Calpine, Bechtel to Build 2,000 MW of Gas-Fired Power
The billion-dollar Bechtel-Calpine alliance to develop three or
four new natural gas-fired merchant power plants, totaling 2,000
MW, in northern California over the next five to six years could
develop into a model for upgrading energy infrastructure in the new
competitive wholesale energy industry, according to Calpine.
The newly announced deal between the San Francisco-based,
privately held international engineering firm and San Jose,
CA-based Calpine, one of the nation's most aggressive merchant
power plant developers, marks the return of Bechtel to the U.S.
energy plant business, which it left early last year with the sale
of its half-interest in PG&E Corp.'s US Generating Co. to
PG&E. Calpine and Bechtel are applying a short-term strategy of
replacing older, fossil-powered power plants in the northern
California region which is heavily dominated by high-tech
businesses for which reliability is more important than price. The
first plant to be developed by the joint venture will be a 535 to
800 MW unit to be located at the Dow Chemical facility. It is
expected to begin operations in 2001. Over the next several months,
Calpine and Bechtel will be working with local governments,
environmental and community groups to finalize the selection of
additional sites for other new units. Longer-term, they could apply
the same strategy in nine other states in which Calpine has
operations or is developing new ones.
They are betting that they can attain a good share of the $26
billion efficiency savings that are potentially available from
changing out 90% of the nation's 750,000 MW of power by the year
2015. Currently about half of that electric generating capacity is
provided by plants that are 25 years or older, said Katherine
Potter, Calpine's corporate spokesperson.
"One of the advantages of natural gas for these new power plants
is that it is abundant, it is low cost and there is a tremendous
infrastructure of pipelines throughout North America so you can
site these new plants relatively easily," Potter said. "Whereas
with coal, you are more limited.
Calpine, Sonat Team Up
In another alliance announced last week, Calpine and Sonat will
join forces to build a 680 MW natural gas-fired peaking power plant
near Columbus, GA. The Cataula Power Plant is scheduled to begin
commercial operation in June 2000. When complete, the Cataula
facility will connect to the Georgia Integrated Transmission
System, providing direct access to Georgia Power Co., the Municipal
Electric Authority of Georgia, Oglethorpe Power Corp. and the city
of Dalton. As managing partner, Sonat Energy Services will provide
natural gas to fuel the plant in addition to being responsible for
marketing the plant's output capacity to wholesale customers.
Calpine will provide construction management and operating
Richard Nemec, Los Anegeles
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