has been within Pickaway County, involving local officials and property owners.

If all goes according to NTE’s plans, the 1,000-megawatt plant would begin construction in 2018. The company says it intends to spend $900 million on the project. “With natural gas as affordable as it is right now, it makes the region very attractive to develop these projects,” said Mike Schuster, development director for NTE. His company is also behind a 475-megawatt plant in Middletown that is one of the four under construction.

The U.S. benchmark price of natural gas remains less than $3 per 1,000 cubic feet of gas, continuing a run of low prices that began in 2009. The low prices were initially the result of a recession that led to a decrease in demand. Prices continued to drop as energy companies began to extract more gas from shale, including the Utica and Marcellus formations in eastern Ohio.

The Pickaway County plant would be just east of Route 23 and south of Pittsburgh Road, an industrial area just south of Circleville. NTE likes the site because it is close to major gas pipelines and interstate power lines.

Although few people outside the county are talking about the plan, this is a big project for central Ohio. For many years, the largest generator in the region was the 106-megawatt Picway Power Plant in Pickaway County near Lockbourne and the Franklin County line. That plant, owned by Columbus-based American Electric Power, closed last year after 89 years of use.

NTE initially looked at building in western Pickaway County but ran into opposition last fall from residents who said the location was too close to a Westfall school-district building, said Brian Stewart, a Pickaway County commissioner. The company responded by looking elsewhere.

“We really haven’t had much opposition or much angst from the public now that this new site is being considered,” Stewart said. “I don’t think there’s ever been a power-plant project anywhere that hasn’t caused some residents some heartburn, but the reality is that if we want reliable electricity, we need to get the capacity from somewhere.”

Changing landscape

The current flurry of construction began with the 2013 announcement that private investors planned to build Carroll County Energy near Carrollton in the heart of shale country; that project is under construction.

In the years before that, there had been few new plants. One exception was AEP’s gas-fired plant in Dresden in Muskingum County, which went online in 2012. The most recent coal-fired power plant to go online was the Zimmer Power Station near Cincinnati, completed in 1991.

The previous building boom was in the early 2000s, when Ohio utilities and private investors spent billions of dollars on new gas-fired plants. Some of those projects did not pan out for investors because of market factors that arose later in the decade, and some of the plants have changed hands several times in response to financial turmoil.

With that in mind, some longtime observers of the electricity business in Ohio view the current boom with skepticism, wondering whether some of the announced projects will never be completed, and whether the ones built will make money for the initial investors. Others, such as the lawyer Mason, see little downside. ”I’d rather have that plant get built in Ohio using Utica shale gas,” he said. “This is good for Ohio.”

See also: www.FrackCheckWV.net