July 18, 2018 | Kevin Adler and Barry Cassell
With two major gas-fired plants under construction, four other gas projects going through a state siting process, and at least two more in the early planning stages, natural gas power plant consumption in Florida is expected to take a big jump in the next few years. In this issue of Get the Point, we look at one of the most active states for new and upgraded natural gas power plants.
As noted by the U.S. Energy Information Administration (EIA) last year, natural gas is becoming a significant factor in Florida’s total energy mix. “Much of the additional natural gas expected to flow into Florida will be transported to its power plants,” EIA said.
“Since the beginning of 2016, when natural gas already accounted for a larger percentage of power generation in Florida than in any other state, 3.4 gigawatts (GW) of gas-fired generation has been added, EIA noted. “Another 3.9 GW of natural gas-fired capacity is planned to come online in Florida over the next six years, based on data reported to EIA by project developers.”
For many years, two pipelines, Florida Gas Transmission and Gulfstream, supplied Florida’s gas needs. In June 2017, a third major pipeline came in service, thanks to the Sabal Trail Transmission Expansion Project, which added up to 840 MMcf/d of capacity from a connection with the Williams Transco Pipeline in Tallapoosa County, Ala. Two more phases of Sabal Trail are on track for completion in 2020 and 2021, which would add another 230-240 MMcf/d of capacity.
In addition to delivering gas directly to utilities, Sabal Trail also is bringing gas to another new pipeline, the 600 MMcf/d Florida Southeast Connection Project, which also went into service last summer. This pipeline was developed by NextEra Energy, and it receives gas from Sabal Trail at the new Central Florida Hub.
(Also, it should be noted that the additional gas received by Sabal Trail on the Transco line was made possible by the completion of the Hillabee Expansion Project in Alabama, also in June 2017. To support the planned expansions of Sabal Trail, Hillabee has Phase II and Phase III targeted for in service in 2020 and 2021, respectively.)
OPIS PointLogic tracks both gas pipeline flows in Florida and power burn by the state’s gas-fired power plants (see maps). Using OPIS PointLogic data, gas pipeline flows into Florida averaged 4,703 MMcf/d in June 2018. Power burn at the roughly 80 gas-fired plants tracked by OPIS PointLogic averaged 3,665 MMcf/d in June 2018. This is an increase of more than 7.5% in burn rates when compared to last June.
Natural gas interstate pipelines in Florida
Source: Maps by Peter Staaf, OPIS PointLogic
Locations of Florida's natural gas-fired power plants
The primary customers of the Sabal Trail Pipeline are Duke Energy Florida and Florida Power & Light (FPL), and each has contracted to buy pipeline capacity for 25-year initial terms to support power projects and expand gas service.
In addition to their existing fleets of gas power plants, Duke and FLP each has one gas-fired power project in construction today:
In addition to those two plants with a combined 3,400 MW of power capacity, four combined-cycle projects, with a total of over 4,000 MW of combined capacity, are currently going through the state power Siting Board process and are expected to be operating in the next three to five years. (Note that the OPIS PointLogic figure is slightly higher than EIA’s count of 3,900 MW of new power capacity.)
Proposed, permitted and under construction gas-fired power plants
There are at least two other major gas-fired projects that are not quite as far along, but appear to likely to move forward.
Impact on gas demand
Looking at the facilities proposed, their combined impact on gas demand in Florida could be substantial, if it’s assumed that any new combined-cycle plant would run as a baseload plant, with a capacity factor in the 80%-90% range.
For example, FPL told the Florida PSC that the first-year capacity factor for the Dania Beach project is projected at around 90%, with forecast gas consumption of 6,761,741 standard cubic feet per hour (scf/hr), or about 162 MMcf/d.
In its 2015 application with the PSC for the 1,778-MW Okeechobee project, FPL projected a capacity factor of 80% and gas consumption of 9,432,429 scf/hr, or about 226 MMcf/d.
The 573-MW SHCCF project of Shady Hills Energy Center, at peak operation, including duct firing, will require about 89 MMcf/d of gas, according to filings. Shady Hills Energy and Seminole have told the PSC that they entered into a tolling agreement, which has a term of 30 years from the project’s anticipated commercial operation date in December 2021.
Seminole’s own 1,183-MW SCCF project, at peak operation, including duct firing, will require approximately 173 MMcf/d of gas.
Duke Energy Florida told the PSC that over the life of the Citrus County project, the plant is expected to operate in a capacity factor range of 50%-90%. At peak operation, Citrus County will require approximately 300 MMcf/d of gas.
Adding it up, the new projects could consume approximately an additional 1 Bcf/d of gas.
In addition, utilities and municipalities are proposing small gas projects that will add incremental demand. For example, FPL has announced plans to upgrade existing combustion turbines at various plants. And the City of Tallahassee told the Florida PSC in a Ten-Year Site Plan submitted in April that it plans to meet future energy needs with two gas-fired projects permitted last year and due for operation late this year. One project, under construction at the Tallahassee’s Substation 12, will provide 18 MW (in the form of two 9.2 MW natural gas-fueled reciprocating internal combustion engines (RICE). These units will provide back up for the critical loads served from this substation in the event of a loss of the single transmission line. The second project is being constructed at the existing Hopkins power plant to offset the planned retirement of the gas-fired Hopkins Unit 1 (76 MW). The city is installing four gas-fired, 18.5-MW RICE generators at the Hopkins plant site. Both these projects are peakers, so their capacity factors and gas usage levels will vary widely over time.
Renewables also are a significant factor in filling the state's future power needs. Increased solar capacity is in the ten-year plans filed by utilities this year with the Florida PSC, though wind is fairly insigificant because it is irregular in Florida.
It’s possible that politics will play a role in Florida, as it has done for the last 20 years. When Jeb Bush was governor in 1999-2007, he pushed a program to add new coal-fired capacity as a hedge against limited natural gas pipeline capacity that could be damaged by the state’s frequent hurricanes. But his successor, Charlie Crist (2007-2011), killed several coal projects and triggered the current wave of new gas-fired additions, by declaring that coal is a climate-change threat. Current Gov. Rick Scott is term-limited, and neither party has chosen a final nominee yet for the November 2018 election.
For more information on Florida’s current and growing gas-fired power demand, review daily tracking by OPIS PointLogic of power generation and natural gas flows.