Renewed Investment in Gas-Fired Energy Spurs Debate in Middletown

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MIDDLETOWN — A major energy company is pitching its replacement of two nearly 70-year old natural gas-fired turbines at a Middletown power plant as environmentally friendly, but local and statewide advocates for renewable energy question why new fossil fuel-fired infrastructure is being built at all.

Princeton-based NRG has proposed replacing two gas- and fuel-powered turbines, built in 1958 and 1964, with one turbine that is more efficient and faster to start. 

The 375-megawatt turbine will replace the same nameplate amount of megawatts as the two existing turbines, and generate lower emissions per hour, but the new turbine is also expected to run longer and end up generating more power and more emissions overall – though not enough to violate any air quality standards, according to the state Department of Energy and Environmental Protection.

“Repowering with new, more flexible technology, will result in significantly lower emissions while supporting increased use of renewable energy resources like wind and solar in New England,” NRG spokesman Dave Schrader said in an email.

According to Schrader, the Middletown plant is a valuable source of reliability for the regional electric grid. As renewable resources become more common in New England, he said, the fast start, gas-fired plant “will be even more critical in providing a reliable supply of power for when the sun doesn’t shine and the wind doesn’t blow.”

NRG spokeswoman Veronica Adamchik said in an email, “The new unit will be cleaner and more efficient, and as a flexible fast-starting technology it will have the ability to be turned on and off in response to system needs.

Adamchik said the company anticipated operating the new turbine “less and less in the future as more and more renewable energy is added to the system.”

Opponents reject natural gas

Brian Stewart, a Wesleyan professor and Middletown resident opposed to the new turbine, said that while in general it’s reasonable to replace old turbines, this project uses a loophole to allow NRG to increase the amount of fossil fuels burned because nitrogen oxide emissions from the plant will still be reduced.

“What happens is a small reduction of nitrogen oxide – which will have really little impact on the smog we’re experiencing – and particulares and some other emissions will go up, although not enough to trigger [the Department of Energy and Environmental Protection] putting the kibosh on the project,” Stewart said.

According to Martha Klein, communications chair for Connecticut Sierra Club, the new turbine will provide some benefit in terms of emissions, but she said regulators underestimate the amount of methane gas that leaks from natural gas pipelines, as well as the massive upstream effects of fracking to extract that gas in the first place.

“The amount of methane the power plant will be transporting will cause more methane leakage and emissions into our atmosphere,” she said.

Klein said the state puts an emphasis on transitioning from “dirtier” fossil fuels like coal to natural gas because it is supposedly cleaner – but natural gas emissions are only cleaner in the sense that they include less particulate matter than coal burning exhaust, they still include particulate matter and other pollutants.

According to Klein, fossil fuels are favored because they are “dangerously cheap” as a result of increased fracking for methane, but that ratepayers don’t see on their electric bill the costs of climate change and poor air quality from emissions.

“The cheapness is very artificial, or short-term,” she said. “The true costs are climate disruption, children who die from asthma, worsening air pollution. Those problems are urgent, and they will cost us.”

Requires market go ahead

Regulators at the Department of Energy and Environmental Protection and the state’s Siting Council will review permits for the new turbine, but there is no indication so far that the project won’t meet the regulatory standards for approval, and state regulators have already tentatively approved the permit. 

What could stop the $280 million project is a regional energy market that has long been criticized for favoring natural gas projects like NRG’s.

Richard Carella, an attorney representing NRG before the Middletown Common Council when it approved a tax stabilization agreement for the company in 2019, told the council that the project hinged on NRG successfully selling energy on the regional forward capacity market – a competitive auction where distribution companies like Eversource purchase power three years in advance.

ISO-New England runs a real-time market, where energy is bought and sold, and a forward capacity auction to ensure that enough generation capacity is brought online to meet expected demand three years in the future. Winners of the capacity auction earn a guaranteed future contract, which they can use to secure loans for investments energy infrastructure.

NRG’s project wasn’t selected in the forward capacity auction in either 2019 or 2020. NRG declined to say if they would participate in the next auction in Feb. 2021, though the tax agreement they signed with the City of Middletown indicates they will. 

“A gas plant not clearing the market, given the way the market’s designed, simply means it’s too expensive,” Acadia Center Senior Policy Advocate Deborah Donovan said.

The market design favors natural gas plants, in part because ISO-NE sets a demand curve based on the cost of bringing new gas-fired energy plant online. So a source with lower capital costs to increase generation will have a lower market price.

New renewable sources generally have higher capital costs, so the markets tend to favor the fossil fuel-based generators – particularly adding capacity to existing plants – where more of the costs come from the supply of coal or gas than from capital investment.

The forward capacity market has also been a focus of criticism from advocates for renewable energy because ISO-New England has set up barriers for new renewables to enter that market – most notably Vineyard Wind, an 800-MW wind farm being built off the coast of Cape Cod, which was denied a waiver to enter the 2019 auction at a price lower than the minimum the ISO requires of state-supported resources.

The rule that excludes sources that have received subsidies – like Vineyard Wind received from Massachusetts and Connecticut ratepayers through power purchase agreements – is based on the theory of perfect price formation, Donovan said. 

Subsidized projects could offer a price lower than the true cost, artificially lowering the clearing price of the market to the detriment of natural gas-fired plants that have not received subsidies. But that rule, and several others, make it more difficult for renewable resources to clear the capacity market. 

That doesn’t align with the goals of many New England states seeking to reduce carbon emissions by shifting away from fossil fuel-fired power plants, which is why governors of each New England state except New Hampshire have urged a redesign of the market.

“There are going to be generators that exist right now, that there will be no place for at some point in the future,” Donovan said. “Why should New England customers pay for new gas plants just because of some artifacts of market design that will just make the transition to clean energy more expensive and take longer?”

The company will ask for approval from the Siting Council if and when the project clears the capacity auction. Because the plant is already producing energy and is designated as a brownfield, the project qualifies for a petition process that is less intensive than the full certificate process, according to NRG.

Klein said the Department of Energy and Environmental Protection will definitely hold a hearing on the Middletown permit, given the number of Middletown residents who requested one in a petition. She said the hearing will ask both NRG and the department to present the project plans and the reasons the permit is being approved. The department has yet to set a date for that hearing.

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