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IMPRACTICAL POWER PLANTS COULD BENEFIT FROM RELOCATION. BUT RISKS AND
REWARDS MUST BE CAREFULLY EVALUATED
Figure: Aging plants in some locations can make an economic case for relocation. By moving elsewhere, the economic picture can change dramatically.
BY JOHN CLIFFORD
A typical life cycle of a gas turbine (GT) power plant is 20 to 30 years, depending upon the application duty, power purchase agreements (PPAs), host requirements, and electricity demand. After 20 years, the turbine has probably undergone a few major overhauls and in need of upgrades to improve output and efficiency. In short, the owner will need to make significant investments to keep the plant competitive and economically viable.
In certain cases, it may make sense to relocate the power plant. An Independent Power Producer (IPP) based in Houston, Texas opted to relocate a GT plant in Florida. Originally built a couple of decades ago, the plant had been shut down due to the presence of more competitive capacity additions in the local market. The IPP needed to make a decision: Upgrade the plant; decommission and scrap it; sell it to new owners, or relocate to a better market.
Replacement would be costly, and even then, the capacity from a new facility may not be required in the market. Upgrading the GT with new technology would mean the plant could take advantage of existing permits and infrastructure. Facility relocation would make it more competitive, but would incur removal, refurbishment and associated EPC costs. All options were evaluated against a study of market opportunity at the current and a possible new location.
The installed cost of new construction ran into a return on investment (ROI) hurdle that was too high. By relocating the current facility to a new site with more market potential, however, the owner could gain another twenty of more years of productive life with a more rapid ROI and lower capital costs. In addition, high summer peak prices made Texas a prime relocation candidate.
The IPP chose a site in Houston where high load concentrations, growing demand and spot peaking prices were sufficient to meet the IPPs targeted investment returns. Relocation challenges On the downside, environmental regulations at the new site required NOx emissions of no more than 9 ppm.
The IPP reviewed a variety of upgrade possibilities. For example, the GT required a major rotor overhaul. The generator required rewinding and the control system needed upgrading. Additionally, financing requirements drove the need for single-point warranties and guarantees. The owner located a turnkey EPC contractor who could provide this specific scope of services.
The IPP chose to work with EthosEnergy, a global independent service provider with a large presence in the Houston area. EthosEnergy has performed more than 25 gas turbine relocations, and, as part of its full life cycle offerings, could provide the IPP with a turnkey EPC relocation wrap that included gas turbine overhaul and upgrade.
Relocation involved an inventory of existing equipment, with clear definition of the scope of supply to be relocated. This included a survey of the condition of the equipment and a disposition recommendation for repair or replacement. All parts, major components and transferrable items were catalogued with a barcoding device during disassembly. All high-speed rotating equipment, bearings, inlets, outlets, pipes, pumps, ducts and wiring had to be sealed, bundled, wrapped and protected and ready for shipping. Road permits were required for a journey through five states. Site preplanning had to consider load-bearing soil laydown areas, cribbing and weather protection for all the equipment as it arrived. From there, EPC work followed a similar path as the construction of a new plant.
Relocation of GTs and entire power plants involves a thorough evaluation of risk and reward. In some cases, it can be an economical and fast-track way to gain value from stranded assets.
Author: John Clifford is Vice President of Equipment Solutions at EthosEnergy, an independent service provider of rotating equipment services and solutions to the power, oil & gas, and industrial markets. EthosEnergy has performed more than 25 gas turbine relocations, and can provide turnkey EPC plant relocation that includes gas turbine overhaul and upgrade.