Dive Brief:
- Calpine Corporation will pay $530 million in cash for Exelon Corporation’s 809 megawatt combined cycle natural gas- or fuel oil-burning Fore River Generating Station in Massachusetts.
- The hybrid facility is likely to be valuable in New England's wholesale power market if shortage-driven demand and spiking prices for natural gas-generated electricity and supplemental fuel oil-generated electricity during the coming winter follow this past winter's pattern.
- Fore River is “an excellent fit” with Calpine’s East Region fleet, according to Calpine President and CEO Thad Hill, and will join its 87 plants and 26,000 megawatts of natural gas and geothermal capacity in 17 states and Canada.
Dive Insight:
The Fore River plant, built in 2003, has two Mitsubishi combustion turbines, two heat recovery steam generators and one Mitsubishi steam turbine.
The price tag could turn out to be a bargain if another short term natural gas shortage limits it to only 24% of the region's electricity and oil plants are called on for a few days to supply another quarter of the power. The purchase price for the plant works out to $655 per kilowatt.
NextEra announced last week it would not sell the 57-year-old, 822 megawatt, oil-burning Wyman Station because it proved invaluable last winter when New England’s natural gas pipeline system couldn’t meet demand. With the Vermont Yankee nuclear plant and two Massachusetts coal and oil plants going offline, NextEra said it expected Wyman’s electricity to be vital in the coming winter and until gas pipeline capacity can be expanded.
Massachusetts Municipal Wholesale Electric Co. said gas pipeline constraints are forcing New England to rely more on oil units like Wyman and Fore River because new pipeline projects are being blocked by environmental groups advocating for wind and other renewables and opposing new pipeline infrastructure.
