City hopes power equals profit
North-end power plant opens, adding 43MW of capacity to city’s electrical grid
The city’s new north-end power plant is up and running, and, according to Mayor Ted Clugston, could help return black ink to the division’s financial outlook and draw new industry.
At Wednesday’s grand opening ceremony for the station, known as Unit 16, Clugston also told a crowd of city officials, contractors and industrial customers, that the city should be planning for another expansion now.
“It secures the supply of energy for our residents,” said Clugston, citing a four-year gap between approving the plant and this week’s grand opening. “Businesses will come here because we have this supply. We are truly building on our strengths, and I truly believe that (the power plant) will return to profitability this year, and this will be a part of that.”
The generator is a single-cycle gas-fired turbine that can produce 43 megawatts of electricity — increasing the city’s capacity by about 20 per cent from the stand-alone facility.
The total cost of the plant is $55.7 million.
That’s about $10 million less than first thought due to a favourable exchange rate on the main component, an LM 6000 gas turbine generator bought from General Electric.
The remainder of the savings come from “sound project management,” according to utility commissioner Cal Lenz.
“There were no major surprises and honestly, I don’t think there were any surprises.”
The city’s power generating business, known as GENCO, posted a $3.5-million loss in 2016 due to low prices and lower demand caused by the province-wide economic slowdown. At its height of profitability, the division recorded a $40-million profit in 2011 as export profits soared.
Unit 16 was originally discussed in about 2012 when it was proposed to be a peaking station, basically operated to export power during price spikes.
It was approved by the Alberta Utilities Commission two years ago as a backstop measure to maintain city supply of power if the largest unit at the main power plant was off line.
The highest demand recorded in the city is about 170MW.
The city’s maximum production capacity, including 43 megawatts from Unit 16, is now 246MW.
“(Unit 16) is installed to meet peak demand for the city,” said Lenz. “It’s optimizes our output ... (but also) we’re looking at how we market energy exports from the city when there is extra power.”
The location, on city-owned land on Box Springs Road, was chosen partly because it was apart from the main power plant, which was threatened during 2013 floods. It also presents an easy tie-in point to new northside connection to the provincial power gird and new natural gas pipelines into the city. (The lines to the main plant are at maximum capacity.) Lenz also said the site provides enough room for future expansion. Unit 17 would be twinned with the new facility, then both would be enclosed so a heat-recovery system could boost efficiency.
Also attending the tour was Coun. Phil Turnbull, elected last month and set to become the chair of the energy and utility committee.
He said Wednesday that while he was still meeting with power administrators, the plant is impressive and could be profitable.
“It is a big investment but if we get the kind of return that we’re expecting, then it will be one of the best investments we’ve made,” he said. “We’ve got the business case for this.” Power plant manager Brian Strandlund took the opportunity to thank department officials and workers for their work since the June 2016 ground-breaking.
They include General Electric, Dynamic Industrial Solutions,, GVN Structures and Pronghorn Controls.
Clint Sims of project manager Aval Engineering said the project was well planned and well staged.
“We were lucky to have a good group of key local contractors,” said Sims. “This kept a lot of guys working this year.”
The project involved more than 100,000 hours of work and resulted in no loss-time accidents or injuries.