Wednesday, February 29, 2012

Dominion Announces New Gas Fired Power Station

Yesterday, East Coast utility Dominion Virginia Power announced that it is building a new $1.1 billion 1.3 megawatt combined-cycle natural gas-fired power station in Brunswick Co. in southern Virginia that will replace two coal-fired plants that are being phased out in Chesapeake and Yorktown, VA.  Targeted completion of the new plant is summer 2016, which should coincide with the retirements of the coal plants.

Expect more of these announcements from utilities in the coming years.  Dominion is already underway with another 1.3 MW gas plant in northern VA.  We've already seen a handful of these announcements and with the price of gas remaining low and the costs (economic and environmental) of operating old coal plants rising, it is a prudent action for utilities and ratepayers.

While many utilities have excess natural gas capacity that can be "dialed up," it is nice to see new plants built.  They are remarkably efficient in turning fuel to power compared to their predecessors and they represent an economic boomlet, creating jobs along the way.  This project might be the biggest economic development project in Brunswick Co. history.  Ratepayers fund the plants in the long term, but investing in a natural gas facility is a hell of a lot less risky than building a nuclear or coal plant.

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