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New Florida Power Projects Will Generate Additional Gas Demand

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

 

Growth

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:

  • FPL is building the 1,778 MW Okeechobee Clean Energy Center in Okeechobee County, targeted for operation beginning in June 2019. FPL has contracted for 400,000 Dth/d of firm gas transportation for the facility from an affiliated company, NexEra Energy’s Florida Southeast Connection. The Okeechobee Lateral Project was certified by FERC on June 7, 2018, and it will be a 5.2-mile, 20-inch-diameter pipe.
  • Duke Energy Florida is building the 1,640-MW Citrus County Combined Cycle Facility, expected to be commercially available by the end of 2018. The plant will receive natural gas from the Sabal Trail Pipeline. At the point when this plant becomes operational, the coal-fired Units 1 and 2 at the adjacent Crystal River Power Plant will be retired. The coal-fired Crystal River Units 4 and 5 will remain in operation. Unit 3 was a nuclear facility that was retired earlier this decade.

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.)

  • Tampa Electric Big Bend Power Station (Hillsborough County). In this project, a unit at the Big Bend coal plant will be repowered by natural gas, which will be provided through a new interconnect with an existing People’s Gas lateral. Tampa Electric on April 18 filed for approval of the pipeline. The BB 1 Modernization Project will replace some of the facility’s coal power with 1,090 MW of gas-fired power. Tampa Electric intends to retire the parts of existing BB Unit 2 prior to operation of the modernized combined-cycle unit. BB Units 1 and 2 are 1970s-era steam units with nominal capacity of about 445 MW each. Units 3-4 would continue to operate into the future, at least in part on coal.
  • FLP Dania Beach Energy Center (Broward County). In July 2017, FLP applied to build a 1,200-MW, combined-cycle unit located on the existing Lauderdale Plant site to replace the gas-fired Units 4 and 5. The project would use existing natural gas supply infrastructure at the site.
  • Seminole Electric Cooperative’s Seminole Combined Cycle Facility (Putnam County). A December 2017 application proposes construction of a 1,183-MW combined-cycle unit at the existing Seminole Generating Station in Putnam County. One of the two coal units at the site will be retired in conjunction with this project. Gas will be supplied by the Florida Gas Transmission (FGT) system via a new 21-mile pipeline lateral, originating from the FGT pipeline in western Putnam County and running east to the existing SGS site.
  • Shady Hills Energy Center LLC’s Shady Hills Combined Cycle Facility (Pasco County). In February, Shady Hills, a unit of General Electric, applied to build a 573-MW gas unit at the existing, gas-fired Shady Hills site. This new project will supply power under a tolling agreement to Seminole Electric Cooperative. Shady Hills Generating Station currently has three dual-fuel 170-MW gas combustion turbines operating in simple-cycle peaking and intermittent-duty mode, and an FGT lateral provides natural gas to the plant.

 

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.

  • In October 2016, FPL applied at the Florida Public Service Commission (PSC) for approval of its revised standard offer contract, in the process adding a new benchmark project by which to measure outside projects it is offered. The Florida PSC on Feb. 19, 2018 approved that standard offer contract change, writing, “FPL has identified its next avoidable unit which is a 1,752-MW natural gas-fired combined cycle (CC) unit at a greenfield site with an expected in-service date of June 1, 2028.” No further information about site and gas supply is available at this time.
  • On April 2, 2018, the Gulf Power unit of Southern Co. told the Florida PSC in its annual Ten-Year Site Plan that it is looking at a combined-cycle gas project for its greenfield North Escambia site. According to the filing, this addition would be a dual-fuel (gas as the primary fuel with distillate fuel oil backup) 1x1 CC unit with a summer rating of 595 MW, with an in-service date in June 2024. More recently, NextEra Energy announced plans to buy Gulf Power, which adds uncertainty about the project.

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.