Shale Plays Make Region Prime for Power Plants

YOUNGSTOWN, Ohio – The senior vice president of an electrical power company contemplating a $1.1 billion investment in Columbiana County says this region of Ohio is a prime market for development in the energy sector. He hints at additional opportunities.

“We look at this as a market that’s open for a few more generating facilities like this,” says Jonathan Winslow, senior vice president of development for Advanced Power Services, a Swiss-based company with U.S. offices in Boston. Advanced Power is looking to build a $1.1 billion power-generation plant near Wellsville. “And, we’ll look to other parts of the country where they’ll be a need for additional new gas-fired generation,” he says.

Three major electrical power plant projects that total more than $2.8 billion are underway in the region, all drawn here because of an abundant supply of natural gas, a skilled workforce, and the need to replace older electrical production plants as they’re decommissioned and taken off the grid.

Two of these projects – one in Carroll County, the other in Columbiana County – are owned and operated by Advanced Power. The Carroll County project is under construction, while the Wellsville site was announced last week.

A third project that should soon close and be underway is an $850 million electrical plant under development by Clean Energy Future LLC in Lordstown.

“It comes down to where the gas is available, where there’s power transmission open for new development like this, and access to water,” Winslow says. The Wellsville project, he says, has all three attributes close to the site, roughly three miles from the village.

Winslow was among several speakers at the Utica Summit III Tuesday at Stark campus of Kent State University. The Canton Regional Chamber of Commerce, The Repository and were sponsors of the event.

Advanced Power’s project in Wellsville – South Field Energy — is projected to produce 1,100 megawatts of electricity, enough to power a million homes. Both the Wellsville and Carroll County plants will use technologically advanced turbines manufactured by General Electric.

“We’re off to the races on this,” Winslow says. Air quality permit applications were recently filed with the Ohio Environmental Protection Agency and an answer is expected sometime in 2016. Winslow would like to see permits through the Ohio Power Siting Board be approved by the fourth quarter of next year and financing in place by the end of 2016.

Construction of the Wellsville plant could begin in 2017 and the plant operational by 2018, Winslow reports.

South Field Energy, he says, will be equipped with “the newest combustion turbine technology. It will be more efficient than anything else out there on the grid.”

The executive says he’s impressed by the speed with which Ohio administrators worked with the company to move these projects forward, especially the Carroll County plant.

That project, Carroll County Energy LLC, was the last project in Advanced Power’s development plan but will be the first plant the company builds in the United States. “That has everything to do with the local support we’ve had in Carroll County, from the state level to the local level and people on the street,” he says. “It takes two years to develop a project like this.”

Construction on each plant is expected to take about 30 months, Winslow noted. About 550 construction workers would be employed at each site during the building phase.

“These are wonderful projects for our building trades workers,” says David Kaminsky, vice president for public policy and energy at the Canton Chamber. “These are wonderful alternatives to coal-fired power plants, which as we know are being pushed out of the market by federal clean air regulations.”

Kaminsky says Advanced Energy’s projects in Ohio could be an example of where the country is headed as its aging power grid is fitted with efficient, environmentally compatible generation plants. “It’s certainly a model on where the country could be going,” he says.

Financing on the Carroll County project closed in April, Winslow reported, and today the site — just outside Carrollton – is buzzing with construction activity. Two other projects – one near Boston, another outside New York City – are close to getting started.

Critical to both the Wellsville and Carroll County projects is the abundance of natural gas from nearby sources – in this case, gas produced from wells drilled in the Utica and Marcellus shale plays in Ohio and Pennsylvania.

“That shale gas resulted in a significant decrease in the overall price, and changed the power generation dynamic immensely and those changes are still playing out,” he says. Thus, gas-fueled plants are today much more competitive in the market, offer less price volatility, and are logical alternatives to the older, coal-fired plants coming offline.

Initially, Advanced Power deemed Ohio a wise choice because a large number of coal-fired plants are slated for retirement, allowing room in the market. “When we looked at the gas market in 2012, we really realized we were west of the Marcellus,” he says, noting the Utica wasn’t then on the company’s radar screen.

It just so happened that the Carroll County site lies in the very heart of the play, Winslow adds. “There are a lot of things that have changed that allow these projects and other projects to be financed.” One of the most important, he emphasizes, is to show that the project has a long-term supply of natural gas to fuel its operations.

“The development of the Utica has led to huge benefits being able to be delivered to the local economies,” Winslow says. “This fuel is one that is being sourced locally.”

Pictured: Rendering of the natural gas fired electric plant Advanced Power Services plans to build near Wellsville in Columbiana County.

Copyright 2024 The Business Journal, Youngstown, Ohio.