NorthWestern Energy has announced plans to build a $250 million, natural gas plant to generate 175 megawatts of electricity at Laurel. The project is part of a three- pronged strategy to add a total of 325 megawatts of capacity to address future electricity needs in Montana.
The company also plans to purchase energy from a 50 megawatt battery storage project; and will enter a power purchase agreement for 100 megawatts of predominantly hydroelectric resources. Finalization of the plans rests with the Montana Public Service Commission, which is expected to take about nine months.
—NorthWestern Energy’s Laurel Generating Station will be a new 175 megawatt, reciprocating internal combustion engine (RICE units), natural gas plant.
For the 175 megawatt natural gas-fired RICE plant, Caterpillar Power Generation Systems, LLC, a subsidiary of Caterpillar, Inc. will supply the RICE units and Burns & McDonnell Engineering Company, Inc. was selected as the Engineering, Procurement, and Construction (EPC) contractor.
The Caterpillar RICE units are highly reliable and efficient with low emissions. The selected engines are capable of rapid ramping and multiple daily starts and stops. These units have the flexibility to provide power on-demand, baseload power, flexible capacity, and regulation services. These characteristics will facilitate the integration of existing and new intermittent renewable energy resources.
— Powerex Corp., a subsidiary of British Columbia-owned BC Hydro, has entered into a five-year power purchase agreement with NorthWestern Energy for 100 megawatts of capacity and energy products originating predominately from hydroelectric resources. The Powerex Corp agreement, “… will provide our customers with capacity mainly from the BC Hydro system starting in Jan. 1, 2023” said NorthWestern Energy Director Long-Term Resources Bleau LaFave. “Our Montana customers require this capacity as soon as it is available. This market product can be delivered on our existing transmission assets.”
—Contract pending on an Energy Storage Project that will be a 50 megawatt battery storage system utilizing lithium-ion technology.
The 50 megawatt battery energy storage system, is expected to be available to serve NorthWestern Energy’s Montana customers by the end of 2023.
“The energy storage project will provide the opportunity to store some excess energy from the grid to use when customer demand is high,” according to LaFave. “Today, NorthWestern Energy most frequently has excess energy on the grid from wind resources. Now we will have the opportunity to store a portion of that excess energy to improve matching the generation with customer demand and higher market pricing.”
“This selection of diverse projects will provide critically needed flexible capacity from a combination of thermal and renewable resources,” said NorthWestern Energy Vice President Supply and Montana Government Relations John Hines.
NorthWestern Energy is still short of the capacity resources needed to produce energy reliably at the times when Montana customers require it the most, say officials.
The strategies to meet future energy needs is the result of a bidding process for proposals that they issued in January 2020.
In a press release the company said that the new contracts will fill the gap between what they anticipated as needed for future energy supplies and what is currently available. It will also help decrease risk associated with the ups and downs of the market, and potential lack of availability. Overall, it will increase reliability for Montana customers..
The additional capacity will address more than half of NorthWestern Energy’s deficit in its supply portfolio. The deficit is becoming, said the press release, more critical as some regional coal plants and other capacity resources are being shut down, compromising reliability during extreme weather conditions, including multi-day weather events, when energy demand is high.
NorthWestern Energy’s independent, third-party request for proposals evaluator, Aion Energy, received 180 proposals representing a wide variety of technologies from 21 bidders.
The selected resources provide diversity in ownership and technology, including owned and market-based resources and the largest battery-storage project within Montana.
“This resource portfolio addresses a key portion of our immediate need for generation capacity while also allowing us to make progress toward our goal of an energy supply portfolio in Montana that reduces the carbon intensity of our electric generation by 90% by 2045,” said NorthWestern Energy Chief Executive Officer Bob Rowe.
“The 2020 RFP process provided an opportunity to see what projects and technology are available,” said NorthWestern Energy President and Chief Operating Officer Brian Bird. “NorthWestern Energy’s new Laurel Generating Station will be able to provide on-demand capacity for long durations. With that asset added to our Montana portfolio, NorthWestern Energy can consider other, shorter duration capacity projects in future RFPs.”
“Developing a diverse portfolio of resources capable of producing the energy our Montana customers need any time they need it is the responsible path forward as we all work together toward an affordable, reliable and cleaner energy future,” said Rowe.