Piston power |
field’) where local people are also accustomed to having industry as a neighbour. Some of these sites now house two or three recip installations, perhaps owned by separate companies. With a site, connection and planning in place, a developer can delay making an investment in construction until it has a capacity market contract at a price that allows it to secure financing. Once in construction, the gas engines are delivered as low-cost pre-fabricated modular units. Some gas engine fleets belong to familiar incumbent power companies, such as RWE or Centrica.
In 2018 Centrica installed two 49.9 MW gas engine groups at Brigg and Peterborough. A comparison between Brigg and its site companion at that time illustrate how Centrica’s strategy had changed. The original Brigg plant, which started up in 1993, was a 240 MW CCGT designed to run at baseload. By 2018 the steam part of the cycle had been decommissioned. The steam turbine was removed in 2016 and the remaining plant was operating as an open cycle gas turbine rated at just 99 MW. At the time of the recip installation the OCGT was working for just 3% of the time in winter and as low as 1% of potential hours in summer. The ageing plant at that time had 10-15 years of technical life remaining.
That 99 MW turbine typically took 20 minutes to bring to full load when warm – compared with two minutes for its new piston based companions (when pre-warmed to 60°C). The reciprocating engines have a ramp rate of 15 MW/minute – twice that of the OCGT – and their efficiency is around 45%, compared to around 25% for their neighbour.
But alongside the familiar names the low cost of entry into the market for recip owners has also brought new types of owners and operators into the market.
Some companies have made a specialism of this new ‘peak power’ sector. Kiwi Power, for example, won CM contracts this year for five recip sites, while Sembcorp won a dozen contracts and Alkane had 19. It also still includes industries which have onsite power.
These new investors typically pass on construction, management and even trading the power from their gas engines to third party specialists, so they also have a low barrier to entry in terms of people, experience and even trading credit lines.
The easy entry route for gas recips is in stark contrast with the multi-year multi-million pound investment required for a gas turbine based power plant, which represents a very high barrier to entry – and typically carries high historical fixed costs within a traditional utility.
For several years the UK capacity market was in a cycle very unfavourable to gas turbines. A lot of potential projects were bidding to supply a relatively limited procurement target, so gas turbines exited the bidding relatively early, as the price dropped below the levels that would make projects financeable. With their low cost of entry and lower risk, gas engines could remain in the bidding as the price ticked down. And with gigawatts of gas engines accepting low-priced CM contracts that enabled them to build-out, they acted to keep any capacity shortfall – and therefore prices in the next auction – at a minimum. It is only this year, as nuclear plant closures remove large tranches of capacity from the
market, that prices achieved in the auction have become favourable to gas turbines.
What now?
The brief flowering of gas peakers may be short- lived. The most recent capacity market auctions have seen money move into batteries, which have some of the same attractive characteristics as gas engines for meeting peaking power needs. But they can also participate in other markets, such as providing very short term (within a few seconds) frequency response, a role that cannot be filled by gas engines. Over 3 GW of batteries won contracts in the T-4 auction this year and new companies are still entering the market. Batteries may be co-sited with existing or new PV arrays, enabling another potential revenue stream by helping the PV developer offer ‘firm’ power contracts. They are also even easier to site than gas recips, because they only require an electricity connection and not gas. One of the most recent new entrants is Pulse Clean Energy, which is aiming to develop 1 GW of storage capacity in the UK by 2025. Last year it acquired Green Frog Power – which had previously counted peaking engines among its specialities – but it did not take on its gas engines. It did take on nine diesel sites in the acquisition – but that is because they were prime sites for removing the diesel engines and installing batteries. Pulse Clean Power chief executive Matthew Mendes says, “We as a company won’t be investing in new-build gas engines”, citing risk factors around what will happen to the price of carbon and how they will be affected by other regulations. He adds, “We will try to figure out what’s next from a technology perspective, rather than looking back.”
Above: 49.9 MW Wärtsilä piston based natural gas fuelled power plant, employing five 34SG engines, as supplied to Centrica in 2018, for Brigg and Peterborough, UK (image: Wärtsilä)
14 | June 2022|
www.modernpowersystems.com
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