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Bechtel to build 1,182-MW Ohio gas plant as fuel mix shifts away from coal

Highlights

Bechtel awarded EPC contract for South Field Energy plant

Over 4 GW of regional coal capacity to retire by 2022

New York — South Field Energy has selected engineering firm Bechtel to design and build its $1.3 billion, 1,182-MW South Field Energy combined-cycle natural gas plant located in the heart of Ohio's shale patch amid a regional shift in the power generation mix away from coal, Bechtel said Monday.

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South Field Energy is an affiliate of Switzerland-based, privately owned Advanced Power, which has offices in Boston. Bechtel will be responsible for the engineering, procurement and construction of the power plant, which will use General Electric power generation equipment including two natural gas turbines. The plant will be a dual-fuel facility with ultra low sulfur diesel used as back-up.

A two-mile, 20-inch-diameter gas pipeline also will be built to link the plant with an existing Dominion pipeline about two miles west of the 86.5-acre plant site located in the Village of Wellsville. The plant will be owned by an investor group comprising Advanced Power, Kyushu Electric Power, NH-Amundi Asset Management and PIA Investment Management, RS Global Capital Investment (a joint venture between Development Bank of Japan and Showa Shell Sekiyu), Shikoku Electric Power Co., and an affiliate of Bechtel Development.

Upon completion in the second quarter of 2021, Advanced Power will manage the gas-fired plant and its energy, capacity and ancillary services will be sold into PJM Interconnection markets.

SHIFTING GENERATION MIX

In 2017, coal fueled 58% of Ohio's net electricity generation, natural gas fueled 24% and nuclear energy accounted for another 15%, according to the US Energy Information Administration. In May, coal supplied 44% of Ohio's net power generation, gas supplied 34%, nuclear power contributed 18%, non-hydro renewables accounted for 2% and hydro power contributed 1%, according to EIA.

Power generation retirements across PJM have totaled 4,280 MW so far this year, more than twice as much as all of 2017, with an additional 1,500 MW of generation planned to close by the end of 2018, according to PJM data.

Of the 1,563 MW scheduled to be retired through the end of the year, 637 MW is coal-fired generation, 69% less a year ago, while 608 MW is nuclear and 318 MW is gas-fired generation, according to the grid operator.

FirstEnergy Solutions, a merchant generator that is in bankruptcy, notified PJM August 29 that it plans to deactivate three coal-fired power plants in Ohio and Pennsylvania with combined capacity of 4,004 MW by June 2021 and June 2022.

Leading its list of recently announced coal deactivations was its largest coal-fired facility, Bruce Mansfield units 1-3, with combined capacity of 2,490 MW. The facility is based in Shippingport, Pennsylvania, near the Ohio border. The largest coal-fired plant in Pennsylvania will be deactivated June 1, 2021, FES said.

Twenty-five miles southwest in Stratton, Ohio, on the Ohio River is the 2,233 MW W.H. Sammis facility, which has seven coal-fired units and five oil-fired peaking units. It is FES' largest coal-fired facility in Ohio.

FES said it will be deactivating Units 5-7, with combined coal-fired capacity of 1,490 MW, June 1, 2022, and one 13-MW diesel oil unit June 1, 2021.

In northern Ohio, near Cleveland, is Eastlake 6, a 24-MW coal-fired unit that FES said it will deactivate June 1, 2021.

The closures of the Ohio and Pennsylvania facilities are subject to PJM review to ensure the retirements would not negatively affect reliability.

So far this year, there have been 7,168 MW added across the PJM footprint, including 7,050 MW of gas-fired generation and 100 MW of solar.

Through the end of the year, there are 13,337 MW of generation listed in the PJM Interconnection queue. Of active projects, 4,315 MW will come from solar generation, 3,125 MW from natural gas and 1,732 MW from wind. There is also 504 MW of hydro and 146 MW of storage in the queue.

Bechtel did not return a request for comment.

-- Jared Anderson, newsdesk@spglobal.com

-- Additional reporting by Kassia Micek and Jeffrey Ryser, newsdesk@spglobal.com

-- Edited by Jeffrey Ryser, newsdesk@spglobal.com