Home This Week Special Column EcoEléctrica officials say facility is model for future power generation
Issued : Wednesday, August 8, 2012 12:00 AM
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EcoEléctrica officials say facility is model for future power generation

By : JOHN MARINO
Edition: August 9, 2012 | Volume: 40 | No: 31

Natural gas, private management keep power costs down, compliance high

PEÑUELAS, Puerto Rico—The island's first private powerplant continues to be its cleanest and most efficient, and after a dozen years in service remains a model for the island's future power generation, EcoEléctrica officials say.

The natural gas plant produces 16% of all power generated on the island, most of it at a cost of 5¢ per kilowatt hour, about one-fourth what it costs the Puerto Rico Electric Power Authority (Prepa) to produce power at its plants running on bunker 6 fuel. Yet it is the cleanliness of the plant, which emits 30% less pollution than Prepa's oil-fired plants, that is perhaps most striking to first-time visitors.

"We are the environmentally cleanest powerplant and have the best heat rate of any facility on the island," said Carlos Reyes, EcoEléctrica general manager of operations.

"The reliability of this powerplant is well above the island average and is one of the best in the industry," he added.

The plant began operations in March 2000 and has a 22-year contract to deliver energy to its sole customer, Prepa. EcoEléctrica is a stand-alone company owned by Gas Natural Fenosa of Spain, with a nearly 50% stake; International Power (GDF Suez Group) of Belgium, a 35% stake; and Japan's Mitusi, a 15% stake.

Its main line of business is the energy produced for Prepa through its 540-megawatt combined-cycle powerplant, but it also operates a liquefied natural gas (LNG) import facility, one of only 10 operating in the U.S., as well as a desalination plant producing two million gallons daily of potable water from the ocean.

There is still a dozen years left on its Prepa contract, which covers its entire power-generation capacity, but officials say the company will likely look to extend it and pursue other power-generation opportunities that arise.

"We are confident that if the right business opportunity surfaces, our partners will go after it," said Jaime Sanabria, EcoEléctrica general manager of finance & administration.

"EcoEléctrica, during its 12 years of operation, has been very reliable and very consistent, not only for the Prepa part of the equation but for the investors and the lenders, and that credibility we built up is important. So if EcoEléctrica decides to build another facility, it will be an attractive project because of the demonstrated performance of our operation and delivery," he added.

EFFICIENCY BEYOND NATURAL GAS

Much of EcoEléctrica's success stems from its use of natural gas for power generation, which has always been cheaper and cleaner than oil, but has become even more attractive since the plant commenced operations in 2000. A rise in new drilling techniques has helped untap enormous new natural gas reserves in the U.S., driving down and stabilizing prices even further.

Beyond natural gas, however, EcoEléctrica can serve as a model for future powerplants in numerous other ways.







In its contract with Prepa, EcoEléctrica has pledged to be reliable and efficient, guaranteeing 93% availability and a 45% thermal-efficiency rating. The plant is connected to Prepa more than 90% of the time, and it produces power at an average 80% of its capacity.

Prepa basically orders the amount of power it needs from the plant on a daily basis, and it is automatically produced without the need for operator intervention, according to Sanabria.

"We have to maintain really good standards on operations and maintenance through our contract. We have to be reliable and efficient, and if we don't comply, we are penalized through our payments," Reyes said.

The plant's combined-cycle technology also adds to its cost and environmental efficiency as it allows it to use one-third less fuel to produce power, which also works to hold down costs and emissions. The plant also provides additional antipollution controls and processes that further decrease emissions.

The plant's workforce totals 78, with 70 employees in operations and maintenance and 36 technicians who are members of the United Steelworkers union.

This is another key performance indicator for a powerplant, in which EcoEléctrica shines; a Prepa powerplant of similar size would have more than 200 employees, more than double what it takes the private plant to run.

The heavily regulated facility, which is overseen by nearly a dozen federal and local agencies, has also built up a sound safety record during its 12 years in service, with the LNG terminal having a perfect safety record and the powerplant without lost-time accidents over the past eight years.

The facility has an emergency response memorandum of understanding with local agencies, including the Fire and Police departments and other first responders.

The plant can burn natural gas, propane or diesel without affecting service to Prepa, but this additional capability is really for use in emergencies. Since commercial operations began, the plant has used natural gas 99% of the time, largely switching to alternate fuels only for annual tests.

ENVIRONMENTAL COMMITMENT

EcoEléctrica doesn't just pollute less than Prepa powerplants, its environmental commitment also embraces protection of endangered species and fragile marine habitat as well as the south-coast's precious water resources.

