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Natural Gas from the Marcellus and Utica Shale Region Goes West

delaware riverkeeper - Jim Willis reportsJim Willis
Editor & Publisher, Marcellus Drilling News (MDN)

 

Natural gas from the Marcellus and Utica Shale regions is now making its way west to places such as Indianapolis where it is serves to fuel new power plants.

Seems like a day doesn’t go by that we don’t notice yet another natural gas-fired electric plant project has been announced, or in this case, has come online! Here’s a project not previously on our radar. Indianapolis Power & Light (IPL) built and recently brought online a 671-megawatt combined-cycle natural gas-fired electric plant about 30 miles southwest of downtown Indianapolis. The new plant can power up to 370,000 homes. Gas-fired plants are a huge market for Marcellus and Utica Shale gas.

Marcellus and Utica Shale“But Jim,” you say. “This plant is in Indiana! There’s no Marcellus/Utica gas in Indiana. In fact, Rover, NEXUS and other pipelines don’t go through Indiana, so why are you excited about this plant?” Good question.

We’re excited because there are pipelines in the vicinity that flow our gas–including the mighty Rockies Express (REX), which was reversed in June 2014 and now flows our gas all the way to points in Missouri. According to a statement issued by IPL, the new Eagle Valley gas-fired plant can access “low-cost fuel” from the Rockies Express Pipeline and Texas Gas interstate pipelines. That is, our Marcellus and Utica Shale gas.

The startup of Indianapolis Power & Light Company’s Eagle Valley combined-cycle natural gas plant marks a shift toward gas as the utility’s largest power generation source, replacing coal, the company said Monday.

“Our future is focused on accelerating cleaner, smarter and affordable options for our customers and we are proud of the efforts we’ve made over the last few years to significantly reduce our dependence on coal and focus toward a more balanced energy mix,” Craig Jackson, IPL president and CEO, said in a statement. IPL is a subsidiary of Arlington, Virginia-based AES.

Marcellus and Utica Shale

The 671 MW CCGT gas plant, about 30 miles southwest of downtown Indianapolis, began commercial operation April 28, IPL said. The new power station reduces the rate of “most emissions” by 98% compared to the six coal- and oil-fired units it replaced at the site. The old generating equipment and water intake structures were “rendered inoperable” for safety reasons, Claire Dalton, IPL spokeswoman, said in an email Monday.

Eagle Valley will sell power into the Midcontinent Independent System Operator’s wholesale energy and capacity markets. IPL’s request to invest more than $600 million in the plant was approved by the Indiana Utility Regulatory Commission in 2014, and the company has a pending regulatory rate review at the IURC to place the Eagle Valley plant into the rate base, Dalton said. The gas plant can access “low-cost fuel” from the Rockies Express Pipeline and Texas Gas interstate pipelines, the statement said.

An ongoing shift away from coal toward gas and renewable energy sources is taking place at the corporate and state level. IPL’s power generation mix, which in 2007 consisted of 79% coal, 14% gas and 7% oil, is projected in 2018 to reach 45% gas, 44% coal, 8% wind, 2% solar and only 1% oil, according to the company’s website.

IPL issued this press release on Monday:

Indianapolis Power & Light Company (IPL), a subsidiary of The AES Corporation (NYSE: AES), announces a historic milestone has been met as the 671 megawatt Combined-Cycle Gas Turbine (CCGT) natural gas plant reached substantial completion and began commercial operations on Saturday, April 28, 2018. The completion of IPL’s Eagle Valley Generating Station, located in Martinsville, Indiana, ensures a more diverse, reliable and cleaner portfolio of generation for customers.

“This is an important investment for our customers and community as the plant will have a lower rate of emissions than the coal units it replaces, and is the most reasonable cost option for our customers,” said Craig Jackson, IPL President and CEO. “Our future is focused on accelerating cleaner, smarter and affordable options for our customers and we are proud of the efforts we’ve made over the last few years to significantly reduce our dependence on coal and focus toward a more balanced energy mix.”

The new natural gas plant is one of the cleanest, most efficient thermal power plants to be built in Indiana. Additionally, it reduces the rate of key emissions by 98 percent compared to the six coal- and oil-fired units it replaced. Connected to two interstate natural gas pipelines, IPL’s natural gas plant can access low-cost fuel from most of the major natural-gas producing basins in the United States.

IPL received approval in 2014 from the Indiana Utility Regulatory Commission (IURC) to invest approximately $600 million to build the natural gas plant. This project, along with the conversion of coal-fired units to natural gas at IPL’s Harding Street Station in 2016, makes natural gas IPL’s largest source of generating capacity. IPL also added advanced battery-based storage to its fleet, which enables more efficient operations and supports the ongoing integration of renewable generation resources.

IPL will host a ribbon cutting ceremony in the coming months to celebrate the commissioning. For more information about the benefits of IPL’s new natural gas plant, visit IPLpower.com/CCGT.

 

And, here’s a nice video on the project:

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One thought on “Natural Gas from the Marcellus and Utica Shale Region Goes West

  1. Low cost Shale Gas drives growth ov Natural Gas-Fired Power Plans e.g. CCGT. Shale gas, derived from hydraulic racturing and horizontal drilling, has yielded a market price of under $3/MMBTU for the past few years – from $12/MMBTU in 2008 – a 75% reduction resulting in 40% cut of CCGT operating costs.

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