MIDDLETOWN — NRG Energy, a New Jersey-based energy company, announced on Monday that it was selling 4.8 gigawatts worth of “non-core fossil assets” to a subsidiary of Boston-based ArcLight Capital Partners for $760 million.
An NRG spokesman confirmed Tuesday that the sale includes all four of the company’s power plants in Connecticut: 1,548 megawatts worth of natural gas, oil and jet fuel-fired plants in Middletown, Montville, Hartford and Devon.
NRG Spokesman Dave Schrader said the company is constantly reviewing the makeup of its portfolio, assessing the location, type and mix of assets to ensure they are suited to its customers’ needs.
Representatives for ArcLight did not respond to a voicemail or emailed requests seeking comment on Tuesday.
“We look forward to working with ArcLight and the required regulatory agencies towards the successful close of this transaction,” Schrader said.
Schrader said NRG needs to have more discussions with ArcLight about their plans for the Middletown plant, where NRG has been working to gain regulatory approval and funding to replace two half-century-old turbines with one new turbine.
“In the interim we intend to continue proceeding with the permitting process,” Schrader said.
The state’s Department of Energy and Environmental Protection will hold an informational hearing over Zoom at 3 p.m. Wednesday on NRG’s applications for permits to operate the proposed new turbine.
The announcement came three weeks after the company again failed to secure funding for its new turbine in a regional auction, meaning its project came with a higher price tag than the clearing price of the auction, which has been trending down in recent years.
NRG has also failed to secure funding for plans to convert the Montville station, already converted once from a coal-fired plant, into a 50 MW renewable energy park mainly powered by a wood or biomass-fired turbine, a plan that also included solar and fuel cells. NRG’s most public push for that project came between 2010 and 2013.
Public pressure for battery storage
NRG met with the Middletown Common Council and residents opposed to the new turbine shortly after the last failed auction. They pushed the company to develop a battery storage project at the site.
The planned turbine was not meant to run all year, but to fire up quickly in order to meet peak energy demands in the winter and summer, NRG has said. Battery storage would serve the same need without burning natural gas or other fossil fuels, opponents of the new turbine reasoned.
About 630 MW worth of battery storage projects cleared the capacity market this year. That’s less than 2 percent of the total capacity that was selected through the auction, but it’s the first time a significant amount of storage has cleared.
NRG Senior Director Brian McCabe told the council and residents that the company was considering opportunities for battery storage at several facilities across the country, including a project in Queens where NRG charges energy storage trucks that can be moved around New York City.
McCabe said New England needs generators like the new gas-fired turbine NRG is proposing, and there is “great benefit” to replacing the two 60-year-old existing turbines with a new, cleaner burning turbine. But McCabe told the council and residents that NRG would “look into energy storage” in addition to building the new turbine.
“I would like to look at storage at the facility, so we will do that,” McCabe said. “We have 62 acres at that site, so we know we have sufficient space, not only to do the repowering project, but also to do something else like storage.”
Tom Atkins, NRG vice president of business development, told the council that NRG was developing the repowering project for a time when the value it will provide is recognized. He mentioned that there are initiatives to change how that forward capacity market works, but in the future there may be other incentives for quick-start generators, so its funding may not be tied to that auction.
“We’re right now preparing this project because we believe it’s needed – we believe energy storage is needed too, by the way, so we don’t think it’s either-or, but we’re preparing this project for the time when the value it would provide is recognized, and it can move forward,” Atkins said.
Now that NRG has agreed to sell the plant, whether to move forward with the repowering project or the battery storage idea is a decision ArcLight will have to make. Still, NRG will begin to look at the feasibility of developing battery storage at the site, Schrader said.