Victorville Enters Into Contract With General Electric for Power Plant Equipment
California Energy Commission Issues Key Milestone in
Permit Approval Process for Innovative Hybrid Power Plant
The Victorville City Council took action to ensure the mid-2010 scheduled opening of the 570 Megawatt Victorville 2 Hybrid Power Plant (VV2) in Victorville. Victorville Council members and officials from General Electric held a press conference and contract ceremony today entering into contract that will provide the major equipment needed to run the nation's first hybrid power plant.
“This project is going to change Southern California's energy supply picture and place Victorville on the global energy map.”
Mayor of Victorville
The equipment comprises what is called “the power island” and includes two 7FA natural gas fired turbines, two heat recovery steam generators (HRSGs) and a steam turbine along with the requisite computer based control system and technical support.
During the event, Mayor Caldwell and Edward English, GE's Western Regional Account Manager and Robert French, General Manager, Western Region, GE Energy Services discussed the new partnership.
“GE is delighted to have been selected by the City for this important project; as world leaders in gas combined cycle technology, we are committed to the timely delivery of our latest state-of-the-art equipment to the VV2 Hybrid Project,” said French.
Due to unprecedented worldwide demand for power generating equipment, the City's ability to secure this equipment for its Hybrid Plant is a major step forward for the VV2 Project.
”The fact that our project has procured all of the major equipment means that we can maintain our position out in front of other new power plant projects in the state”, said Mayor Terry Caldwell. “If we delayed entering into this contract, it would have cost the Project up to two years”.
The contract is the culmination of more than 15 months of negotiations between Victorville and GE with the City's consultant Inland Energy, and a team of experts playing a major advisory role. The contract's terms include a graduated payment schedule that will allow the majority of the purchase price to be paid after the principal financing for the Power Plant has been put in place, currently scheduled for the summer of 2008. The major equipment will begin shipping in early 2009. This will enable VV2 to come on line in mid-2010, as planned.
The partnership with GE comes on the heels of the release of the California Energy Commission's issuance of its Preliminary Staff Assessment (PSA). Obtaining the California Energy Commission (CEC) permit is a key step in maintaining this schedule.
Released November 21st, the PSA will allow the City of Victorville to move forward with plans to build the nation's first hybrid power plant in the High Desert and meet the electricity needs of about 500,000 people – helping to avert future energy crises and stabilizing power bills throughout the region. The PSA, which encompasses a comprehensive review of all of the Project's impacts, concludes that there will be “no unmitigatable impacts” resulting from the Project, although several areas are identified as requiring additional information.
VV2 combines the ultra high efficiency of the modern natural gas combined cycle technology with the proven renewable design of a solar thermal system.
“This project is going to change Southern California's energy supply picture and place Victorville on the global energy map,” said Victorville Mayor Terry Caldwell, whose city is fast becoming the energy center for Southern California. “The availability of energy will allow Southern California businesses to expand. This project is good for the environment and good for job creation.” The project's development is being managed by Newport Beach-based Inland Energy, which is under contract to the City of Victorville.
The PSA's conclusions give a green light to continuing the development of the 570-megawatt hybrid plant, which will be built at Southern California Logistics Airport. This is a major milestone in the complex and comprehensive permitting process the City of Victorville and Inland Energy have had to undergo to build what is called the “Victorville 2 Hybrid Power Plant” (VV2). According to City Councilmember Bob Hunter “The CEC's issuance of the PSA today is a strong indication that the project's permitting schedule is on track”.
The city-owned, $700 million project on 300 acres will include a 250-acre solar field of parabolic trough mirrors to capture the sun's energy and turn it into electricity. VV2 combines the ultra high efficiency of the modern natural gas combined cycle technology with the proven renewable design of a solar thermal system. “It's a brand new technology that's more efficient and greener than other plants,” Victorville City Councilmember Mike Rothschild said.
It is the second project developed by Inland Energy, Inc., headed by the team of Buck Johns and Tom Barnett. The company's first power plant in Victorville, the celebrated “High Desert Power Project” (HDPP), was named 2003 Plant of the Year by Platts Power Magazine. A third plant, also of Hybrid design, is slated for Palmdale.
Because of the looming state electricity crisis and the lack of plans for new power plants, officials in Sacramento on both the regulatory and elected sides of the State Government have strongly encouraged Victorville to move forward with the first hybrid power plant in the United States.
“We're saying to companies thinking of leaving the state, "Don't leave California. Stop in Victorville. We have something to offer you,” Caldwell said.
If privately owned, the plant will generate an estimated $6.5 million in tax revenues per year or about $200 million over 30 years with half the tax revenue going to the region's schools, and other taxing entities, according to Victorville City Manager Jon Roberts.
Alternatively, the City could retain ownership and use the project as the centerpiece of a Community Choice Aggregation entity, which would allow its member communities to receive the benefit of lower priced electricity, generated in part by renewable processes. The potential savings to the residents and businesses of participating communities could well be the hundreds of millions over the life of the Project. The announcement by the CEC will open the doors to VV2 and eventually provide customers with low-cost, green electricity from the super-efficient power plant.
“This is a huge step forward,” said Barnett, Executive Vice President of Inland Energy, about the CEC announcement to pave the way for VV2, which will be the cleanest and most efficient large fossil fuel fired plant in the world. Inland Energy is noted for its ability to address California's strict and complicated permitting demands while mitigating local environmental concerns. In the early 1990s, Buck Johns, Inland Energy President, conceived the energy-efficient HDPP in response to the state's exploding population and demand for electricity, along with then-Gov. Pete Wilson's stated desire to overhaul California's power sector.
While plug-in hybrid cars have become all the rage, hybrid power plants are still cutting edge – and now VV2 can go forward following a major hurdle that was cleared today with the CEC announcement.
With VV2, the environmentally friendly plant works by combining 50 megawatts of solar thermal energy and 520 megawatts of natural gas. The gas plant recovers hot exhaust that would normally be wasted and turns it into steam.
“One thing everyone agrees on is we desperately need these 570 megawatts, so the electricity won't have trouble finding a home,” Barnett said.
The PSA calls for a public workshop in Victorville in December with a Final Staff Assessment released in January or February 2008. The final permit is expected to be issued by the CEC in April, 2008 which will allow VV2's groundbreaking to occur later in the spring of 2008.