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CPV completes Pa. gas plant ahead of schedule, possibly pressuring market prices

Commercial startup on Dec. 10 of the 1,050-MW, natural-gas fired CPV Fairview Energy Center in Pennsylvania occurred several months ahead of schedule, which could depress PJM Interconnection winter power prices.

Private developer Competitive Power Ventures Inc. and its partner Osaka Gas USA Corp., a unit of Japan-headquartered Osaka Gas Co. Ltd., developed the roughly $1 billion power plant in Cambria County, Pa., which will serve the PJM market.

The CPV Fairview plant and Tyr Energy Inc.'s 950-MW Hickory Run Energy Station were both expected to come online in the first quarter of 2020 and are currently the only combined-cycle gas turbines expected online in 2020, according to a Dec. 9 S&P Global Platts Analytics' research note.

"Our pipeline nomination data indicates that both plants have been undergoing commissioning activities," Platts Analytics said.

CPV Fairview's early startup confirms the observation.

"Thanks to the outstanding team effort with our partner Osaka Gas USA and Kiewit our construction contractor, with General Electric as major equipment supplier, the CPV Fairview Energy Center is now fully operational on budget and significantly ahead of schedule," CPV CEO Gary Lambert said in a statement. General Electric Co. affiliate GE Energy Financial Services also owns a partial interest in the plant, according to S&P Global Market Intelligence data, though is looking to sell that holding.

Market impact

When operating at full capacity, the nameplate heat rate of the CPV Fairview plant will be below 6,500 Btu/kWh, according to Platts Analytics. This heat rate will likely ensure the plant runs at a high capacity factor, offering marginal upside to gas burns in the region and the potential to lower PENELEC zone prices.

Considering the high efficiency and anticipated low gas price, Platts Analytics anticipates CPV Fairview could displace some less-efficient gas in the region, but a large portion of the coal-fired generation in the PENELEC zone runs self-scheduled at base load.

"Thus, the ability for CPV Fairview to influence West Hub price outside of the PENELEC zone will largely be contingent upon how much power can be transferred to major load centers located in Eastern PJM and displace more expensive generation in these regions," Platts Analytics said.

CPV Fairview utilizes GE's 7HA.02 gas turbines, a steam turbine, generators and additional controls equipment which are configured to allow the plant to be fueled by a mix of gas and ethane, according to the statement.

The companies said this characteristic makes CPV Fairview "singularly unique among similar power plants."

The plant was built on an 86-acre former brownfield site and is supplied by regionally sourced natural gas and ethane from the TETCO Pipeline system.

Jared Anderson is a reporter for S&P Global Platts. S&P Global Platts and S&P Global Market Intelligence are owned by S&P Global Inc.