Natural gas-fired combined-cycle units, which have emerged as perhaps the most important elements of utility and independent power generation fleets, have been costing less than was initially expected to build, and per-kW costs of less than $1,000/kW of installed capacity have become common.
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Duke Energy Progress said Tuesday that the final cost of its 625-MW Sutton combined-cycle project near Wilmington, North Carolina, was $551 million, or about $882/kW of installed capacity, about 18% less than the company's original $671 million estimate, or a per-kW cost of about $1,073.
Duke Energy spokeswoman Lisa Parrish said DEP and its sister utilities have built six gas-fired units over the last five years. "All have come in under budget," she said. "As we begin to build two new natural [gas-fired] facilities in the Carolinas, we will take advantage of efficiencies and best practices we've learned."
Parrish said the project costs include associated transmission improvements, which makes apples-to-apples cost comparisons difficult. "[N]o two natural gas plant sites are alike. One natural gas facility might require 10 miles of transmission lines while another requires 50. One plant might require a natural gas pipeline upgrade while the other only needs minor improvements," she said.
Earlier this summer, Duke Energy Carolinas started construction of a 750-MW combined-cycle unit at its Lee station in Anderson County, South Carolina, that DEC estimates will cost about $700 million, or about $933/kW.
DEP, meanwhile, in May announced plans for a 650-MW combined-cycle unit in Asheville, North Carolina. Parrish said the utility "continues to estimate the cost of building the Asheville plant as we better define the scope of the project."
In July, Florida Power & Light announced plans for a 1,622-MW combined-cycle project at a greenfield site in Okeechobee County that is expected to begin commercial operation by June 2019.
FPL, which has build five roughly 1,250-MW combined-cycle units in the past few years and is in the final stages of building a 1,277-MW unit at Port Everglades, said it expects the Okeechobee project to cost only about $670/kW, or less than $1.1 billion.
Duke Energy Florida in October 2014 secured Florida Public Service Commission approval to build 1,640 MW of combined-cycle capacity at an estimated cost of just over $1.5 billion, or about $923/kW. The new facility, to be built at a site near DEF's Crystal River station, is expected to begin commercial operations in 2018.
Duke's Parrish said the timing of a project -- and the strength of the local or regional economy -- can have a significant effect on project costs.
Much of the Sutton project was built "during a downturn in the economy," she said. "Today, the economy in the Carolinas has shifted into high gear. That's great for the health of our states, but it can make construction projects more expensive."
According to June analysis by the US Energy Information Administration, new combined-cycle units also compete well on a levelized cost basis, in part because of their low cost per kW of installed capacity. EIA said the levelized capital cost associated a combined-cycle unit entering service in 2020 would be only about $14/MWh, compared with a $60/MWh levelized capital cost for a conventional coal unit and a $41/MWh cost for a gas-fired combustion turbine.