The seawater desalination facility was part of the original design so the plant wouldn't deplete the fresh drinking water from the south-coast aquifer. Half the water it produces is used for internal consumption, and the other half is sent to the Costa Sur plant and neighboring communities for their use.

"Water is scarce in the south, so we had that in our original design so we don't impact the environment. The steam to evaporate the water is the costly part of the desalination process, but we have the steam for free from the exhaust of the gas turbines," Reyes explained.

EcoEléctrica also operates under a no-discharge permit, meaning it can't release any water from its facilities, and a retaining pond was constructed to capture storm-water runoff so it doesn't drain into the ocean, affecting coral and other marine habitat.

The LNG terminal's design, which extends from the coast along a narrow bridge, is also aimed at reducing the impact on coral reef and sea grass near the coast.

"From the onset of EcoEléctrica, we have worked very hard to assure the environment is not impacted in a negative way," Sanabria said.

The manatee, which lives off the coast where the plant is located, has been adopted by the plant as its symbol, but there are also sea turtles and other marine life that the plant has been careful about disturbing.

While permitting required five years of marine life studies, EcoEléctrica has continued funding them and providing "valuable information on coral and marine life" to the Environmental Protection Agency (EPA). Students from the University of Puerto Rico's Mayagüez campus participate in the studies, which are overseen by EcoEléctrica Environmental Compliance Officer Damaris Negrón.

Many of these studies chart the return of marine life to the facilities and surrounding waters since the commencement of operations, and when LNG deliveries are made, harbor pilots monitor for manatees and other endangered species.

The company also funded a U.S. Geological Service study tracking the migration of manatees, as well as the largest pool at the Manatee Hospital & Research Center in Bayamón, developed by Prof. Antonio Mignucci of the Caribbean Stranding Network.

A BOON TO THE COMMUNITY

Sanabria said EcoEléctrica's commitment to the communities of Peñuelas and Guayanilla, where it is located, is also strong. Ninety percent of its workforce hails from the southwest region, officials say.

While the company could have sought an exemption from the municipal tax, it decided to pay the tax for the good of the communities and entered a deal with Peñuelas Mayor Walter Torres, of the Popular Democratic Party, to share the revenue with neighboring Guayanilla.

"Just in taxes, we pay around $4 million, about 33% of their annual budget, to Peñuelas and a couple hundred thousand to Guayanilla. That is not counting the other support or job creation," Sanabria said.

EcoEléctrica also runs a scholarship program, granting $1,000 scholarships for the top-20 high-school graduates in each town to cover costs related to their first year of university studies, and also adopted an elementary school in the mountains of Peñuelas, paying for uniforms, books and other necessities each year.

The company also donated $80,000 to the Puerto Rico Conservation Trust to buy private land where an extensive cave system is located, with a long-range plan to develop the natural asset into a tourism attraction.

EcoEléctrica's community-outreach and environmental-stewardship programs haven't gone unnoticed. It has won awards from the EPA and the Puerto Rico Manufacturers Association and, in 2006, the prestigious energy publication Platts honored it with its community program of the year honor.

A BUSINESS OPPORTUNITY FOR PUERTO RICO

When the plant was first built, workers built a natural gas pipeline to the edge of the property to facilitate the use of natural gas in Prepa's neighboring Costa Sur plant.

"It was a business opportunity for Prepa," Sanabria said.

It's an opportunity Prepa has finally taken after a dozen-year wait. Until this spring, the LNG terminal was only used to supply EcoEléctrica's needs, but with the conversion of Costa Sur to natural gas, it will now supply Prepa as well.

That means annual shipments of LNG are doubling to 24 from 12, and natural gas-power generation is also doubling to 30% of total energy production from 15%.

Right now, the EcoEléctrica facility has the capacity to feed both powerplants, and enough spare natural gas to supply perhaps one more, but the plant was originally designed to have two huge natural gas-storage tanks, but only one has been built. Constructing the second tank would double its capacity.

Even though the Puerto Rico government has scuttled plans to pipe natural gas from the facility to north-coast powerplants through the Vía Verde project, a second tank could still be built and used for other purposes, company officials say.

Sanabria and Reyes said it would be a smart move for Puerto Rico to maximize the use of the LNG terminal, given the high cost of energy here and the promise U.S. natural gas holds for the island.

While natural gas could be barged out of the facility to Prepa, natural gas could also be used on the island for other purposes, such as transportation or to provide cheap, clean energy to industry.

"The use of the LNG terminal could be maximized for the benefit of Puerto Rico. You have the storage facility, the capacity to supply powerplants and many downstream businesses, and you have a proven workforce with more than 12 years' experience," Sanabria said. "With power costs escalating, it is an element that should be maximized."

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